Policy Address: Economy and Finance | Non-gaming aspects account for 10.7pct of casino industry

Lionel Leong

The Secretary for Economy and Finance, Lionel Leong, was at the Legislative Assembly (AL) to answer lawmakers’ questions about the 2018 Policy Address. The role of the gaming sector in Macau and issues relating to human resources dominated the plenary session.

Davis Fong expressed his worries at the beginning of the debate about the threats to the survival of small and medium-sized enterprises (SMEs), in particular those posed by the gaming operators. Fong noted that the Macau government has requested that gaming operators expand their non-gaming business aspects. Fong questioned the government on whether it will compel gaming operators to carry out non-gaming activities “in order to avoid huge impacts which eventually gaming operators may pose towards SMEs.”

Ng Kuok Cheong and Lam Lon Wai voiced their concerns about gaming operators expanding into non-gaming sectors, such as the percentage of locals holding managerial posts in the gaming sectors. “The percentage of locals at managerial levels has been continuously increasing,” replied Leong.

The Secretary noted that in 2016, “non-gaming revenue reached 10.7 percent,” while the government’s first five-year plan had set the aspired percentage of non-gaming revenue at 9 percent.

“If you set the number [percentage] too high, maybe [gaming operators] will pose a threat to SMEs. […] Consumers generated by convention events have stronger purchasing power than the average consumer,” explained Leong. He explained that the average expenditure of consumers brought by a convention is MOP3,520, while the average consumer spending is around MOP1,900.

Leong also disclosed that, in the third quarter, the gaming operators’ total procurement exceeded MOP8 billion, with more than MOP1 billion being from Macau companies. “The gaming sector is supporting SMEs. There is a positive impact which results from the cooperation between the gaming sector and SMEs,” Leong said.

Regarding Macau’s overall economy, Leong noted that the economic growth in the first nine months was 9.3 percent.

When talking about non-local workers, director of the Labor Affairs Bureau (DSAL), Wong Chi Hong, disclosed that his bureau recorded eight cases of violations related to the non-local workers employment law, and that 144 non-local workers permits issued to the companies was canceled.

Leong Sun Iok and Pereira Coutinho raised questions concerning the gaming concessions. Leong Sun Iok expressed hopes that the authority can set up new mechanisms which will allow residents to share the fruits of the gaming sector. He also wants gaming operators to launch a salary assessment committee and a social security fund.

Repeatedly questioned about the gaming concessions – as some are due to expire in 2020 – Lionel Leong noted that the Chief Executive has authority to decide to extend gaming concessions according to the law. The maximum period of extension is five years. The secretary noted that Macau wants to sustain the gaming sector’s health, stability and competence.

“We will consider [the gaming sector’s] global competence when we make new regulations once the concession ends. It [the gaming sector] is top priority. If we launch our tender rules too soon, other places will adjust their policies according to them, and that will lead to fierce competition and problems for healthy gaming development [for Macau]. We should all think about the correct time for us to release said regulations,” declared Lionel Leong.

The Secretary noted that the government is already prepared for handling the gaming concessions.

Cleaners and security staff keep minimum wage at MOP30

Lionel Leong said that the government has already decided to keep the minimum wage for members of cleaning and security staff within the property management industry at MOP30 per hour. Leong noted that Macau’s accumulated inflation from 2012 to 2016 was 19.8 percent, and that the increase over the salaries of the aforementioned workers was 34.6 percent during the same period, whereas the salaries of property management doorkeepers increased 64.6 percent, and that of security guards increased by 37 percent. Based on this data, the government has decided to retain the minimum wage at the aforementioned rate.