Government to further boost economic diversification and non-gaming industries

Chief Executive, Mr Chui Sai On, answers questions from legislators on Policy Address for the Fiscal Year 2015 at a plenary session of the Legislative Assembly.

As Macao faces an economic readjustment period in the coming years, the Government’s economic development strategy will focus on further promoting adequate economic diversification and deepening regional economic integration, while attaching importance to the simultaneous development of gaming and non-gaming elements in order to achieve sustainable development, the Chief Executive, Mr Chui Sai On, said at the Legislative Assembly today. Mr Chui also said the Government will commence an interim review of gaming concessions, based on eight perspectives. Facing the decline of gross gaming income, the Government is cautiously optimistic regarding the gaming industry’s stable readjustment and future development, and well prepared for any adverse situation. The Chief Executive said the new integrated construction project along Cotai Strip is still progressing as planned, to enhance both gaming and non-gaming elements of the local economy. Macao recorded 31.5 million visitor arrivals in 2014, which was more than in the previous year. However, with gaming income from gaming halls rising while that of VIP rooms is declining, the difference between the two is narrowing. Looking into the future, Macao will be competitive in both tourism and gaming; and it has already created favourable conditions and reserved positive energy to overcome challenges. Regarding the interim review of gaming concessions, the Chief Executive said the Government has commissioned a tertiary education institution to conduct basic research. The review will be conducted with consideration of the following eight perspectives: the impact of gaming industry development on the local economy; the impact of gaming industry development on SMEs’ business environments; the impact of gaming industry development on society and people’s livelihoods; synergy between gaming and non-gaming elements; the performance pledges and contract fulfilments of gaming concessionaires and sub-concessionaires; the operations of gaming concessionaires and sub- concessionaires from their establishment until the review; the legal compliance performance of gaming concessionaires and sub-concessionaires; and enhancement of social responsibility of gaming concessionaires and sub-concessionaires. The Chief Executive reaffirmed that the Government is confident of safeguarding local residents’ employment and maintaining a low unemployment rate. An adaptable structural readjustment strategy will be adopted, enabling Macao to enter a new stage of adequate economic diversification and achieve a new level of regional integration. Mr Chui said the gaming industry entered a readjustment and consolidation period during the second half of 2014, after experiencing Macao’s rapid economic growth for more than a decade. The gap between gaming and non-gaming incomes has narrowed somewhat in recent years. In 2014, the gaming industry recorded gross income of 360 billion patacas, while the non-gaming industries – including wholesale and retail, hotel, food and beverage, construction and finance – recorded gross income of more than 190 billion patacas. According to Mr Chui, Macao has achieved a considerable financial surplus since the establishment of its fiscal reserve system. Including the preliminary estimate of last year’s surplus, foreign exchange reserve, basic reserve and excess reserve, Macao’s total fiscal reserve has reached 560 billion patacas. He therefore has full confidence in the implementation of this year’s financial budget. Mr Chui added that the Government will manage public finance in a prudent manner. After thorough consideration, the budget for 2015 is reduced from 27.5 billion patacas to 20 billion patacas, which still fulfils the requirements of the Basic Law. He emphasised that the budget adjustment will not affect all livelihood projects and the provision of services approved under the budget. In the past few years, expenses on public services have represented over 60% of the Government’s expenditure. The Government will ensure the continuity of its services. The Chief Executive also mentioned that adequate economic diversification is one of the Government’s administrative highlights. The Government will provide strong support for this, in order to maintain economic stability, promote growth of non-gaming industries, and realise sustainable development. Meanwhile, the Government will also seize all opportunities for active participation in regional cooperation. Mr Chui said the Guangdong Free Trade Zone has invited Macao’s participation, mainly in system innovation and reform. With the support of the motherland, Macao will firmly and actively participate in regional economic involvement and integration, which is an important approach for future growth. The Chief Executive responded to 28 questions raised by members of the legislature this afternoon. Most concerned livelihood issues, transport, medical and healthcare, gaming and fiscal reserves.

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