Legislators approve revised 2020 budget proposal set to face Covid-19 economic impact

The Legislative Assembly (AL) today approved the first version of amendments proposed by the current administration to the 2020 public budget in order to ease the economic impact caused by the Covid-19 pandemic.

The current Executive Council had proposed changes to the 2020 budget law that take into account estimates that gross gaming revenues for this year will decrease 50 per cent year-on-year to some MOP130 billion (US$14.8 billion).

The new budget law also includes several financial measures to ease the economic impact caused by the pandemic, which is expected to increase estimated public expenses estimates to some MOP110.9 billion and with authorities having to dip into the city’s capital reserves.

“We never faced a situation like this, with so many uncertainties […] The economic recovery will take a long time, we have to boost internal demand and consumption. We have several proposals and this budget law aims to help companies face the difficulties. I believe the Spring will come for us, we have to insist,” the Secretary noted.

However, prior to voting several legislators urged the Secretary to enforce measures to stem inflation in essential goods, expenses incurred by SMEs and an expected rise in the unemployment rate.

“Many SMEs believe until this budget is put into force it will already be May. Since the crisis, two months already passed […] Many stores are already on sale, such as extracurricular schools and tourism agencies. Workers are waiting to see when they will get their wages back and some people might not be able to hold on that long […] The essential is not how much money is being used but how it is used to ease the real problems of local residents” legislator Song Pei Kei said at the plenary.

The Secretary then responded that authorities still had to make sure they are prepared for future developments and changes in the crisis, and defended the estimates made by authorities for expected gaming revenues and expense increases, stating that academics and experts had been consulted for the estimates.

“It’s an unprecedented situation. We had MOP22.2 billion in gross gaming revenues in January, then the casino suspension with MOP3 billion in February and March so far MOP6 billion […] Some people think MOP130 billion for 2020 is pessimistic but some think it is optimistic,” the Secretary noted.

The Secretary also noted that authorities expected to invest MOP11.9 billion in infrastructure and large scale developments this year and that when it comes to public development contracts the local government would give preference to local companies.