Macau’s reliance on casino revenue to sustain public finances came to the forefront during budget discussions in the Legislative Assembly. The Pension Fund projected an operating deficit of approximately 130 million patacas (about 16 million dollars) in 2026.
Projections reveal a growing imbalance between revenues and expenditures in the pension system. This situation exposes the structural fragility of the fund in the face of demographic changes in the public sector workforce.
How gambling revenues support the Pension Fund
President Ip Sio Kai chaired the meeting of the Second Standing Committee. He subsequently stated that the government’s budget proposal estimates the Pension Fund’s revenue at 3.22 billion patacas (approximately $402 million). In contrast, expenditure reaches 3.35 billion patacas (about $419 million).
Allocations related to gambling represent a significant portion of the revenue. These funds total
Ip Sio Kai observed that removing funds earmarked for casinos would drastically increase the gap between revenue and expenditure. In this scenario, the deficit would reach approximately 1.3 billion patacas (about 163 million dollars).
He added that several categories of subsidies depend on direct reimbursement from the government. Consequently, this dynamic highlights the persistent structural pressure on the fund.
Demographic changes exacerbate the financial imbalance.
Representatives from the Pension Fund explained that the imbalance has worsened. The number of contributing civil servants continues to decline. Simultaneously, pensions are steadily increasing.
Around 400 workers retired last year. Authorities warn that the peak of retirements has not yet been reached. Therefore, this demographic shift suggests that the fund will remain in deficit for the foreseeable future.
Measures to ensure the sustainability of the system.
The government and the Pension Fund are analyzing measures to guarantee the long-term stability of the system. Ultimately, the authorities have not released any specific proposals so far.
However, they indicated that maintaining sustainable funding will require comprehensive planning. This planning aims to manage pension obligations in the coming years.
