OPINION – Sam Hou Fai’s 2026 Policy Address: Structural reforms eyeing public administration, economic diversification and Greater Bay Area integration

By José Luís de Sales Marques – Economist

Amidst a fortnight of highly visible national events, notably speaking at the opening ceremony of the 15th edition of the National Games in Guangzhou—a joint venture between Guangdong, Hong Kong and Macau—Chief Executive Sam Hou Fai presented to the newly elected 8th Legislative Assembly the 2026 Policy Address and Budget for the Macau SAR. What stands out in the 181-page document are the announcements of wide and deep reform of public administration, including the merger of the Cultural Affairs Bureau with the Sports Institute; the implementation of measures to accelerate economic diversification; the restructuring of the communitarian economy through selective subsidies and promotion focused on the tourist market; and policies aimed at further cooperation in the Greater Bay Area and Macau+Hengqin integration.

The ultimate goal, as stated, is to transition from a stage of economic recovery to a new era of sustainable, high-quality development, thereby further contributing to national development. According to the head of the Macau Government, policy measures will be implemented in a challenging local and international economic and geopolitical environment. Hence, the government’s proposed budget will be only slightly higher than the current one, based on the assumption that 2026 Gross Gaming Revenue (GGR) will reach approximately USD 29.5 billion, with a monthly average of USD 2.4 billion (MOP 19.3 billion), generating fiscal revenue from gaming concessions of USD 11.6 billion (MOP 92.8 billion). This figure is close to recent forecasts of GGR for 2025 by international institutions.

Public administration reform

The main goals of government action for 2026, as stated in the policy address, will be: continuing economic recovery; obtaining concrete results in the adequate diversification of the economy; maintaining GDP at positive growth; improving the business environment and strengthening continuous economic dynamism; achieving new progress in the construction of the Cooperation Zone in Hengqin and Macau-Hengqin integration; guaranteeing employment for resident workers; optimising social policies for people’s well-being and providing effective support for the most vulnerable groups; and the in-depth promotion of administrative and legal reforms, increasing government efficiency and reinforcing the safeguarding of national security, social harmony and stability.

With regard to administrative reform, the merger of Culture and Sports seems inspired by the Hong Kong model rather than the Guangzhou model. These two areas have always been distinct government departments in Macau, although coordinated by the same policy secretary, except during the era of the former municipalities, where they were under the same department. In Hong Kong, Culture, Sports and Tourism are placed under the same bureau. In the case of the Guangzhou Municipal Government, Culture falls under the Guangzhou Municipal Culture, Radio, Film, Television and Tourism Bureau, while Sports is under the Guangzhou Municipal Sports Bureau. Hopefully, this new experiment in Macau will succeed, although the task of the new government service—whatever it will be called—appears quite challenging if it inherits all the responsibilities of the two current departments, from high-level sports competition to the management of world heritage sites.

However, administrative reform is much more than organisational engineering, concentrating competencies and streamlining top management. At the end of the day, what really matters is the extent to which it will positively or negatively improve government relations with stakeholders: simplifying procedures, improving communication, serving the people and giving businesses a more friendly and inclusive environment, particularly those requiring a licence to operate. It is our belief that this government, under the executive-led system and with full coordination and support from the Legislative Assembly, will be able to reach those goals within a reasonable time frame.

One major project will reshape the landscape of Macau and enhance its positioning as one of the core cities of the Greater Bay Area: the International Cultural and Tourism Integrated Zone, comprising the National Culture Museum, the Centre for Performing Arts and the Museum of Contemporary Art. There are high expectations that these facilities will be housed in iconic buildings showcasing the very best of architecture from East and West.

Community economy, shifting consumer patterns and long-term solutions

Regarding the current hardships of the community economy, the Chief Executive also believes in long-term solutions rather than short-term remedies, preferring to apply supporting measures for industries to reconvert, modernise and find new markets instead of distributing more coupons, which, according to him, do not work in an integrated regional market where consumers can choose to spend their money in Macau or elsewhere in neighbouring cities. The end of coupons will eventually raise eyebrows in certain sectors of society that have been vocal about the need for such measures to offset the hardship of SMEs operating in non-tourist areas. However, the territory-based community economy and the urban areas where these businesses are located are changing at a pace dictated by modernity and the need to adapt to new patterns of demand—patterns that may be far removed from the neighbourhood clientele they were once comfortable with.

1+4 diversification strategy and expanding Macau’s external promotion

Diving into the 1+4 diversification process, the Policy Address contains measures consistent with the government’s resolve to accelerate implementation of the strategy. On the one hand, the government will review whether concessionaires are complying with the investments promised under the new contractual terms effective since 2023; on the other, it will encourage these companies to expand their promotional efforts abroad, including opening representation or sales offices to attract more foreign tourists to Macau. Tour operators and travel agencies are urged to be innovative and introduce multi-destination tours across the Greater Bay Area. In the same vein, the government is planning to open more economic, commercial, tourist and cultural offices abroad, namely in East and Southeast Asia—a welcome development, as Macau has long shied away from a more robust and regular promotional presence outside its comfort zone.

Ideally, this increased international profile should be matched by stronger efforts to persuade Air Macau and other airlines to operate direct flights to Macau, which would bring a significantly higher number of foreign tourists and provide fuel for the development of Macau-based multi-destination products and services in the Greater Bay Area. Otherwise, Hong Kong tour operators will continue to take the biggest slice of the pie. The expansion of the Macau International Airport and its positioning as the hub of international air transport to the west of the Pearl River will surely serve as a major incentive to move in this direction.

Financial sector reforms and the new role of investment funds

The financial sector seems to be navigating with high hopes following the entry into force, in January 2026, of the new Investment Funds Law (Law No. 11/2025), which modernises the sector and strengthens its role in mobilising capital to support innovation and growth in cutting-edge technologies, big health, the MICE sector, international sports, entertainment and education, as well as investment in Portuguese-speaking countries. The government also announced its intention to establish a government fund for industries and an orientation fund. The former will target industrial and research projects as well as other initiatives enabling economic diversification. The fund’s endowment has not been revealed, nor when it is expected to become operational, but its nature will be that of a joint-venture fund. It will, hopefully, focus on Macau-registered companies and contribute to the establishment of the new Macau Science and Technology Research and Development Industrial Park.

Last but not least, the government will have a busy year working on the elaboration of the 3rd Macau Five-Year Plan (2026–2030). One major project will reshape the landscape of Macau and enhance its positioning as one of the core cities of the Greater Bay Area: the International Cultural and Tourism Integrated Zone, comprising the National Culture Museum, the Centre for Performing Arts and the Museum of Contemporary Art. There are high expectations that these facilities will be housed in iconic buildings showcasing the very best of architecture from East and West.