Macau govt under pressure to curb showy spending

MACAU • Panda exhibitions, opera and Communist Party souvenirs were just some of the causes that received tax money reaped from Macau's US$44 billion (S$61 billion) casino industry over the past two years.

Now the former Portuguese colony's government is coming under pressure from residents, local activists, academics and legislators to rein in its more ostentatious spending habits as the gambling industry's slowdown sends its tax take plummeting and highlights its ageing public infrastructure.

Macau's gross domestic product fell 26.4 per cent in the second quarter of this year as China's corruption clampdown sent a chill over the casino industry, prompting the government to announce spending cuts earlier this month.

Many of Macau's 600,000 permanent residents feel the tax money has gone to unnecessary causes while spending on public services and infrastructure has been inadequate and inefficient.

"For all the amount of money and reserves accumulated, the financial reserves have not translated into an improvement in everyday life for residents," said Mr Jose Duarte, an economics lecturer at the University of Macau.

The gambling hub's sole public hospital is overcrowded and construction of a new ferry terminal is five years behind schedule. A new rail transit system announced in 2007 has no scheduled completion date.

The territory, which makes more than five times the annual gaming revenue of Las Vegas, ranks just behind Qatar as one of the world's wealthiest territories, according to the World Bank. But its Gini co-efficient, a measure of income inequality, stands at 0.35, below the international "warning" level of 0.4, according to a 2014 European Commission report.

Mr Alexis Tam, Macau's Secretary for Social Affairs and Culture, has pledged to reduce "unnecessary" expenditure such as visits, receptions and celebratory activities.

Last year dozens of small associations, such as the Macau Mini Car Fans Group and Macau Veteran Footballers, were given subsidies to celebrate the anniversary of Macau's handover to China.

"There have been too many celebrations," Mr Tam said.

Since Sept 1, the government has implemented a 5 per cent freeze on budgeted consumption spending for certain bodies, including the much-criticised government-linked Macau Foundation, and warned of further cuts if the economy shrinks further.

Mr Jason Chao, a democracy activist in Macau, is sceptical that the new measures will help address the territory's income inequality.

"This is just a small slice of the cake," he said.

REUTERS

A version of this article appeared in the print edition of The Straits Times on September 19, 2015, with the headline 'Macau govt under pressure to curb showy spending'. Print Edition | Subscribe