Macau to give more money to its people next year

In 2007, Macau surpassed Las Vegas to be the world’s largest gambling market, this year (2011) the gambling market in Macau has grown to become 5 times bigger than that of Las Vegas. The tiny Chinese territory experienced an unprecedented economic boom with an average double-digit percentage GDP growth for the last 10 years, the fastest in the world. Its living standard rose over 300 percent in just one decade, overtaking Japan and becoming the richest territory in Asia by nominal GDP per capita in 2010.The exponential growth in the gambling industries boosted Macau’s treasuries, as of October 2011, the territory has stacked up US$32 billion in foreign reserves, an astounding figure for a 29.5km2 city – an area nearly 20 times smaller than the UK’s Isle of Man or 19 times smaller than the US territory of Guam Island. Unlike Europe who is currently plagued with debt crisis, Macau has no (zero) debt.

In 2008, the Macau government decided that all residents in the city should enjoy the fruits of its economic success, and wealth of the territory should be partly distributed among all its people. Its way of rewarding? Giving out cash directly to the people, injecting money into the people’s bank account, spend heavily to develop social infrastructure, implement tax-exempt measures, and grant massive subsidies for the populace.Earlier in January this year, the Macau government gave all its residents (including children) a cash handout of 4,000 MOP (US$513) for permanent residents and 2,400 MOP for non permanent residents respectively. In August, Macau again paid all its permanent and non permanent residents 3,000 MOP (US$375) and 1,800 (US$225) respectively.

The casino boom in Macau sees no sign of slowing down. Last year the total Macau government revenues was US$9 billion (Ironically, the government revenues for Panama, a country 2,560 times larger and 6.25 more populated than Macau, was US$6.9 billion) After paying off the overall government expenditures of US$3.7 billion, the government of Macau posted a budget surplus of US$5.3 billion.In comparison, the government revenues for the United States is US$2.16 trillion while expenditures US$3.46 trillion, thereby incurring a US$1.3 trillion budget deficit, the world largest. The deficit gap is to be borrowed, raising the national debt.From above, we understand that Macau government incurred a US$5.3 billion budget surplus last year. The gambling industries seem unstoppable this year and such surplus has widened. This year just the first 10 months alone from January to October, Macau announced a budget surplus of US$7.4 billion. This kind of surplus is common for oil-rich state but not usually found on a territory with no resources like Macau.The government of Macau sees no other way to spend the extra money, except to reward its people even more.

Macau to give a bigger cash handout in 2012Note: The abbreviation MOP means Macau Patacas, the currency of MacauMacau — Permanent and non-permanent residents will receive a cash handout of 7,000 MOP (US$875) and 4,200 MOP next year, Chief Executive Fernando Chui Sai On announced yesterday during his 2012 Policy Address at the Legislative Assembly of Macau.In addition, the government will inject MOP 6,000 (US$747) into each Central Saving System account (also known as Social Security Fund, National Pension Fund or Employees Provident Fund in some countries)The Macau authorities will also raise the annual elderly subsidy to MOP 6,000 (US$747), and increase income subsidy given for low-salary residents to MOP 4,400 (US$548).

Further to that, the 6,000 families living in social housing units provided by the government will remain exempt from paying rent throughout 2012. The MOP 180 (US$22) electricity subsidy will also continue, as well as the MOP 500 (US$62) healthcare vouchers.Meanwhile, the textbook subsidy will now include college and university students with a MOP 2,000 (US$249) allowance, previously only nursery (MOP 1,500/US$187), primary and secondary students (MOP 1,700/US$212) get them.This come as Macau’s median wage hit MOP 10,000 per month (US$1,246) for the first time in the territory’s history. Median salaries in Macau have increased more than 100 per cent in the last seven years, while prices rose by 31.9 percent in the same period.“The government will implement tax-exempt measures that will cut out 1.47 billion MOP (US$184 million) of taxes for its 550,000 residents, and will spend 8.57 billion MOP (US$1.07 billion) in subsidies on helping its residents,” Macau Chief Executive Chui said. “This will increase the government’s expenditures, but our main priority is to ensure that local residents benefited and shared the wealth from Macau’s economic boom.”

The Chief Executive indicated that Macau’s GDP for the first half of 2011 grew by 22.9 percent, the highest in the world and undeterred by the global financial crisis.Macau’s welfare spending and investment in social infrastructure has catapulted its Human Development Index (HDI) to the highest in Asia, with a score of 0.909 compared to Japan’s 0.901. The HDI for the United States is 0.910, Germany 0.905 and China 0.687, a HDI above 0.84 usually indicates that country is a developed nation.

zimbabwemetro.com