Gambling riches pump up patriotism while public services struggle
Panda exhibitions, opera shows and communist party souvenirs were just some of the causes that received tax money reaped from Macau’s US$44 billion (NZ$69b) casino industry during 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 GDP fell 26.4 per cent in the second quarter of 2015 as China’s corruption clampdown sent a chill over the casino industry, prompting the government to announce spending cuts earlier this month.
This has caused consternation among many of Macau’s 600,000 permanent residents, who feel that 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 Jose Duarte, an economics lecturer at the University of Macau.
The gambling hub’s sole public hospital is overcrowded, while construction of a new ferry terminal is five years over schedule.
A new rail transit system announced in 2007 has no scheduled completion date, while its initial budget had to be tripled.
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.
However, its Gini co-efficient, a measure of income inequality, stands at 0.35, below an international ‘‘warning’’ level of 0.4, according to a 2014 European Commission report.
Alexis Tam, Macau’s Secretary for Social Affairs and Culture, pledged in September to reduce ‘‘unnecessary’’ expenditure such as visits, receptions and celebratory activities.
Last year dozens of small associations, ranging from the Macau Mini Car Fans Group to the Macau Veteran Footballers, were given subsidies to celebrate the anniver- sary of Macau’s handover to China.
‘‘There have been too many celebrations,’’ Tam said, according to local media reports.
Taxes from Macau’s gambling industry topped US$17b (NZ$26.7b) last year, with revenues from casino operators, including US billionaires Sheldon Adelson and Steve Wynn, contributing to over 80 per cent of total government expenditure.
Macau’s government did not provide a comment for this article when contacted.
One beneficiary of tax money that has come in for particular criticism is the Macau Foundation, a government-linked body that says it distributes money to charitable, social and grassroots causes.
Run by a 14-person board, the foundation received more than US$700 million (NZ$1.1b) last year, more than what the government spent on either public security or housing.
Its critics say there is little transparency about how the foundation allocates funds, and that too much of the money it hands out is spent on patriotic activities.
Eric Sautede, an academic based in Macau, estimates that over 12 per cent of the subsidies granted by the Macau Foundation in the first quarter of 2015 were allocated to patriotic events celebrating Macau’s handover to China in 1999.
The foundation told Reuters that it allocates money to projects and activities with ‘‘significant importance to the prosperity and development of Macau’’.
In an email, it said it spent ‘‘about 600 million patacas (NZ$118m) assisting private hospitals and clinics between 2001 and August this year’’, and detailed subsidies it gave to elderly and disadvantaged groups.
It says it has a board of supervisors that inspects its accounts, and that individuals or institutions receiving money from the foundation have to provide a report on their activities.
Since September 1, the government has implemented an immediate freeze of 5 per cent of budgeted consumption spending for certain bodies, including the Macau Foundation, and has warned of further cuts if the economy shrinks further.
Jason Chao, a democracy activist in Macau, is sceptical about whether the new measures will help to address the territory’s income inequality. ‘‘This is just a small slice of the cake.’’
Reuters