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Edmund Ho reveals plan for central provident fund
A plan to set up a non-mandatory central provident fund  was unveiled by Macau Chief Executive Edmund Ho Hau-wah  yesterday as part of his package to tackle 'snowballing social problems' in the former Portuguese enclave.
Mr Ho also admitted 'inade- quacy' in estimating and coping with social problems that surfaced in the city's economic development. 'There is lots of room for improvement when it comes to our judgment on new social developments and our ability to act early,' he said.
Delivering his policy address in the Legislative Assembly, Mr Ho said the government would earmark part of its  surplus as seed money for a central provident fund  aimed at enhancing the quality of life for retirees.
'The government will decide whether to inject extra funding into the scheme, depending on the fiscal situation at the time,' he said.
Eligible  residents can choose to open  personal accounts under the scheme, with funds provided by the government. They can access  cash in their accounts when they retire. The so-called 'non-mandatory central provident fund' would cover all permanent Macau residents, although employers might not be obliged to contribute to the fund.
The policy address did not explain what would happen to the fund in a year of deficit.
Hong Kong unionists have, since the 1960s, been calling for  a central provident fund to be set up with contributions from the government, employers and employees.  But the idea was not adopted because of lack of consensus in the community. The Hong Kong government introduced the Mandatory Provident Fund scheme in 2000.
Mr Ho said various problems in Macau quickly  produced a snowballing effect that harmed the government and society.
The chief executive, who will step down in 2009, said  19,000 public housing flats  were being planned for completion by 2012. 'The lasting optimism of investors has put a different complexion on Macau's property market, causing pressure and worries to many citizens,' he said. The government would also develop homes  for young couples who had problems buying apartments.
Tax cuts worth a total of 1.1 billion patacas were announced, with employees continuing to enjoy a 25 per cent income tax concession.
The personal allowance will be raised from 95,000 to 120,000 patacas, and Macau residents who are first-time homebuyers  will be exempted from stamp duty on the first 3 million patacas spent on property purchase.
Other sweeteners  handed out by Mr Ho, to be implemented next year as short-term relief, include exemption of rates for all residential properties which are not rented, and a rise in the old-age allowance. Civil servants will be given  an 8 per cent across-the-board pay rise next year.
The Macau government's  surplus increased by  95.5 per cent to 19.13 billion patacas in the first nine months of this year. While  revenue rose by  47.39 per cent during the period due to soaring contributions from gaming taxes, which accounted for 75.5 per cent of all government revenue, spending  fell by 0.34 per cent.
Macau's swelling coffers  represented 9.37 per cent of gross domestic product  and 115 per cent of all government spending during the first half of the year.
While the casino-driven economic expansion has created unprecedented wealth in the city, it  is concentrated in the hands of a  few.
Annual GDP per capita soared by 101 per cent to 227,500 patacas between 1999 and last year, but median annual  earnings increased by only 37 per cent to 80,400 patacas.
Workers outside the gaming industry have largely missed out on the boom, and  resentment towards imported labour continues to grow.
Key initiatives
Establish non-mandatory central provident fund
Build 19,000 public housing flats by end of 2012
Increase old-age allowance
Increase personal tax allowance from 95,000 patacas to 120,000 patacas
Exempt Macau residents who are first-time homebuyers from paying stamp duty on first 3m patacas
Waive rates for all residential properties not being rented out



Macau chief acts to ease 'snowballing' social woes