MACAO Mar. 24 -- In a bid to ease inflationary pressures on local residents, the Macao Special Administrative Region (SAR) government recently launched a special subsidy program which will cost it over 800 million patacas (around 1 million U.S. dollars), but public opinions showed that the government still need to do more to help the socially disadvantaged through the lean periods of high inflation.
Starting from April 2008 to March of next year, electricity fee and income subsidies will be granted respectively to some 180 thousands households in the city, and about 16 thousands local full-time employees who, aged over 40, were paid less than 4 thousands patacas (500 U.S. dollars) a month, according to the program, which was firstly revealed by the SAR government on March 12.
The 150-pataca (19 U.S. dollars) monthly electricity fee subsidy will in effect exempt 55 thousands households, or 30 percent of the total, whose monthly electricity bills amounted to less than 150 patacas, from paying electricity charges for the period, said Francis Tam Pak Yuen, secretary for economy and finance of the SAR government.
Meanwhile, the income subsidies were aimed to ensure that the beneficiary could earn at least 4 thousands patacas a month, or about half of the officially measured median monthly employment earnings, which stood at 7,926 patacas in the fourth quarter of last year, according to the secretary.
Macao's inflation rate as measured by the composite CPI (Consumer Price Index) for February 2008 rose by 9.47 percent year-on-year, according to the SAR's Statistics and Census Bureau.
In an earlier circumstance, Anselmo Teng, president of the Macao Monetary Authority, (AMCM) noted that the fast appreciation of RMB has increased Macao's inflationary pressures, which has affected the prices of food imported from the Chinese mainland. AMCM has predicted in its news brief that Macao's inflation rate may hit 10 percent this year.
In addition to the above measures, other types of one-off allowances will be paid to single parents, the disabled, and residents suffering from chronic diseases. The SAR government also decided to pay a special "livelihood subsidy" to "vulnerable families" in May and August this year. Local senior citizens will also receive an extra old-age subsidy of 1.8 thousands patacas (225 U.S. dollars) in May.
Despite all these financial assistance measures, concerns were still voiced by many people and a demonstration was even launched shortly after the announcement of the measures, in which the protestors called for better social welfare to help the socially disadvantage to carry through the high inflation period.
The subsidy measures can partly lessen the inflationary pressures on local residents, but these are only temporary solutions, which cannot eventually change the fact that people's quality of living has worsened due to high inflation, said Yiu Hong Ming, president of the Macao Union General of Community Association, a local non-profit organization.
He added that to address the problems caused by high inflation, the government should do more in curbing the composite CPI from further rising, such as increasing the supply of food products by ending the current market monopoly and introducing a more competitive supply system.
However, local lawmaker Ng Kuok Cheong pointed out that many people still expressed their dissatisfaction after the announcement of the measures, as they deemed that the subsidies will not benefit the low income households and indirectly encourage employers to continue paying low salaries to workers.
He proposed that the SAR government should raise its minimum subsistence allowance to those socially disadvantaged households, and cut the number of migrant workers in the construction and gaming sectors so as to preserve jobs for the locals.
The average Macao people have very limited means to offset the negative effect of inflation hike since local banks have cut their deposit rates to near-zero level, noted Lau Pun Lap, president of the Macao Association of Economic Sciences.
Macao Banks have cut local deposit rates of Hong Kong dollar and pataca saving accounts following the similar Hong Kong rate move, under which depositing 10 thousands patacas (around 1250 U.S. dollars) in a local bank account will only earn just 1 pataca in annual interest income.
Depending on the development of the inflation, the SAR government may need to extend the duration of implementing its anti-inflation measures, as the inflation hike will last for a relatively long period, said Lau.
(Edited by CBI China)