Lawmaker suggests gov’t link ‘cash handouts’ to investment fund

Lawmaker Si Ka Lon has submitted an unusual proposal to the government calling for a complete overhaul of the system that currently regulates the government’s wealth partaking scheme.
In the proposal submitted through the Legislative Assembly at the close of this term, the lawmaker addressed the current situation of the so-called cash handout paid annually to all residents of Macau by the government, suggesting an alternative proposal.
Taking into account the events related to the economic impact caused by the Covid-19 pandemic, which resulted from an economy too dependent on a single activity, Si believes that it would be more beneficial if the government establishes a new investment fund, which he called a “population fund” with all residents participating as shareholders.
The idea is for local people to start receiving earnings resulting from the investments made through the fund, instead of the cash handout by the government.
To establish the fund, the government detaches a sum of 100 billion patacas from the extraordinary reserve, apportioning not less than 100,000 patacas to each resident.
This would not only guarantee a better rentability for the residents but also an opportunity to “promote the development of Hengqin, accelerate the investment for the diversification of industries and expand common platforms for sharing opportunities,” he said.
Si claims that the idea of using a sum of 100 billion patacas comes from several studies carried out by the Macau SAR investment development fund on the topic.
According to the figures quoted, at the end of last year, the Financial Reserve had a value of 616.1 billion patacas, of which 146.6 billion belonged to the basic reserve and 469.5 billion to the extraordinary reserve.
Si added that such an effort will also lead to an increased participation by local residents in the economic stimulation.
The lawmaker again quoted official figures to say that in the past few years, the government has been attempting to optimize the Financial Reserve’s investment portfolio, through the increase in shares, bonds, and participation in the construction of the country, among others. It is the ability to “be able to increase the return on investment, in the last five years, to an average annual rate of 3.1 percent,” he said.
With the idea of turning every resident into a shareholder of a Macau SAR investment fund, Si also hopes to help solve problems resulting from the shrinking of opportunities in the job market, especially for the sectors of tourism and gaming, conventions and exhibitions, and small and medium-sized enterprises as well as for the growing number of
unemployed and underemployed residents.
The benefit of this proposal is that it will not be directly dependent on the government’s annual tax income. The dividends will be distributed to residents on an annual basis, depending on the profitability of the investment portfolio.
The lawmaker also referred to the President Xi Jinping’s speech, made during the Macau handover 20th anniversary celebration, noting that this fund would fulfill the idea of “accelerating the development of the economic diversification with a focus on assets and strengths.” In addition, it will “create a channel for the population to participate in regional cooperation and to share opportunities for the development of industrial diversification so that development opportunities and results can benefit the entire population more broadly.”
Concurrently, he also called for accelerated training of the staff which deals with the government’s reserve funds and to upgrade to an ideal inspection mechanism which will be adjusted to the characteristics of a “public and universal company that would be under periodic supervision of the Legislative Assembly through the presentation of monthly or quarterly reports, as a form of accountability with the resident-shareholders.”