Cowboy is back!
It has been more than 7 months since I last updated my blog. The last article being the Budget 2010 review and proposal and since then I have not written anything. It was a busy period for me and frankly, I did not find anything (non-political) that was interesting enough for me to write about. But today I am motivated to say something about the national subsidy policy which according to Idris Jala, will make Malaysia bankrupt by 2019!
My take on this whole subsidy issue is simple – its not just about the subsidy figures or items subsidized, its how we manage our overall finances and balance income vs spending. I concur that we need to reduce the subsidy and change the mindsets of the people but is it just about removing it? How do we increase revenue instead? How do we cut down on silly expenses and leakages? How do we remove the subsidy yet provide value added services so consumers don’t complain?
Engage the Opposition in a full blown manner to jointly discuss and formulate the subsidy revision policy. Trust me this is the single most important thing the govt should do first so that it will be presented to the rakyat without much negativism, sarcasm and (no pun intended) opposition! Focus the reduction of subsidy more towards the commercial and industry players as opposed to consumers.
Please see below for some simple and layman type ideas:
1. The average TNB bill for those consuming less than 400kWh per month is approximately (at 200kWh) RM40 per month based on a simple observation and calculation. This works out to slightly more than RM1 per day based on existing tariff (0-200 & 200-400kWh) of 21.8sen and 33.4sen respectively. To those consuming above 400 kWh per month is already paying tariffs reflective of comparable world prices but perhaps a fair price review can also be implemented. Comparatively in today’s world this is considered and accepted as very low so perhaps the govt should increase the tariff and get more revenue directly and not necessarily via TNB. The point is if electricity supply in this country is consistent and of good service (which it is) then its only fair that consumers pay for what they get.
2. There are approximately 5.5m school going children in One Malaysia based on a casual net research done. I could be wrong but the point is will it be too much for parents to pay RM30-50 per student per month if the parent’s combined household income is above rm3000 per month? and limit these fees to only a maximum of 2 going school children per household so that those who followed Dr M’s 5 children policy will not be burdened. Now parents can subsidize the schools that provide education for their children. I have written a concept article of “semi-private school” in my earlier posts and similarly, when parents pay they would expect better education, teachers and facilities which are already budgeted for anyway. So perhaps the govt can set up a special unit to oversee and manage this “student fee income” business model as a corporatised business unit.
3. Review all existing charges for permits, licenses, fees etc which may be outdated today. I am sure in some instances the govt can easily justify up to 100 if not 500% increase in these charges imposed on 1960′s prices some of them. Create a more creative and fair method of collecting these taxes, licences etc and don’t just expect to do a Robin Hood all the time. The rich are very small in numbers and if they are expected to subsidize the poor this is not the solution to the subsidy problem. The mindset has to change and the lower income must expect to pay more for better products and services. Road tax need not be cheap for cheap cars and expensive for expensive cars? We can change this concept to a more creative revenue earning scheme based on consumption statistics taking into account consumer’s sensitivity to cashflow vs capital expenditure. What is the point of charging the rich cars so much when there are only a few of them on the road to even make an impact on the overall revenue? Work out something more spread out across the board with a few incentives thrown in so that is fair to all. Government hospital bills is still at unbelievable 5th world rate perhaps and desperately needs a review and with that please throw in nice public hospitals and good doctors too.
4. Abolish APs once and for all dear govt! It does no one any good. This latest attempt in the last budget of charging RM10,000 per AP issued has only resulted in the price of AP “sold” and traded at a higher price much to the dismay of auto consumers. Govt should charge a registration tax for a new car and pro-rate the charges based on year of car that is to be registered. I have written about this in my earlier posts so the details are all there. Why should a few people enjoy the “buta” money from AP as if it is a “birth right” for some kelantanese when the industry as a whole does not accept it? Do we consider them warlords so much so that we are so afraid of them? If you think dealers will complain why not try it? I bet they would welcome this so much (the genuine car dealers that is) that they would even be willing to pay auction prices for selling licences just to be in the business. Extra revenue! Wake up dear govt!
5. Please stop all patronizing govt related events which almost all the time results in new batik shirts, custom t-shirts & caps, never used key chains, shoddy tents, colorful decorations, fake flowers and wasteful entertainment that costs the rakyat their money. I bet there are at least 200 of these events daily across the country and if each event spends at least RM50,000 we are looking at a total spending of billions per annum. Can we give all this up in the name of national politics and civil service wastage so that we the rakyat can continue to keep some of our subsidy?
6. The malaysia govt bends backwards to invite foreign direct investments into the country sometimes even at the expense of home bred industries. I think we should re-look at this policy. Should the govt waive taxes for certain foreign manufacturing and services companies operating here (taraf perintis) for up to multiples of 10 years just because they invest in operations here (which these companies own as their own assets) and hire thousands of workers (btw these are not local workers!) but they repatriate their profits back to their home country once their money is made? Are we assuming that the govt should do all these trade charity practices because as a business these companies would not spend the same amount elsewhere to operate and make a profit just the same? This is the failure of the malaysian hospitality specifically and asian heritage generally. If we need them so much to set up shop here on our shores then at least tax them for the profits they take out of our soil for their home country to enjoy.
7. Review the current income tax system. Create multiple tiers reflective of every level of society’s income and consumption of national benefits.
To implement some of the above, the govt must also allow the rakyat to see where and how money is spent. It is a two way responsibility and just as much as the rakyat need to be educated on how subsidies can make the country bankrupt, the govt should also show to the rakyat that wrong spending and leakages to the nation’s budget will get us to bankruptcy even faster than subsidies. I suggest the following:
a. Publish annually all govt macro and micro expenses in a public info portal and mainstream media as a comparison to new budget to be tabled. I beleive the rakyat will support what ever increase in payments required if they can see clearly how and where the money is going to.
b. Publish all tender details, award and companies involved in a public info portal. Govt should rate this companies so we can sleep at night knowing that these companies are not out to cheat (in some cases so easily) the govt coffers. Rate them based on capabilities and delivery so hopefully the smaller ones will aspire to be rated and grow accordingly based on merit instead of political patronage. This single culture has created the biggest leakages in Malaysia today unfortunately.
c. Big parcel contracts should be broken up into manageable smaller pieces managed by a special govt “project management” vehicle and this process would ensure that more deserving companies can do business based on merit and deliver quality products and services based on the actual that they are paid. It is truly a win win situation for all. For example, instead of awarding a RM3b contract to politically aligned company X, this special unit and can look at worthwhile components of this RM3b contract and create various parcels of sub-contracts ranging from RM20m above which could be awarded directly to over 100 sub companies and these subs can still pay a main project royalty to the great company X as a turnkey contractor. Nothing wrong as long as everyone is happy and the country gets the best deal in terms of price and delivery. No more cracked highways and falling roofs.
d. Monitor consumer retail prices closely and do not allow any of these “mamak persatuans” to con us all by asking to increase prices of teh tarik and roti canai just because gas prices are up. I recently paid RM1.60 for a simple glass of teh “o” ais and was wondering what excuse will they give to increase this even further? I can almost guarantee that the per unit cost is less than 30sen so what rubbish is this about not being able to cope with higher costs?
I hope to post more ideas as to how we can tackle this impending national bankrupt issue soon and I hope what ever you read above you take it in good light and faith as the point is never in the facts but more the approach as far as I am concerned.
shaik rizal
4 Comments
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If UmNO BN can do all those proposed by you it would be a miracle, because in the past 53 years there were never such attempts to think of the Rakyat first and UMNO last but when there is an election coming they will chant the slogans of 1 Malaysia ok?
Kill the cancerous disease and the patient will survive, likewise get rid of the root cause and the Nation will survive and thrive.
It does not matter what they do because whatever they do will be to no avail. Like RPK said in London, it is no good attempting to treat the symptoms because it just simply will not work. It is the cancerous disease that should be treated. So therefore as long as UMNO is in the driver seat then absolutely nothing could be done. Before anything else, UMNO will first have to line their pockets, then their families pockets, then their cronies pockets and then whatever morsels left to the selected segment of the rakyat. So how much is enough? It does not matter how much natural resources Malaysia possess for come one day these resources will eventually be exhausted. Then what?
Be like Singapore one might suggest. But do our leaders have that mentality and maturity to do so? With the present government – not by an extra mile mate!
So what can we the rakyat do? Well we can change all these just by a stroke of the pen. Quoting RPK, ‘We the rakyat is the boss’. So come GE13 with the stroke of the pen, we could effectively change the government and consign UMNO/BN to the gutter. Well not totally to the gutter but enough to effect them to be the opposition as at the end of the day checks and balances are still needed irregardless of who is forming the government on that day.
Interesting topic for discussion in light of what is happening to Greece. I hope Idris Jala is not capitalising on this to put fear in us that Malaysia will be a bankrupt nation if his proposal is not implemented.
Please be reminded that Malaysia is a very blessed country, rich in natural resources. We were once rich in tin ,timber and rubber. We still have palm oil , oil and gas.We are also ranked top 20 as the largest world’s trading nation. But how did we get to be in this financial predicament. Well , I think there is a gross mismanagement in the running of the country’s coffers. I do not want to debate on the root cause of this financial nightmare because deep down inside everyone of us know the main problem. Those in power know this too.
I agree with Shaik Rizal that the AP should be withdrawn IMMEDIATELY. Why the delay ? What is the reason?
Why do we need to engage celebrity like MIchelle Yeoh , Jean Todt and Jimmy Choo to be our Ambassodors to promote the country. They do not come cheap!!!! Furthermore we have the Tourism Ministry which is supposed to do this.
It is imperative in this crucial times, the government assess mega projects like the Corridors. Do we really need to pump more money into them .
Yes, let’s look into government related events. Also reduce foreign travels by government officials. A lot of money is wasted on the so called trade mission. Let us not kid ourselves. The costs outweigh the revenue. These government officials are just going on a paid holiday.
Please do not just pass the buck to the Rakyat. The government must show their seriousness to cutback expenses and frivolous spending too.
Well Done Cowboy. There is more thought put in your blog than Idris in his speech.
This is a serious sitiuation that requires serious people thinking about solving the problem and not just passing the BUCK. There is no place for SCARE TACTICS and PANIC MERCHANTS.
The people spoke at the last election where they did not give the BN Government the two thirds majority. But its obvious the leadership is not listening.
Before making the Rakyat suffer more by removing the subsidy, the Government MUST show Good Faith by doing what it can and within its Power to improve the sitiuation. Making the Rakyat suffer should be the last resort.
Lets Talk MISMANAGEMENT or POOR Decisions of the Financial Management of the country leading to the state that we are in.eg
1) The corridors, North ,South, and Eastern -Total Waste of Money
2) Freebies and Goodies given to the’ Chosen People’ like the Continuation of the AP Program ,compensations paid to companies on Botched up jobs, special prices and fantastic offtake agreements for SOME IPPs.
3) Moneys wasted on advertisements for silly programs like our Cosmonaut adventure,
4) GLCs paying Tax Payers money for Over Inflated Investments like Maybanks Purchase of the Bank Industri Indonesia and Khazanah Paying Parkway for Gleneagles.and The SIME DARBY Fiasco of cause takes the cake.
5) Huge commissions paid to Chosen people on Goverment purchases
The list goes on and on and on just like the Duracell Ad
Lets Talk about Leakaages, Projects awarded to Chosen Peoples who then Sub it out to other Chosen People who then Sub it to the people doing the JOB. Why the many layers and allow such things to happen?
When Najib took over the reigns from Pak Lah, I really thought that we can expect better times. But dreams are turning into nightmares culminating with the Idris Jala Speech.
Why just focus on the expenditure? Why not look at ways to improve revenue streams.
What ever it is, the cost cutting programes must come from the Government fiirst. Otherwise it is a pure case of just passing it on.
Lets stop the leakages, and the mismanagement and the corruption and I believe that we can stop making the Rakyat pay for all the mistakes.of the Government !!!!!
Well done brother cowboy! What you have said is definitely applicable but when the big boys are recalcitrant, you and everyone who think in the right way are just pouring water on the duck’s back! When the ducks say ‘quack.. quack.. quack’ I think it literally means in human language…”we’ll look into it” ( typical of those who matter ).