Barisan Nasional’s Budget 2012 is like a sugar-coated placebo – makes you feel good after taking it, only to tax you more later

by Tony Pua
8 Oct 2011

It is difficult not to “feel good” after a record-breaking pre-election budget where goodies big and small, were liberally handed out to practically all segments of society. The question is, beneath the sweeteners, are there substantive reforms proposed in the Budget 2012 to make “transformative” changes to our economy to achieve the goal of becoming a “high-income nation” by 2020.

The answer, when compared side by side with Pakatan Rakyat (PR) Alternative Budget is obvious. There is little in the Barisan Nasional (BN) federal government’s budget that indicates a determination to slaughter sacred cows and take the Malaysian economy to the next level.

Both the PR and BN’s budgets had proposed cash grants to various deserving segments of society in order to help alleviate their increasingly heavy burdens. However, PR matched its welfare benefits with policies to rectify the distortions created by the current government to reduce inflationary pressures and the cost of living over the longer term.

PR has called for the abolition of artificial monopolies licensed by the Government such as Bernas which monopolises the sale and distribution of local and imported rice. In addition, predatory market strategies by Telekom Malaysia to stifle competition will be made illegal while the monopoly of satellite and cable television will be abolished. Continue reading “Barisan Nasional’s Budget 2012 is like a sugar-coated placebo – makes you feel good after taking it, only to tax you more later”

Budget 2012 fails to live up to the Prime Minister’s reform pledges in NEM, GTP and ETP

Media Statement by Tony Pua, DAP National Publicity Secretary and Member of Parliament for Petaling Jaya Utara in Kuala Lumpur

The expectations were high for a pre-election budget where Datuk Seri Najib Abdul Razak will stamp his “reformist” credentials. It is for the Prime Minister to put into action the various reform pledges made in his cornerstone policy blueprints – the New Economic Model (NEM), Government Transformation Programme (GTP) and the Economic Transformation Programme (ETP).

However, the announcement of the budget left much to be desired as little has changed beyond tweaking the budget of the previous financial year. Instead what is perhaps the most worrying is that Malaysians are like the proverbial frog in the hot soup – where the frog does not realise the soup is slowly but surely reaching the boiling point.

We may not yet be facing the crisis of Greek proportions, but Budget 2012 is doing very little to avert such eventuality, leaving the Malaysian economy nakedly exposed to the inevitability. Continue reading “Budget 2012 fails to live up to the Prime Minister’s reform pledges in NEM, GTP and ETP”

My dream Malaysia Part 1 – Home Front

by Richard Loh
October 5, 2011

My dream comes true in a dream within a dream. I woke up to find a total different Malaysia that most Malaysians have been waiting for even though we have yet to attain the developed status. But, is being a developed nation that important when the rakyat are just as happy and living a peaceful and prosperous life with a matured democracy?

Home Front

My daily routine after waking up is to stand at the balcony of my 900 SF apartment, breathing some fresh air generated from the greenery’s not far away. This apartment was bought by my daughter who can afford to do so because it was reasonably priced and an income that allows her to do so.

On my breakfast table there were three newspapers, Utusan, NST and The Star. I read through them one at a time and feel happy reading them. Utusan headlines “Timbalan Perdana Mentri, XYZ, di- arah ka MACC untuk siasatan korupsi”, The Star front page news ‘A top NGO leader was sentenced to five years imprisonment for calling other ethnic groups ‘pendatang’ while NST reported that an opposition MP was disqualified after he was declared a bankrupt. All the papers were reporting exactly what is happening around us and I could not find a report about religion or racial conflict.

After breakfast I took a drive to the market,(usually I would take the MRT, which is nearby and directly stop at destinations where I wanted to go) about 10km away to test my new 1.6 Protonsia. This Protonsia is 100% Malaysian make, body and engine designed by local engineers and safety test approved by the international automobile association. This car model was even exported to the United States with the same price tag as other imported cars like Toyota, Nissan or Mazda of the same engine capacity. Continue reading “My dream Malaysia Part 1 – Home Front”

Tax reliefs: Hidden subsidies that favour the rich

— Subramaniam Pillay
The Malaysian Insider
Oct 07, 2011

OCT 7 — In the past couple of years, there has been a lot of talk on subsidy rationalisation i.e. the removal of subsidies for basic items like cooking oil, sugar, flour and petrol. The argument is that it subsidises the poor as well as the rich; it is unfair to provide subsidies for the rich, so we must eliminate the subsidies and let market forces work.

Many of these subsidies help the poor and the rich equally. For example, if a family consumes 5kg of cooking oil per month, they get the same subsidy regardless of their wealth and income. Usually, consumption of basic food items does not increase with increasing wealth and income.

However, there is a large hidden subsidy which favours the rich over the poor that has been conveniently forgotten. And this comes in the form of the various tax reliefs offered to taxpayers. In this week, before the 2012 Budget is announced, there have been numerous calls to increase the tax relief for various items including premiums for medical insurance, educational insurance and life insurance.

Tax reliefs are is a very regressive form of government subsidies to the taxpayers. The richer the taxpayer, the more subsidy she gets from the government. Thus it is unfair and inequitable. Continue reading “Tax reliefs: Hidden subsidies that favour the rich”

No Malaysian university in Times Higher Education (THE) 400 Top World University Ranking 2011/12

The release today of the Times Higher Education (THE) 400 Top World University Ranking 2011/12, where not a single Malaysian university is included, has punctured the elation and euphoria just two months ago over the QS 200 World University Rankings 2011/12 which saw University of Malaya making to the top 200 Top Universities moving 40 places to 167 compared to 2010.

In the QS World University Rankings 2011/12 released in September, four other Malaysian universities slid down the rankings –University Kebangsaan Malaysia (UKM) ranked 279 this year compared to 263 in 2010; Universiti Sains Malaysia (USM) ranked 335 (309 last year); Universiti Putra Malaysia (UPM) ranked 358 (319 last year) and Universiti Teknologi Malaysia (UTM) at between 401 and 450 (365 last year).

But in the just-released THE 400 Top World University Ranking 2011/12, none of the Malaysian universities made it into the placings.

For the first time, Harvard (with Stanford) is at number two, failing to take the top spot in the list’s eight-year history when California Institute for Technology is named the best university in the world.

The rest of the Top Ten spots are Oxford (4), Princeton (5), Cambridge (6), Massachusetts Institute of Technology (70, Imperial College London (8), Chicago (9) and California (Berkeley) (10). Continue reading “No Malaysian university in Times Higher Education (THE) 400 Top World University Ranking 2011/12”

Is PSC a one-man show?

Patrick Lee
Free Malaysia Today
October 6, 2011

Pakatan Rakyat members tick off Ongkili for making decisions without consultation and barring Bersih from attending the meetings.

KUALA LUMPUR: Pakatan Rakyat MPs in the Parliamentary Select Committee (PSC) for electoral reforms have rapped its chairman for making decisions without consulting the group first

PAS Kuala Krai MP Hatta Ramli said that PSC chairman Maximus Johnity Ongkili jumped the gun by announcing nationwide public hearings, and also barring Bersih 2.0 from attending the PSC’s meetings.

“This may not be a big issue, but (the fact remains) that the decision was made by him without consultation. The first meeting hasn’t even been held… decisions should have been made then, but he seems to have decided himself.”

“Is this a one-man-show or a committee of nine people?” asked Hatta, when talking to reporters at the Parliament lobby here today. Continue reading “Is PSC a one-man show?”

Steve Jobs – Stay Hungry. Stay Foolish.

Steve Jobs
1955-2011

Stanford Commencement address delivered by Steve Jobs, CEO of Apple Computer and of Pixar Animation Studios, on June 12, 2005.

I am honored to be with you today at your commencement from one of the finest universities in the world. I never graduated from college. Truth be told, this is the closest I’ve ever gotten to a college graduation. Today I want to tell you three stories from my life. That’s it. No big deal. Just three stories.

The first story is about connecting the dots.
Continue reading “Steve Jobs – Stay Hungry. Stay Foolish.”

Nazri says Tajuddin did not disclose interests in MAS deals

By Shannon Teoh
The Malaysian Insider
Oct 06, 2011

KUALA LUMPUR, Oct 6 — The government said today that Tan Sri Tajuddin Ramli had breached the Companies Act by not disclosing his interests when he was chairman of Malaysia Airlines (MAS).

But Minister in the Prime Minister’s Department Datuk Seri Nazri Aziz said that the fine incurred by Tajuddin has been postponed as the case involves a civil suit that has not been resolved.

The de facto law minister said that reports made by the national carrier against its former boss had been referred to the Attorney-General in 2006.

“Based on the investigation, evidence shows that he had breached section 131 of the Companies Act which involves ‘disclosure of interests’.

“As the case involves a civil claim that has not been resolved, he asked the Attorney-General’s Chambers to delay the compound. The A-G’s Chambers has granted the request,” Nasri said in a written reply to Lim Kit Siang (DAP-Ipoh Timor) in Parliament today. Continue reading “Nazri says Tajuddin did not disclose interests in MAS deals”

Pressure on Najib to change or be changed, says Time

By Debra Chong
The Malaysian Insider
Oct 06, 2011

KUALA LUMPUR, Oct 6 — International weekly Time has likened Datuk Seri Najib Razak to other authoritarian leaders in Southeast Asia and foresees sweeping reforms led by a media-savvy youth will shake up the entire region.

But the magazine said the prime minister has taken heed of the need for change and has begun initiating changes that include the repeal of outdated laws covering security and the media.

“Southeast Asians… know what it’s like to live under authoritarian regimes and rulers. The latter range from brutal autocrats (Burma’s recently-retired General Than Shwe) to self-styled strongmen (Cambodia’s Hun Sen) to leaders who benefit from repressive laws that safeguard the predominance of a single party (Malaysia’s Najib Razak),” the influential news magazine said in its latest issue dated October 1.

It observed too there is a rising number of youths who are social-media-savvy who are is fed up with authoritarian rule and have grown bolder in saying so. Continue reading “Pressure on Najib to change or be changed, says Time”

Remembering 500 years of colonialism

— Tommy Thomas
The Malaysian Insider
Oct 05, 2011

OCT 5 — The Malay Peninsula was colonised 500 years ago this year, and its significance in our history should be marked in some way by universities and scholars. We should be having public seminars and academic conferences to remember and discuss this aspect of our history in its 500th anniversary. I am surprised that nearly half a year has passed, and no university has publicly announced any such initiative.

Remembering that the Malay Peninsula was colonised half a millennium ago is one way to remind the post-independence generation of Malaysians to be grateful for Merdeka. It is critical to teach the present generation about the dangers of empire and colonialism so that we can celebrate what independence means and pay tribute to the people who fought for it. Parts of the Malay Peninsula have only experienced 54 years of self-governance since 1511 when the Portuguese invaded and colonised Malacca. Soon after the founding of Malacca by Parameswara in 1403, it rapidly developed into a major entrepot in Southeast Asia, with traders from the Indonesian archipelago, China, India and Arabia crowding its marketplace. Admiral Cheng Ho led the then greatest naval expedition to Malacca and could have easily taken Malacca by force. The Chinese did not do that; instead, they were content to allow Malacca to govern itself through the Malacca Sultanate. Hence, throughout the 15th century, no foreign power colonised Malacca. Continue reading “Remembering 500 years of colonialism”

Pakatan Rakyat Budget 2012 (Part 10 of 10)

9 2012 Allocations

9.1 Auctioning APs, enhancing collections and higher oil prices will grow revenue

Pakatan Rakyat notes that prospective economic turbulence may reduce revenues from existing sources. However, Pakatan Rakyat also recognises that the ineffectiveness of the Barisan Nasional government provides headroom for revenues to be raised without further increasing the burden on honest, tax-paying citizens. For example:

  • The full value of government concessions and permits is not always extracted. These are instead offered at low valuations or prices to favoured parties who then reap super-normal and rent-seeking profits;

  • High levels of illicit activity are tolerated. For example, it is estimated that nearly 4 out of 10 packets of cigarettes consumed in Malaysia are illicit43 – taxes have not been paid. This illicit trade has soared by 67% in the 7 years between 2003-10. Illicit trade results in direct opportunity losses to the government from revenue foregone. In addition, it also impedes private enterprise and employment opportunities as legitimate tax-paying businesses grapple against the illicit traders. Continue reading “Pakatan Rakyat Budget 2012 (Part 10 of 10)”

Pakatan Rakyat Budget 2012 (Part 9 of 10)

8 Public Finance Strategy – the Pakatan Rakyat budgetary framework

8.1 Rationalising Expenditures, Efficiency and Value for Money
The Pakatan Rakyat government will strive to contain expenditures with the ultimate objective of ensuring the long-term sustainability of public expenditures while supporting the continued growth of the economy and the achievement of a high quality of life for all the rakyat.

Rationalising expenditures will restore fiscal space for Malaysia to face future adversities from global perturbations and ameliorate the uncertainties from the accelerating debt burden facing future generations of Malaysians.

In the short-run, while limiting expenditures, Pakatan Rakyat will put in place resolute policies to improve the efficiency of public outlays and simultaneously generate greater value for money. This will bring immediate and direct benefits to the rakyat in the form of better public services (education, health, education and social services), employment prospects, security, and infrastructure. Continue reading “Pakatan Rakyat Budget 2012 (Part 9 of 10)”

Pakatan Rakyat Budget 2012 (Part 8 of 10)

7 Thrust 3: Empowering Malaysians

7.1 Political Reforms- Democracy Now
Five decades on, democracy as practised in Malaysia today is little more than a shade of its former glory as various key public institutions have been routinely compromised by an unchecked Federal Government. Thus, Pakatan Rakyat is committed to immediately implementing the following reforms:

  • To revoke all existing emergency proclamations and repeal all laws that provide for detention without trial, as outlined in the draft Emergency Revocation Act (Akta Pemansuhan Darurat) submitted by Pakatan Rakyat in the March 2011 parliamentary session.

  • To restructure the Public Complaints Bureau (Biro Pengaduan Awam) into an Ombudsman institution.

  • To place key public institutions including the Auditor-General’s Department, Department of Statistics, Judicial Appointments Commission, the Malaysian Anti-Corruption Commission (SPRM), the Election Commission (SPR), and the Malaysian Human Rights Commission (SUHAKAM), and an Ombudsman institution under the purview of Parliament.

  • To ensure freedom of the media by removing all discretionary licensing requirements via the repeal of the Printing Presses and Publications Act 1984. In lieu of this, an independent and self-regulating media council will be put in place. Continue reading “Pakatan Rakyat Budget 2012 (Part 8 of 10)”

Pakatan Rakyat Budget 2012 (Part 7 of 10)

6 Thrust 2: Sustainability

6.1 Inclusive growth
One of the most important ways for Malaysians to contribute to our country’s progress is by being productive, working citizens.

However it is evident that the vast majority of Malaysians have not reaped the benefits of their work. Under the Barisan Nasional Federal Government, overall income levels remain low, inequality has leveled out at comparatively high levels and deep pockets of poverty continue to exist, as discussed earlier.

The current policies of centralising powers and funding with the federal government will, if continued, foster even more geographical concentration and further amplify rural-urban differences. Pakatan Rakyat will focus on developing income-earning opportunities across the economy and the nation.
Continue reading “Pakatan Rakyat Budget 2012 (Part 7 of 10)”

Pakatan Rakyat Budget 2012 (Part 6 of 10)

5 Thrust 1: Empowerment, Opportunities and Dignity for All Malaysians

5.1 All Malaysians and government must collaborate to restore dignity
The holistic economic and structural policies of Pakatan Rakyat will:

  • Restore dignity to all working Malaysians and their families.Dignity through improved skills, increased productivity, higher incomes, better job conditions and better quality of life;
  • Re-establish incentives for businesses and investors to upgrade and launch innovative high-value added product and services activities, and
  • Enhance the motivation of government employees to facilitate this bold transformation process.

But the Pakatan Rakyat government cannot carry out these essential policies by itself and in isolation. The rakyat, as employees and employers; as housewives, caregivers and students, and most importantly as contributing citizens must play their individual and collective roles and take their place in advancing this brave agenda to move Malaysia forward to greater heights to stand tall globally.
Continue reading “Pakatan Rakyat Budget 2012 (Part 6 of 10)”

Police fired tear gas, broke rules in Tung Shin incident

The Malaysian Insider
Oct 04, 2011

KUALA LUMPUR, Oct 4 — Riot police broke their own standard operating procedures (SOP) by firing tear gas when dispersing Bersih 2.0 rally marchers at the Tung Shin Hospital on July 9, a Health Ministry investigation has concluded.

Home Ministry secretary-general Tan Sri Mahmood Adam said tonight that errant policemen would be referred to the police’s disciplinary board.

“The investigation results concluded that there were unethical actions which were beyond the SOP of the Royal Malaysian Police when enforcement was performed on rally participants who were wrongly using the hospital premises,” Mahmood said in a statement.

Putrajaya and police had earlier denied any wrongdoing despite proof given by Bersih and those at the rally. Continue reading “Police fired tear gas, broke rules in Tung Shin incident”

Pakatan Rakyat Budget 2012 (Part 5 of 10)

4 Policy Highlights

4.1 Spending RM220 billion more effectively, while reducing the deficit

The global uncertainties and prospect of lack-lustre private demand would ordinarily call for pump-priming and stimulus measures by the government.

However, Malaysia’s finances, after 13 consecutive years of budget deficits by the Barisan Nasional government, no longer permits massive stimulus packages. On the contrary, the recent experiences of crises in countries with massive deficits eg the United States, United Kingdom and Greece, calls greater attention to reducing budget deficits.

Against this backdrop, Pakatan Rakyat will strive to maintain the total level of federal government spending at RM220 billion10 in 2012. Pakatan Rakyat practices of competency, accountability and transparency will result in:
Continue reading “Pakatan Rakyat Budget 2012 (Part 5 of 10)”

Pakatan Rakyat Budget 2012 (Part 4 of 10)

3 Malaysia Today

Malaysia, too, has less fiscal options than before in weathering the impending turbulence:

  • In 2007, before the 2008/09 crisis, our federal budget deficit was RM21 billion and total federal debt was RM267 billion, equivalent to 42% of GDP;

  • For 2011, our federal budget deficit is expected to hit RM45 billion and total federal debt was already RM437 billion as at the end of June, equivalent to about 53% of GDP8;

  • Indeed, ratings agency Fitch downgraded our long term RM sovereign debt rating to A from A+ in Feb 2009. Malaysiahas not been able to secure a return to A+ even though the global economic situation subsequently stabilised and improved. The Barisan Nasional government continued to expand spending after prime minister Najib assumed leadership in Mar 2009, even though stimulus measures were no longer necessary.

The scope for pump-priming and stimulus measures in the face of another slowdown is now limited. But we still have strengths and alternatives: Continue reading “Pakatan Rakyat Budget 2012 (Part 4 of 10)”

Pakatan Rakyat Budget 2012 (Part 3 of 10)

2 The Global Backdrop
The world economy is entering another period of turbulence and uncertainty following two years of tentative recovery. It now seems clear that the US-led response of easing monetary policy following the 2008/09 financial crisis bought only temporary respite.

The extensive monetary easing masked the structural imbalances in the world economy and allowed “business as usual” to continue. Asian economies continued to depend heavily on exports, particularly to the developed, western economies.

In the meantime, the US and EU governments recorded huge increases in sovereign debt as they eased monetary policy:

  • US government debt has more than doubled since 2008, ballooning from US$7.0 trillion in 2008 to bump up against its original ceiling of US$14.3 trillion in Aug 2011. The ceiling was raised only at the last minute after a bruising political battle between Democrat President Obama and the Republican-dominated Congress; and

  • In the European Union, sovereign debt worries are expanding. Starting with Ireland and Greece, concerns extended to Spain and, most recently, Italy. Total sovereign debt of the 27 Euro nations soared 26% in two years to €9.8 trillion in 2010 from €7.8 trillion in 2008.

Continue reading “Pakatan Rakyat Budget 2012 (Part 3 of 10)”

Pakatan Rakyat Budget 2012 (Part 2 of 10)

CONTENTS