Cut subsidies! Stop giving financial support for fuels, foods and tolls! Slash off the burdens of government before our country goes bankrupt by 2019! Indeed, the newspaper headline is a powerful tool to seize people attention and most importantly, their agreement on one issue. It is certainly unnecessary to shock and frighten the people with the doomsday warning that the country may go bankrupt within a decade if the subsidies continued.
Few days ago, I noticed a status in Facebook saying that “Low-priced goods, government spending surplus and a well-performing economy can’t be happened in a same time, according to the principle of economics! Cutting subsidy is the best strategy now” At first, I thought that this guy must have created his very own theory. If government stop giving subsidy isn’t the price of goods will be higher? Besides, a well-performing economy do happens when government spends more (deficit). The best example here would be our much-publicized 10.1% GDP growth in Q12010. Lastly, why can’t a well-performing economy cannot maintain a low-priced goods market?
“Undoubtedly, he is just a self-claimed economist who knows nothing about economics but blowing blindly according to his whims. Maybe the Chinese newspapers’ articles inject too much of confidence into him to draft such outrageous status in Facebook,” As my mind flooded with objections, curiosity and little bit of Vincent Lim-like spirit of participation, I denied his opinion (although he may copied it from somewhere - http://opinions.sinchew-i.com/node/14880). It didn’t stop there, he wrote an almost-essay-typed reply which sounds so professional (of course, my suspicion on copying from somewhere was growing at that time). Again, I denied it and this time surprisingly, he quite agrees with me. (Maybe he was running out of ideas) Well, frankly speaking, what I see is that the nation resources and revenue have been mismanaged to the extent that apart from paying income tax.
What’s the root cause? Is the government spending on things which benefit only some individuals like the infamous Disneyland trip, full page advertisement in the US, etc.? (I can go to hundreds of pages with just examples here) The attitude of “u help me, I help u” can only suggest improper management of public funds. If our nation’s leaders do not have that mentality and matureness to manage the country properly, at least the readers should have it.
Well, let’s examine some of the recommendations of the subsidy rationalization lab:
· Reduction of gas subsidy, resulting in an increase in electricity tariffs. However, most households will not be affected as the move will only affect those consuming more than 200kWh.
· Toll rates to increase in mid-2010 as per concession agreement except for highways without alternative toll-free routes.
· Outpatient treatment at public hospitals to be increased from RM1 to RM3. In-patient treatment will also increase, depending on the wards (Class One, Two or Three), from between RM3 and RM80, to between RM6 to RM160.
· Text book loan scheme and tuition subsidy aid to be abolished. Students will also have to pay for public examination fees.
· Foreign students will pay full fees at public universities.
· Local undergraduates and postgraduates to pay more in student fees, ranging from RM300 to RM800.
Judging from the recommendations, I think government should be looking at cutting down their self-created wastages rather than trying to remove subsidies. Subsidies should also continue for basic food items, including cooking oil and gas. As we all know, services sector plays a significant role in creating wealth for our country especially the food and restaurant industry. If such a cut being anticipated, well, my mum will be telling me that “I’m gonna cook again this coming weekends”
The justification that government used for cutting subsidy for tolled-highway is there are alternative government roads. That money should be used to upgrade existing government roads - and building new alternative roads. But, where there are no alternative government roads, like the much-used KL to Karak. Isn’t that sound ridiculous? It brings the same meaning as safe up the funding for the department that is productive and uses the saved one to build a new department that still-not-familiar with its function. If there are better alternative roads, why doesn’t the government build it at first? Also, why again build the alternative roads that could have again destroy jungles and if possible, why don’t use the exploitable land for better economic activities such as plantation?
One thing for sure, the government is trying to demonize 'subsidies' - and that is wring because these subsidies benefit the rakyat generally, and this is good as the majority of Malaysians are still poor and fall in the lower-income group. Think properly, if there is really no more subsidies, isn’t the poor will become poorer while most of the affluent one remain unaffected, the income gap will be widen! (Erm…maybe the “self-claimed economist” who posted up the status is a rich guy and he doesn’t really need to bother the subsidy cut since he can afford all of them. And the funny thing is that he proudly declared himself was in a neutral-standing!)
The Petaling Jaya Utara MP told The Malaysian Insider that while the government has outlined ways in which to gradually lessen subsidies, other “main causes of debts” had not been carefully addressed. According to Pua, the issue of subsidies was a small problem compared to the actual cause of Malaysia’s huge deficit problem. The DAP man claimed that the main cause of debts was due to huge government expenditure where major problems of wastage of funds and corruption remained unsolved. “(Besides that) we see things like the giving out of interest free loans to private companies like Syabas, those are examples which must be addressed. Subsidy is only one of the smaller factors,” said Pua. “I think IPPs (Independent Power Producers) was highlighted quite well up there, they take about RM13 billion in gas subsidies per year. Compare that against food subsidy bill, RM3.4 billion. Where the government should be focusing their attention on?” said Pua. “If you increase the burden on the people but you maintain the billions of profits for IPPs that would be a very unfair policy, (then) you are creating an additional burden,” he said.
Now there is a lot of wastage of money by reason of 'privatization'...tendering out, etc. If your pipe burst, no longer does the JBA come and do the repairs - they give it out to a contractor. Money could have been saved if the JBA (or the JKR) did these minor maintenance and repair works. Same with holes on the road - now a tender...and some private contractor ends up doing the job. Not only is there a delay ...but it is also a lot of waste of money.
There are so many ways that our government can save money - and I would say cutting subsidies is not really the way. As it is, it is already near impossible to survive as a sole-bread winner family because wages were kept low for so long. In big cities like Kuala Lumpur, you can’t really survive with RM3000 monthly salary. Now both spouses are forced to work, and then the Ministry of Women, Family and Community Development will start complaining that the fertility rate is decreasing.
Fuel subsidies - well, Malaysia was not interested in improving and developing public transport systems. In fact, some say that they made sure it was bad...and undependable - so much so that people were forced to get their own cars or motorbikes just to get to work. (Ask my buddies that having their internship in city centre and you will get response like “LRT sucks!” and “I wish to have a pair of wings!”) If there was an effective public transport system, there will be fewer destructive gas-producing cars on the road - hence less fuel used and in turn, fewer fuel subsidy. Besides, then traffic polices are not really doing their duties. Traffic jams are still one of the unattractiveness of Malaysia. One of the typical practice in private sector is pay rise is depending on performance. Thus, same should be applied in public sector where the police’s pay rise should be dependent on KPI. Simplistically put, a net exporting country like Malaysia should profit when global oil prices increase. Demand for oil is ever increasing, but the limited supply pushes the value of this prized commodity up. An oil-rich country like Malaysia, which is projected to be a net exporter until 2014, is making more money when prices skyrocket. Why is the country suffering from the effects of global oil prices then?
One of the bloggers says “Sometimes people have to learn the hard way. I always advise my son that not to ride his bicycle too fast, he thinks he was good and one day he fell and bruised and cut himself. Same can be applied for Malaysia. Why does a nation or a person become a bankrupt? Because, it is spending more than it’s earning. Simple, remember the excesses the government paid for hammers, screwdrivers, government contract, army uniforms and so on …..This way of excessive spending will surely drive a nation to bankruptcy. Monies lost in PKFZ, motorcycle company bought for half a billion ringgit and then sold for 1 Euro are all excesses. Who will be bankrupt at the end? – Malaysian. “
“My worry is that if we vote not to do this, our children will condemn us. A saying that I live by is that in life, there is no gain without pain, and there is no breakthrough without breakdown,” Minister in the Prime Minister's Department Idris Jala said to crowd of about 1,000, with some seen nodding in agreement.
Holyshit!!!! My worry is that if we vote to do this, my family can’t even have a proper three meals a day and that’s the time we condemn government. (Unfortunately, it could be too late). No gain without pain? Who is getting pain and of course, who will be getting gain? No breakthrough without breakdown? So, that means cutting subsidies is a breakdown in order to achieve future breakthrough? Goes back to Milton Friedman’s quote “One of the greatest mistakes is to judge policy by intention rather than results”
One of the stupidest things being done by this self-claimed economist is follow everything that appears on newspaper and never has a second thought of it. He even went further by using a socialist nation – North Korea to make a comparison of public services. At the moment being bang off, he quickly covers that by saying it is merely for extra information and pretends like knowing everything.
The excessive debts and distortions in Malaysia’s economy cannot be all attributed to subsidies alone. Needless to say, greater problem lies in corruption and political uncertainties.
Few days ago, I noticed a status in Facebook saying that “Low-priced goods, government spending surplus and a well-performing economy can’t be happened in a same time, according to the principle of economics! Cutting subsidy is the best strategy now” At first, I thought that this guy must have created his very own theory. If government stop giving subsidy isn’t the price of goods will be higher? Besides, a well-performing economy do happens when government spends more (deficit). The best example here would be our much-publicized 10.1% GDP growth in Q12010. Lastly, why can’t a well-performing economy cannot maintain a low-priced goods market?
“Undoubtedly, he is just a self-claimed economist who knows nothing about economics but blowing blindly according to his whims. Maybe the Chinese newspapers’ articles inject too much of confidence into him to draft such outrageous status in Facebook,” As my mind flooded with objections, curiosity and little bit of Vincent Lim-like spirit of participation, I denied his opinion (although he may copied it from somewhere - http://opinions.sinchew-i.com/node/14880). It didn’t stop there, he wrote an almost-essay-typed reply which sounds so professional (of course, my suspicion on copying from somewhere was growing at that time). Again, I denied it and this time surprisingly, he quite agrees with me. (Maybe he was running out of ideas) Well, frankly speaking, what I see is that the nation resources and revenue have been mismanaged to the extent that apart from paying income tax.
What’s the root cause? Is the government spending on things which benefit only some individuals like the infamous Disneyland trip, full page advertisement in the US, etc.? (I can go to hundreds of pages with just examples here) The attitude of “u help me, I help u” can only suggest improper management of public funds. If our nation’s leaders do not have that mentality and matureness to manage the country properly, at least the readers should have it.
Well, let’s examine some of the recommendations of the subsidy rationalization lab:
· Reduction of gas subsidy, resulting in an increase in electricity tariffs. However, most households will not be affected as the move will only affect those consuming more than 200kWh.
· Toll rates to increase in mid-2010 as per concession agreement except for highways without alternative toll-free routes.
· Outpatient treatment at public hospitals to be increased from RM1 to RM3. In-patient treatment will also increase, depending on the wards (Class One, Two or Three), from between RM3 and RM80, to between RM6 to RM160.
· Text book loan scheme and tuition subsidy aid to be abolished. Students will also have to pay for public examination fees.
· Foreign students will pay full fees at public universities.
· Local undergraduates and postgraduates to pay more in student fees, ranging from RM300 to RM800.
Judging from the recommendations, I think government should be looking at cutting down their self-created wastages rather than trying to remove subsidies. Subsidies should also continue for basic food items, including cooking oil and gas. As we all know, services sector plays a significant role in creating wealth for our country especially the food and restaurant industry. If such a cut being anticipated, well, my mum will be telling me that “I’m gonna cook again this coming weekends”
The justification that government used for cutting subsidy for tolled-highway is there are alternative government roads. That money should be used to upgrade existing government roads - and building new alternative roads. But, where there are no alternative government roads, like the much-used KL to Karak. Isn’t that sound ridiculous? It brings the same meaning as safe up the funding for the department that is productive and uses the saved one to build a new department that still-not-familiar with its function. If there are better alternative roads, why doesn’t the government build it at first? Also, why again build the alternative roads that could have again destroy jungles and if possible, why don’t use the exploitable land for better economic activities such as plantation?
One thing for sure, the government is trying to demonize 'subsidies' - and that is wring because these subsidies benefit the rakyat generally, and this is good as the majority of Malaysians are still poor and fall in the lower-income group. Think properly, if there is really no more subsidies, isn’t the poor will become poorer while most of the affluent one remain unaffected, the income gap will be widen! (Erm…maybe the “self-claimed economist” who posted up the status is a rich guy and he doesn’t really need to bother the subsidy cut since he can afford all of them. And the funny thing is that he proudly declared himself was in a neutral-standing!)
The Petaling Jaya Utara MP told The Malaysian Insider that while the government has outlined ways in which to gradually lessen subsidies, other “main causes of debts” had not been carefully addressed. According to Pua, the issue of subsidies was a small problem compared to the actual cause of Malaysia’s huge deficit problem. The DAP man claimed that the main cause of debts was due to huge government expenditure where major problems of wastage of funds and corruption remained unsolved. “(Besides that) we see things like the giving out of interest free loans to private companies like Syabas, those are examples which must be addressed. Subsidy is only one of the smaller factors,” said Pua. “I think IPPs (Independent Power Producers) was highlighted quite well up there, they take about RM13 billion in gas subsidies per year. Compare that against food subsidy bill, RM3.4 billion. Where the government should be focusing their attention on?” said Pua. “If you increase the burden on the people but you maintain the billions of profits for IPPs that would be a very unfair policy, (then) you are creating an additional burden,” he said.
Now there is a lot of wastage of money by reason of 'privatization'...tendering out, etc. If your pipe burst, no longer does the JBA come and do the repairs - they give it out to a contractor. Money could have been saved if the JBA (or the JKR) did these minor maintenance and repair works. Same with holes on the road - now a tender...and some private contractor ends up doing the job. Not only is there a delay ...but it is also a lot of waste of money.
There are so many ways that our government can save money - and I would say cutting subsidies is not really the way. As it is, it is already near impossible to survive as a sole-bread winner family because wages were kept low for so long. In big cities like Kuala Lumpur, you can’t really survive with RM3000 monthly salary. Now both spouses are forced to work, and then the Ministry of Women, Family and Community Development will start complaining that the fertility rate is decreasing.
Fuel subsidies - well, Malaysia was not interested in improving and developing public transport systems. In fact, some say that they made sure it was bad...and undependable - so much so that people were forced to get their own cars or motorbikes just to get to work. (Ask my buddies that having their internship in city centre and you will get response like “LRT sucks!” and “I wish to have a pair of wings!”) If there was an effective public transport system, there will be fewer destructive gas-producing cars on the road - hence less fuel used and in turn, fewer fuel subsidy. Besides, then traffic polices are not really doing their duties. Traffic jams are still one of the unattractiveness of Malaysia. One of the typical practice in private sector is pay rise is depending on performance. Thus, same should be applied in public sector where the police’s pay rise should be dependent on KPI. Simplistically put, a net exporting country like Malaysia should profit when global oil prices increase. Demand for oil is ever increasing, but the limited supply pushes the value of this prized commodity up. An oil-rich country like Malaysia, which is projected to be a net exporter until 2014, is making more money when prices skyrocket. Why is the country suffering from the effects of global oil prices then?
One of the bloggers says “Sometimes people have to learn the hard way. I always advise my son that not to ride his bicycle too fast, he thinks he was good and one day he fell and bruised and cut himself. Same can be applied for Malaysia. Why does a nation or a person become a bankrupt? Because, it is spending more than it’s earning. Simple, remember the excesses the government paid for hammers, screwdrivers, government contract, army uniforms and so on …..This way of excessive spending will surely drive a nation to bankruptcy. Monies lost in PKFZ, motorcycle company bought for half a billion ringgit and then sold for 1 Euro are all excesses. Who will be bankrupt at the end? – Malaysian. “
“My worry is that if we vote not to do this, our children will condemn us. A saying that I live by is that in life, there is no gain without pain, and there is no breakthrough without breakdown,” Minister in the Prime Minister's Department Idris Jala said to crowd of about 1,000, with some seen nodding in agreement.
Holyshit!!!! My worry is that if we vote to do this, my family can’t even have a proper three meals a day and that’s the time we condemn government. (Unfortunately, it could be too late). No gain without pain? Who is getting pain and of course, who will be getting gain? No breakthrough without breakdown? So, that means cutting subsidies is a breakdown in order to achieve future breakthrough? Goes back to Milton Friedman’s quote “One of the greatest mistakes is to judge policy by intention rather than results”
One of the stupidest things being done by this self-claimed economist is follow everything that appears on newspaper and never has a second thought of it. He even went further by using a socialist nation – North Korea to make a comparison of public services. At the moment being bang off, he quickly covers that by saying it is merely for extra information and pretends like knowing everything.
The excessive debts and distortions in Malaysia’s economy cannot be all attributed to subsidies alone. Needless to say, greater problem lies in corruption and political uncertainties.
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