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Friday, February 24, 2012

Much ado over Greece issue

Publication: NST
Date of publication: Feb 24, 2012
Section heading: Main Section
Page number: 024
Byline / Author: By John Teo

THE Greek sovereign debt crisis now hogging global headlines has predictably not escaped the imagination of our local politicians.

Not so long ago, Minister in the Prime Minister's Department Datuk Seri Idris Jala got public attention (as was most likely his original intention) that Malaysia may one day go as spectacularly bust as Greece appears to be heading. He was, of course, giving warning that unless government revenues are tightly aligned to government expenditures, the nation, much like individuals, can go bankrupt.

The DAP is not to be outdone. A Sabah DAP official, Junz Wong, reportedly said recently of the government's determination to implement the goods and services tax (GST) (something which, incidentally, our Asean neighbours the Philippines, Singapore and Thailand now have): Look at countries like France, Greece, Italy, Spain, etc; they all have implemented GST and what have happened to their economies today?

The DAP official added: It is the government's failure in its economic policies and management/allocation of the nation's resources which caused the problems.

Both the minister and opposition official are, of course, seeking to use the Greek (and general eurozone) economic crisis for their respective purposes - the minister on the need to look into new sources of government revenue as popular expectations on government increasingly pressure public expenditures and the DAP official denying that government revenue is a problem but expenditures may well be.

Both are in different ways off the mark. The minister conveniently neglected to mention that Malaysia does not suffer the severely compounding problem that afflicts much of the eurozone: little or no economic growth.

The DAP official is guilty of being highly selective (and contradictory to boot) on the lessons he seeks to draw from Europe. He seems oddly enamoured of the conservative American Republican Party's mantra of No new taxes while presumably also supporting Pakatan Rakyat ally Pas' ideas about a welfare state - surely one of the very root causes of the economic malaise now confronting the eurozone, with runaway public expenditures from ballooning and mostly unfunded or underfunded welfare entitlements.

What is now happening in Europe and America is turning most conventional political thinking about freedom and democracy on its head but our politicians (and Malaysians along with them) seem content to either bury their heads in the sand or see only what they want to see happening in the developed countries.

Conventional thinking holds that regular changes in government through elections are a basic requisite of good governance. Countries such as France, Greece, Italy, Spain and America all change governments as regularly as they come and look what now happens to them.

The realisation has only just begun to dawn that in the electoral contest for power, political parties everywhere tend to act almost exactly the same; that is, pandering to popular expectations of government handouts and other entitlements and, at the same time, ignoring the economic reality that such public giveaways can never be free but must be paid for somehow.

It is, therefore, correct to say that we are in danger of falling into the Greece trap but only in the broadest sense. As political contests for power become ever more intense, pressures build for sitting governments to offer ever more alluring sweeteners to voters. Overdue subsidy cuts also get postponed lest voters rebel.

Our government is only acting as any democratically elected government everywhere will do: acceding increasingly to populist pressures as the contest for votes intensifies. It at least has the honesty and no small courage to not hide voters from the reality that giveaways have to be properly funded and the only responsible way governments do so is by way of increased taxes.

The opposition still has some way to go to prove that it can be equally responsive to public pressures and responsible at the same time in confronting the hard and inescapable truths about public spending and taxation. Failing that, a fate perhaps as bad as Greece's definitely looms some day in our horizon.

A 65-year-old’s view of the Budget — Conrad Raj

FEBRUARY 23, 2012
FEB 23 — Last Sunday, two days after the Singapore Budget announcement, I reached the 65th year of my life. I went through Finance Minister Tharman Shanmugaratnam’s list of “goodies”. Plenty this year went to older Singaporeans and the lower-income but alas, not much of it applied to me.
The special employment credit to help attract and retain workers older than 50 is only for those earning up to S$4,000 (RM9,600) a month. Strike One.
The minister has also raised Central Provident Fund (CPF) contributions for those aged 50 to 55, 55 to 60 and 60 to 65. For people like me — those who are above 65 and continue to work — there is nothing.
Why not raise the interest rates on money with the CPF board? At present, balances with the CPF are paid 2.5 per cent per annum for money in the ordinary account and 4 per cent per annum for Special, Medisave and retirement accounts.
With inflation last year at over 5 per cent, CPF contributors are in danger of seeing their savings eroded (even though granted, putting money in the bank is even worse with savings accounts earning less than 0.5 per cent in most cases).
As most CPF contributions are in our ordinary accounts, perhaps paying 4 per cent across the board would be more welcome.
The earned income relief, however, is most welcome — if one is still working and drawing a salary — with such relief being doubled for those between 55 and 59 and going up to S$8,000 for those 60 and above.
While the silver housing bonus of S$20,000 and a similar amount for the enhanced lease buyback scheme are safety valves to unlock the value of one’s housing board flat, I hope to remain in my comfortable five-room flat, at least for the foreseeable future.
As the minister acknowledges, health costs is one of the biggest concerns of the elderly, and to be fair there has been considerable thought put into addressing the issue.
Expanding our healthcare service with the addition of hundreds of hospital beds, I hope, will ensure that there is enough capacity should there be a need for hospitalisation.
Also welcome is the intended doubling of the capacity of our long-term care services by 2020. The minister has promised more nursing homes, home-based health and social care services, day care and rehabilitation facilities, and senior activity centres.

Sunday, February 19, 2012

DAP Sabah unhappy with GST announcement

Posted on February 19, 2012, Sunday

KOTA KINABALU: DAP Sabah is disappointed with BN’s recent announcement that the GST (Good and Services Tax) will be implemented after an agreement was reached with the business sector.

Junz Wong, DAP Sabah state assistant secretary asked why the government was seeking the business community’s opinion when it was the rakyat that would be heavily affected.

“Businesses will just easily pass on the burden of GST to the consumers when GST is implemented,” he said.

Junz refuted claims by the BN government that implementing GST would help cope with the government financial health index and boost economic growth.

“Look at countries like France, Greece, Italy, Spain, etc; they all have implemented GST and what have happened to their economies today? “It is the government’s failure in its economic policies and management/allocation of the nation’s resources which caused the problems,” Junz said.

“If this government were to continue its corrupt practices, cronyism and nepotism, even if it were to implement GST at 20 per cent, it will still be useless except to lead Malaysia into quicker bankruptcy such as one faced by Greece.”

Junz Wong who is also DAPSY KK assistant Youth Chief added that the GST was supposed to be about the state raising new revenues to boost its emptying coffers.

“If GST comes on the back of an unreformed taxation system, it’ll be massively unfair to the rakyat.

BN has yet to even consider reviewing the taxation system which is supposed to go simultaneously with implementation of GST.

“Without net income gains for Malaysians and a reformed taxation system, plus removal of other economic distortions, the cost burden on Malaysians will be enormously disadvantageous and inequitable.

“Most Malaysians will be squeezed tighter with less purchasing power, moving downwards towards the poverty bracket and the poor will get poorer.

“So people, you have heard it. BN government will implement without your opinion. Though BN has failed to mention the date as to when the GST would be implemented, there is no doubt that this will happen after the next general election,” Junz said.