Published: Wednesday November 20, 2013 MYT 12:00:00 AM
Updated: Wednesday November 20, 2013 MYT 7:50:47 AM
AS a retiree, I should be among the first to reject the implementation of Goods and Services Tax (GST).
Instead, I have been waiting anxiously for the GST to be introduced as this is not only an effective broad-based consumption tax system but also an effective system that could curb wastage, especially among the affluent.
Simply put, the more you consume, the more you need to pay.
To commence GST at a rate of 6% effective April 1, 2015 is definitely the right direction to go as revenue from the existing sales and service tax, currently at rates of 10% and 6% respectively, will then be terminated.
A responsible government has to be far-sighted and proactive in managing its economy.
We certainly do not want our country to suffer an economic crisis resembling the Eurozone debt crisis that erupted in Greece in 2010.
As expected, the International Monetary Fund (IMF) had to structure a rescue package to bail Greece out so as to curtail any contagious effect.
Unavoidably, major reforms and austerity measures had to be implemented by the Greek government to comply with the bailout terms to restore the economy.
The crisis caused prolonged high unemployment resulting in suffering among the people.
Many had to pawn whatever valuables they could lay their hands on to ensure that they had enough food for their families.
Malaysia’s economic outlook was downgraded from stable to negative by Fitch Agency recently due to its high public debt level, which stood at 53% of gross domestic product at the end of 2012.
This downgrade was indeed a wake-up call that prompted the Government to take proactive measures to arrest the unhealthy debt level.
Any prolonged delay in implementing effective fiscal policies to reduce the debt level will only bring us closer to another downgrade.
A second downgrade must be avoided at all cost, otherwise it may trigger an undesirable impact on our stock market before it spills over to the overall economy.
Perhaps the Government should consider reducing the subsidy on electricity and increasing the water tariff to curb wastage.
Obviously there is a need to increase the utility tariffs if we want the public to reduce consumption effectively.
Many low-income earners in my neighbourhood have more than one unit of air-conditioner at home. Many also incur bills of more than 50 cubic metres of water a month.
On average, a small family of four should consume around 20 cubic metres of water monthly but unfortunately, many of these families tend to consume twice the volume.
The Government has a responsibility to lead the nation to a higher level of economic success but at the same time it mustn’t overlook to inculcate healthy habits among its people in reducing wastage.
Obviously, Malaysians need to be educated to appreciate and consume natural resources, i.e. fuel, electricity and water, wisely.
This is not only important in reducing wastage but also in cutting down carbon emission in our environment.
The generous subsidy policy enjoyed by Malaysians for the past decades has to be curtailed rather quickly by effective fiscal policies.
Otherwise our economy may eventually take a tumble one day that may cause untold suffering to the nation.
Let’s not forget that the heavy subsidy bill has all along been financed by our crude oil revenues.
How much longer can our depleting crude oil reserves be able to foot such a bill that costs billions annually?