Nuffnang Add

Friday, February 28, 2014

Others need the cash more

Published: Wednesday February 26, 2014 MYT 12:00:00 AM 
Updated: Wednesday February 26, 2014 MYT 9:08:21 AM

I REFER to the article “17,000 turn down BR1M aid offer” (The Star, Feb 24) where these people felt they were not poor enough to qualify for the subsidy.

The magnanimous gesture from these considerate people shows that Malaysians have a high sense of responsibility not to accept subsidies if they feel they don’t deserve them.

I have also heard of parents who say it is not right for them to apply for educational aid or scholarships for their children as there are others who need the assistance more urgently.

I think the public are becoming more conscious that subsidies are a big burden on the government budget and should only be used for deserving cases to avoid wastage of public funds .

The high subsidies on fuel and rice are also encouraging smuggling activities in the border areas, and benefiting foreigners who buy the smuggled items.. I believe most Malaysians can accept the Prime Minister’s explanation why it is necessary to make further cut backs on the subsidies as part of the fiscal measures to tackle the annual problem of budget deficits and high amount of public debt.

In addition, the government is also scheduled to implement the long delayed Goods and Services Tax (GST) next year, after postponing it several times in the past.

The GST is important for strengthening the revenue system, which is weak because so few are paying income tax. Malaysia has also to prepare for the future when oil revenues start to decline.

The fiscal measures are challenging to the Government, and most of all to the Prime Minister, because there will be a lot of political risks in taking tough measures to put the Government’s finances on a secure footing and thereby enable the country’s development to proceed smoothly towards achieving the status of a developed country by 2020.

While strengthening the revenue collection through GST and implementing better enforcement on tax compliance, measures to curb wasteful spending and make Government purchases more efficient are also essential for balancing the budget and reducing borrowing. In fact , these austerity measures to weed out unnecessary spending are crucial towards making the Government’s case for fiscal reforms more receptive to the public.

Despite the political risks , the Government cannot back track on the fiscal, economic and other policy reforms under its Government (GTP) and Economic Transformation Programmes (ETP). as it will send a damaging signal to the business world and the financial markets that Malaysia is not serious on reforms.

In times of trouble, such an image can seriously bring down the economy and lead to business failures and unemployment, with all the social and political instability that goes with a failed economy.

I urge the Government to stand firm on its reform agenda. I am confident that with their maturity and sense of responsibility towards the future generation, most people will accept the reforms as a necessary sacrifice for a stronger country.

If we can learn from history, greatness to presidents and prime ministers comes from their determination to do what is best for their people.

Kuala Lumpur

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