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Wednesday, April 23, 2014

No GST on salmon and lobster

Selena Tay | April 23, 2014

Blame frivolous government spending for the nation's financial woes, not the subsidies for the people.

The federal government has announced that the GST (Goods & Services Tax) will not burden the poor. Really?

This columnist finds it difficult to believe when various types of salmon and lobster are exempted from GST while canned sardines, baked beans and instant noodles will bear the full brunt of the GST.

The food products given the GST waiver include Pacific salmon, Atlantic salmon and Danube salmon while the lobsters are Norway lobster and rock lobster. Trout, crayfish and oysters too are among the food products to be given the GST waiver.

Now you see how off-target the government is. Are the poor going to eat salmon, lobsters and oysters on a very regular basis? This is a clear indication that the government is out of touch with the pulse of the rakyat.

Certainly the slogan of ‘People First’ is untrue, to put it mildly.

Besides implementing GST on instant noodles, the government is blaming the subsidies given to the rakyat for the soaring federal debt.

“Even the Prime Minister has resorted to what can be labelled as an ‘alarmist tactic’ of mooting the idea of Malaysia going bankrupt if GST is not implemented,” said Dzulkefly Ahmad, the former PAS Kuala Selangor MP who is a strong opponent of the GST.

The government saying that the subsidies are too costly for the nation’s coffers is an extremely flimsy statement that seeks to absolve the government of managing the nation’s finances responsibly by putting the blame squarely on the rakyat.

Instead the government cajoles the rakyat by saying that GST will help the government to help the rakyat. It is another case of ‘You help me, I help you’.

We are also told that the GST will end the 16-year fiscal deficit and thus our sovereign rating will avoid downgrading.

Thus GST is the solution for the nation’s fiscal woes. In actual fact however, GST is the wrong prescription to cure the nation’s ills because GST will dampen private consumption (household expenditure) which the government depends on to fuel GDP (Gross Domestic Product) growth.

Rising price hikes

Yet the government is adamant on implementing GST. The outcome will be fatal to the rakyat especially the poor and the low-income group who will be drowning to cope with the rising price of goods due to the effect of the current subsidy cuts and future subsidy cuts.

Then GST will truly come to mean ‘Go Strangle Them’ as the rakyat will be strangled by price hikes.

The government’s move to attribute the federal debt to the subsidies for the rakyat is indeed despicable, deplorable and diabolical for it simply means that the rakyat is a burden to the nation and the government.

By saying that the subsidies caused the federal debt to soar and by implementing ‘subsidy rationalisation’, the government is in effect saying that the rakyat contributed to the federal debt.

And thus the subsidies are irrational spending which needs to be rationalised. This implies that spending on the rakyat is irrational!

The government must be fair and play its role accordingly. It is unjust of them to only expect the rakyat to sacrifice our subsidy allocation so as to rescue the nation from bankruptcy when it is frivolous government spending that is the cause of the nation’s financial woes.

“What about the massive subsidies given to the IPPs (Independent Power Producers), the grants to various utility concessionaires, tax-breaks and incentives to industries and corporations, etc? These are subsidies too by whatever name they are called but why aren’t these subsidies ‘rationalised’ as well?” questioned Dzulkefly.

The PAS man also noted that additionally debts were incurred due to sustaining bloated prices for contracts and leakages because of corruption and the litany of sins of omission and commission are shameful much as they have caused colossal losses of taxpayers’ money.

“Everywhere there is wastage, from procurement and contract to asset and revenue management as can be seen in the yearly audit report wherein the corruption-ridden and crony capitalistic or rent-seeking activities of the nation’s administrators stink to the high heavens and are seemingly unabated,” remarked Dzulkefly.

The extra revenue obtained from GST will only encourage the government to spend more given the fact that they are prone to fiscal non-discipline.

Prudent spending

The Finance Minister-cum-Prime Minister is also in the habit of going back to parliament to seek additional funds.

“If he still continues to do so after GST is implemented, it would show that even making use of the GST as the rakyat’s money-churning machine is still not enough when the government continues to spend and spend without thinking,” added Dzulkefly.

With the GST being imposed, the government must practice prudent spending.

Wanton wastage of the rakyat’s hard-earned income is definitely very wrong. But the day that the government is prudent in spending will be the day that the cow jumps over the moon.

Indeed, do not hold your breath waiting for such a day to come.

Selena Tay is a DAP member and a FMT columnist.

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