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.
teo_john@yahoo.com
