Malaysia: The Huff and Puff of Budget 2018

October 29, 2017

Malaysia: The Huff and Puff of Budget 2018

Image result for Najib and Zahid at Budget 2018Two Jokers in a Unity Pact to safeguard a kleptocratic and corrupt Malay-centric regime with 2018 Budget Proposals


COMMENT | Prime Minister Najib Abdul Razak and his team should learn how to manage public perception, than recycling year after year the same huffs and puffs that will just fade away after the general election.

Right after the election, we will again see the likes of minions Jamal Md Yunos (UMNO Sungai Besar division leader) and Gerakan Merak leader Mohd Ali Baharom (known also as Ali Tinju), veteran Abdul Rani Kulup, lecturer and Muslim convert Redzuan Tee Abdullah, Perkasa’s Ibrahim Ali, Isma’s Abdullah Zaik and extremists like Zakir Naik, becoming the heroes.

There will be others like the self-styled “Raja Bomoh” Ibrahim Mat Zin who hog the headlines. So far, Ibrahim has never been prosecuted despite appearing on the grounds of the Kuala Lumpur International Airport and making a nuisance of himself.

Image result for Hussain Najadi murder

To date, the investigation into the protest over a cross erected by a church in Taman Medan has not proceeded any further. What about the probe into people missing in action, such as Pastor Raymond Koh and several others? What about the death of Teoh Beng Hock and former customs officer Ahmad Sarbani Mohamed and the murder of banker Hussein Najadi?

What was the motive behind the killing of former Mongolian model Altantuya Shariibuu? Who was behind the Scorpene submarines scandal and after Abdul Razak Baginda was charged in France, why have investigations on the Malaysian side stalled? Who was behind the death of deputy public prosecutor Anthony Kevin Morais?

Instead of prosecuting people for their wrongdoings, we see the MP of Batu, Tian Chua agreeing to go to jail over a small matter which could have been solved at a personal level and coming out more as a hero of the people.

There will then be the same old issues again – the banning of use of the term “Allah” by non-Muslims; stateless Indian children; Chinese schools being threatened to be closed down; the likes of Abdullah Hussain’s book “Interlok” where Indians were called by names; and yes, a thousand and one issues that UMNO and its proponents would try to harp on.

Ordinary Malaysians like me are already fed up with all the polemics by now because the leaders have lost their credibility. A decision would have been made a long time ago.

We can only wait for the coming general election, when we will come out once again in droves like in the previous general election.

Outstanding problems

Image result for 1mdb

That is why despite all the huffs and puffs of the budget, we know it will not bring the country forward. While we will take what is rightfully ours, most of us look at the 1MDB scandal as the bigger problem that Najib has failed to solve.

For a long time, the Chinese community have been harping on the need for more Chinese schools. However, the Ministry of Education has been moving snail-slow on approval of the Chinese schools.

Applications for a new school have gone into a “black hole”. When I showed the news about 10 new Chinese schools being greenlit by Putrajaya to the chairperson of the board of governors of the affected school, he merely said, “Year after year, election after election, it is nothing but empty promises”.

Image result for tan sri ramon navaratnam

Economist Ramon Navaratnam@ASLI Public Policy Studies

Chairperson of ASLI’s Centre for Public Policy Studies, Ramon Navaratnam, pointed out to me that Sekinchan has had the most productive paddy growers in the country.

“Yet, they are not given the incentives to become even more productive,” he said. “The government should focus on the strengths of each community and boost their productivity even further.”

Licenses for fishing are given to cronies when the fisherpeople themselves are unable to get more licenses. With these cronies and Ali Baba licence holders, the prices of goods rise. The real beneficiaries are not the fisherpeople themselves, but some cronies.

Likewise, I pointed out the plight of taxi drivers in this country. Although mostly Bumiputera, they too have been earning pittances. Now with Uber and Grab, who is most badly hit? Taxi licenses should not be given to a consortium, but to individual taxi drivers to motivate them to work even harder.

According to Ramon, budget proposals must address the “structural problems of low productivity, rising unemployment, inflation, the weak ringgit, the brain drain, sustainability and the fight against extremism and bigotry.”

As fellow columnist R Nadeswaran rightly put it, “The prime minister, his ministers and the government must stop treating Malaysians as fools by making all kinds of statements which more than not, appear like a page from Grimm’s Fairy Tales”.

STEPHEN NG is an ordinary citizen with an avid interest in following political developments in the country since 2008.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

10 thoughts on “Malaysia: The Huff and Puff of Budget 2018

  1. Columnist R Nadeswaran rightly put it, “The prime minister, his ministers and the government must stop treating Malaysians as fools by making all kinds of statements which more than not, appear like a page from Grimm’s Fairy Tales”.

    It appears that the used formula has proven successful and succeeded for over three decades so why not continue the formula.
    Even the USA two party system In Government and the Western Capitalist Economic System is suspected and found to have been susceptible to ABUSE-FRAUD-CORRUPTION-COLLUSION-CRONYISM-EMBEZZLEMENT-BRIBERY-KICKBACKS-NEPOTISM Risks as evidenced by the surveys by ACFE as detailed in their REPORT TO NATION in addition to by other Financial Institutions and Reports by Transparency International and the ongoing debate on the legality of POTUS.
    All the above may prove THAT AS ABOVE MAY BE COMMON IN ALMOST ALL COUNTRIES IN THE WORLD though with varying degrees, that
    as they continue to elect the same people and follow the same system.

  2. Fiscal management is not Najib Razak’s cup of tea and that is why we must have a new Finance Minister of the calibre and integrity of a Tun Tan Siew Sin and a Governor, Bank Negara of Ismail Ali and Abdul Aziz Taha. Our Budget today is a tool of UMNO-BN politics.

    Collecting revenue is the easy part of the fiscal process. The real challenge in fiscal management is to ensure that is the national budget is well and prudently managed. It requires discipline and careful monitoring and control of public expenditures with the support of an efficient auditing system and a competent civil service. –Din Merican

    • The real challenge in fiscal management is to ensure that is the national budget is well and prudently managed. It requires discipline and careful monitoring and control of public expenditures with the support of an efficient auditing system and a competent civil service. –Din Merican

      Sadly this may be the missing link!!!!!

  3. Najib is an economic bumpkin. His creepy grinning throughout his budget shows what a hick he really is. China just basically said they will continue to inflate and our inflation tracks theirs which mean all the handout he is giving out will be negated. Yet he is pleased with himself.

    Also, his biggest projects, MRT, HSR and ECRL depend on rising real estate to pay it off, the wisdom in HK and Singapore is that it no longer works which saddles us with hundreds of billions taxpayer, most likely GST payers, will pay.

    • Public debts have rarely been paid any politician in power but just passed on to next gen. It may be based or like a pyramid scheme!!!

  4. Budget 2018 – The Lowdown

    Budget 2018, I believe to large segment of Malaysians, their thinking is, “Aah … just continue our regular day, it does not cut any ice to me” (doesn’t make much difference to me).

    The talking heads, especially from opposite side of the aisle (PH), have expectedly argued with convincing substance. From one hand, the Budget does not alleviate/lessen cost of living of the multitude, and on the other side, wage level is not ‘proven’ to show a rise. It certainly is not disposable income, it will remain negative for most of us.

    The arguments from the government mouthpieces are mostly groveling, nauseating really. The spins put forth lacks intellectual analytical depth and some are a laughter to listen to. One such is the ranking of UM in the international standing (THES – nothing under 600 best in the world, well, the good news is there are over 41,000 Universities in the world today). And another is the supposed confidence and growth of the economy. To the village simpletons and worse, for the urbanites, the economic growth doesn’t show.

    What’s missing from their dialogues are the fact that it is a DEFICIT Budget and the overall Debt Level of the country (both Public Sector and Private) that is inching to a worrying level, and by extension, the government’s capacity, or the lack thereof, to cover/service the debt cost or interest.
    More of this is elucidated below.

    GDP growth will not translate to increase wage, in actuality a 5% growth is regressive once inflation rate of 7% (largely) is accounted for. And it will give us a -2% negative growth, in real terms. Perhaps the sense of prosperity is merely felt at the top 1% of the people.

    Besides GDP is never a picture of the country’s Balance Sheet, or its schedule of Assets and Liabilities.

    By far, what the Budget does is to merely sprinkle ‘one-off’ goodies whilst largely maintaining existing ones (BRIM). In economy parlance, these one-offs are never meant to offer a meaningful multiplier effect, as the essence and reality of such monies, for most people, is to fill the gaps of cost-of-living deficits. Meaning, it serves to tide over current given financial predicaments, therefore reflecting a flat-lining trajectory. Virtually zero on new purchases, certainly not on new-fangled items/baubles. Just look at the retail outlets and the sort of merchandises thst are getting sold.

    Get the drift.

    Further, the purported increase in disposable income, between RM1,000 to 2,000 expected from the income tax rate downward-revision, is rather pitiful, a mere pittance. If at all, that will be used to cover cost-of-living shortfall, again.

    The Corporate Sector didn’t get much of a boost too, even though certain incentives are scattered across the industries, its implementation and enforcement are something to be seen. By past records, that was dismal and mediocre, difficult to apply (loans and incentives) in an unwieldy process, unless you are the cronies.

    For the industries and corporate organizations, their current pains are essentially severe lack of buyers/demands rather than capacity to produce. Weak global economy has slowed down demands, by a good 20%, as exposed by Gerald Celente, a reputable economic forecaster. Exports are crimping.
    In this past year, we have witnessed plentiful shutdowns of factories, scale-down of their operations, relocating to amother country, with the unfortunate consequence of worker retrenchments. Where I live in Seksyen 27, Shah Alam, factory workers are terminated by the thousands. It is really troubling, like the proverbial race to the bottom.

    What about increasing number of unemployed graduates, not to mention their employability. None of this was given due attention in the Budget.

    And did we hear any instructive guides to resolve the huge property market overhangs, estimated at RM40 billion, Nope, nothing really.

    Ergo, it certainly resembles a budget for GE14, as the ‘sprinkles’ are meant to appease the populace and win their votes. To what extent that will succeed, my bet is a BIG FAT NO.

    Let’s be straight, the real news is, people in the streets are fed-up and sick with the scandal-tainted government and its leaders, wastages galore, and theft by them are an open secret. Confidence and Trust in them is way down in the toilet.

    Now, let’s dwell on the Deficit Budget and the Public Sector Debt Level (Government).

    The RM40 billion budget deficit means the government is spending money it does not have, or spending beyond its means. This perturbs me. Of course the shortfall (deficit) will be covered via borrowings which will only raise the Public Sector debt level. And the attendant increase in debt cost i.e. interest cost to service.

    Why this subject is omitted by the talk-show hosts really bothers me, it really does, because no prudent financial management will want to end up with deficit cash-flow year after year. Any organization that is known to increase their gearing level i.e. borrowings, and with no clear capacity to repay, will eventually be shunned by investors. And worse, in a worsening economy, increasing debt will almost always relate to shrinking bottom-line (profits).
    This has got to receive serious and due attention.

    The current Public Sector Debt level as reported stands at close to RM 600 billion or a tad shy of 55% from GDP. But let’s not be beguiled by that supposedly controllable level. If every government related contingency loans and guarantees (GLCs, 1MDB etc.) are taken into account, the total Public Sector Debt would soar close to RM 900 billion, and that is a good 82% on GDP.

    Further, the silence on the hugely scandalous and problematic 1MDB is deafening. Not at all surprising, right! The government has much to hide this from the public prying eyes.

    By international measure, the public sector debt level is a cause for concern. Anything exceeding 80% of GDP, by IMF dictate, that debt level would have a regressing effect on the economy due to its higher debt cost and strenuous repayment requirement.

    The attitude of the government is that the GDP is always on the rise, and therefore the percentage threshold on the higher GDP will allow the government to borrow more. But that is a fallacious thinking, it truly is. It is like fooling yourself into thinking that your credit card limit has gone higher, and so you can borrow more.
    Because the debt would reach a massive level later, that will have a debilitating effect when the cyclical economic downturn sets in (every 7-8 years).

    Now, let’s look at the Private Sector Debt, which comprises both the Corporate and Household debt. IMF 2016 statistics revealed Malaysia at 137% of GDP, or close to RM 1,500 billion. That is a huge burden on the economy. Given the existing sluggish market, such huge debt is a damper to the potential growth to the private sector economy, and to the overall national performance. As it reaches 150% on GDP, IMF states that the economy will be prone to any recessionary pressures and would easily succumb to it i.e. economic collapse.
    Remember Greece, Italy, Spain and Ireland. China, Singapore, Japan and USA are not far behind. Malaysia too is in that ranks.

    Budget 2018 from where I sit lacks the instructive punch to weather the current domestic and global economic headwinds. And no mention on the debt management other than the fact that the fiscal deficit drops (forecast). This is misleading in a way, because any fiscal deficit, drops or otherwise, will still end up with increased borrowings. It is a given.

    It does look like a GE budget, surely, but a tame one. The impact is insignificant, if any.
    Worse, confidence on the overall governance is at gutter level.
    Fraud, Money-Laundering, Corruption, Wastages, Leakages, Unresolved high-level crimes remain to be the Elephant-in-the-room.

    Until these are truthfully resolved, Malaysia is mired in the third world reputation, pariah.

    October 28, 2017
    Shah Alam.

    • My problem with the budget that there is no suggestion on how to ensure that the full allocated funds reach their objective. Auditor General’s findings and MACC’s investigations show that substantial portions of the funds may be ‘pirated’ and pocketed along the way by those entrusted with their management, for their own benefit and of those related to them via nepotism and cronyism. It is common perception that most of the BRIM/Books/Other subsidies are also enjoyed by those not entitled or deserving and this has been highlighted in the media.
      Culture of REWARDING delinquent borrowers- traffic offenders-ratepayers-rent payers and others continues.
      Savers are penalized by low interest rates and borrowers are rewarded with low cost finance as are credit card spenders.
      Universities continue to produce tens of thousands of graduates whose skills have little market demand and value and then more funds are ‘wasted’ on them to return them to be able to be employable but again this has may have little positive effect.

      When will current highly literate Malaysians learn to be able to manage their own funds and save for their own future as their parents did though they had little if any literacy. TO-DAY’S GEN MAY NOT BE EDUCATED AS WERE THEIR PARENTS.

      More money does not make a person high income as Indonesians monthly earnings are in millions of I.Rupiahs but many do not have high income life style. Malaysians may have high income but the value is lost and of little benefit when the purchasing power continues to is on downtrend.

      Some in High Income get Perks which may not be fully valued for Income tax purposes as are GAINS FROM ESOS which are classified as Capital Gains and thus again tax exemp. Tax Laws more to benefit the rich and upper class.

      Where does one stop?

  5. /// dinobeano October 29, 2017 at 11:38 am
    Our Budget today is a tool of UMNO-BN politics. ///

    Yes. MO1’s Budget MO (modus operandi, not Malaysian Official) goes like this – I poke you, you Budge, then you Get some goodies. BudGeT – gua tolong lu, lu tolong gua. You don’t budge, you don’t get. Get it?

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