From The Star: What Concerns Malaysians Most by - Wong Chun Wai / Rebuttal

THE biggest concern among Malaysians, as we head towards the general election, is the cost of living. It’s as simple as that.

There have been plenty of political and religious side shows, but for many Malaysians, regardless of race, settling the many bills each month is what worries them the most.

Although Malaysia remains one of the cheapest countries to live in, its citizens have been spoilt for too long.

We are so used to having so many food items subsidised, including sugar, at one time, to the point that some of us have had difficulties adjusting ourselves.

Our neighbours still come to Malaysia to buy petrol, because ours is still cheaper than theirs.

But, as in any elections, politicians will always promise the heavens to get our votes. One of the promises, we have already heard, is the abolishment of the Goods and Services Tax.

No doubt that doing away with GST would appeal to voters, but seriously, even the opposition politicians calling for this are aware that it is a counter-productive move.

In the words of Tan Sri Mohd Sheriff Mohd Kassim, a highly-respected retired government servant, “it is too much of a fairy tale.”

The danger, of course, is that populist electoral pledges are always appealing, even if they are not rational.

Malaysia cannot depend on just about two million tax payers to foot the bill in a country of over 30 million people. It is unfair and unsustainable.

Taxing consumption gives more stability to revenue because income tax is regarded as highly volatile, as it depends very much on the ups and downs of businesses, according to Mohd Sheriff. When the market is soft, revenue collection always sees a dip.

For the government, which has already been criticised for having such a huge civil service, without GST, it could even mean its workers may not get paid when there is a downturn in the economy.

In the case of Malaysia, we have lost a substantial amount of revenue following the drop in oil price.

So, when politicians make promises, claiming plugging leakages is sufficient to end GST, it is really far-fetched and irresponsible.

The Malaysian tax system needs to continue to be more consumption-oriented to make it recession-proof, and, more importantly, the tax net just has to be widened. The bottom line is that, it is grossly unfair for two million people to shoulder the burden.

The government has done the right thing by widening the tax base and narrowing the fiscal deficit. The move to implement GST, introduced in 2014, has been proven right.

GST is needed to provide a strong substitute as a tax consumption capable of off-setting revenue loss from personal and corporate tax.

Beginning next month, India will join nearly 160 countries, including Malaysia, in introducing GST. Like Malaysia, when GST was first introduced, plenty of loud grumblings and doubts have rolled out.

Unlike Malaysia’s flat 6% across the board, India is introducing a more complicated four-tier GST tax structure of 5%, 12%, 18% and 28%, with lower rates for essential items and highest for luxury and demerits goods that would also attract additional cess.

In Singapore, GST was introduced on April 1, 1994, at 3%. The rate was increased to 4% in 2003, then 5% in 2004. It was raised to 7% on July 1, 2007.

Some politicians came under fire recently for purportedly calling for the abolishment of GST, however, some others clarified that they had merely called for a reduction in the tax’s percentage.

Another top opposition politician has come out as the strongest opponent of GST, reportedly saying the claim that Malaysia needs GST is false.

Some other politicians have described GST as regressive, but have not come out with clear ideas on how it should be tackled.

Nonetheless, the ruling party should not make light of these electoral promises.

For many in the urban middle class, they feel the squeeze the most.

They have struggled against the rising cost of living, paying house and car loans, and earning deep levels of debt, as one report aptly put.

The middle class, consisting of over 40% of Malaysians, is also in the income tax bracket, it must be noted.

Last year, an economist was quoted saying that 2016 was a year of a shrinking urban middle class and a happy upper class.

Shankar Chelliah, an associate professor at Universiti Sains Malaysia, said that the Malaysian middle class shrank in metropolitan centres across the country, and that most of its members would end the year almost 40% poorer than they were in 2015.

He said this would be due to the withdrawal of cooking oil and sugar subsidies, depreciation of the ringgit, decrease in foreign inflows and increase in outflows, among other factors.

For many in this middle class range who do not qualify for BR1M handouts, the government clearly has to come up with a range of programmes which can relieve them of these burdens.

It isn’t race or religious issues that will appeal to voters – they want to know how they can lead better lives, and if the opposition thinks contentious issues will translate into votes, they will be in for a surprise.

It is true that the heartland will continue to deliver the crucial votes, and the ruling party will benefit from this, but Malaysia has also become more urban and more connected.

At the end of the day, it is the bread and butter issues that matter most. Let’s hear some solid ideas and programmes which will reduce the burden of Malaysians.

Read more at http://www.thestar.com.my/opinion/columnists/on-the-beat/2017/06/04/what-concerns-malaysians-most-at-the-end-of-the-day-it-is-the-bread-and-butter-issues-that-matter-to/#LL4YYuxbo0lEulO2.99

My Thoughts :-


I agree on some points in this article in the sense that it truly is the bread and butter issues i.e-cost of living that weighs the most heavily on every Malaysians mind as opposed to race and religion issues. However I totally disagree on the rest of his article for the broad strokes he labelled the situation we find ourselves in.

1-Although Malaysia remains one of the cheapest countries to live in, its citizens have been spoilt for too long.

We are so used to having so many food items subsidised, including sugar, at one time, to the point that some of us have had difficulties adjusting ourselves.

Our neighbours still come to Malaysia to buy petrol, because ours is still cheaper than theirs.

- This is an insult to our intelligence! Period! Malaysian being spoilt by subsidies?? Really? Malaysia is one of the cheapest countries to live in? Sure...I guess when you compare us to Singapore or London or Australia or the other developed countries we are indeed 'cheaper' to live in. 

But ask any Malaysians and I'm sure you'll find a different answer. No mention of comparable living wages, no mention of salary stagnation, no mention of Ringgit depreciation, no mention of real inflation figures?? Property prices are a prime example of the disproportionate income level and property prices prevalent today! The system is rigged for speculators and not genuine home buyers to actually own a property.

And as for the subsidies...well taking it away is one thing but introducing the GST at the same time is just stupid!! And he has the gall to say that we are spoilt?? Who the hell does he think he is?? Kiss up to BN all you want but for a so called Editor this is simply irresponsible and a shame!!

And does he even realize that sugar, cooking oil, gas, electricity, water is all given out to concessionaires instead of allowing for a totally free market to determine prices?? A monopoly of all these items is not mentioned!! So please.....have some journalistic integrity!

2-GST-No doubt that doing away with GST would appeal to voters, but seriously, even the opposition politicians calling for this are aware that it is a counter-productive move.

In the words of Tan Sri Mohd Sheriff Mohd Kassim, a highly-respected retired government servant, “it is too much of a fairy tale.”

Malaysia cannot depend on just about two million tax payers to foot the bill in a country of over 30 million people. It is unfair and unsustainable.

- Here is another glaring example of this guys effort to spin! Abolishing GST is seen by him to be irresponsible, a fairy tale, unfair and unsustainable. Wow!! Where are the figures? Why not show the figures? And the distribution? What happened to the GST collected is conveniently left out in his column. And where does it says that the government rely solely on 2 million taxpayers for it's income?? I suppose he's forgotten about the Road Tax, Stamp Duties, Excise Duties, Import Duties, Tariffs, Driving License Fees, Toll collection etc??? Just to name a few..

And of course no mention of corruption and over inflated government purchases as highlighted by the Auditors General's report which we all know is never without exorbitant mark ups and imaginative accounting. So it's not as black and white as he seems to argue is it? 

3-Beginning next month, India will join nearly 160 countries, including Malaysia, in introducing GST. Like Malaysia, when GST was first introduced, plenty of loud grumblings and doubts have rolled out.

Unlike Malaysia’s flat 6% across the board, India is introducing a more complicated four-tier GST tax structure of 5%, 12%, 18% and 28%, with lower rates for essential items and highest for luxury and demerits goods that would also attract additional cess.

In Singapore, GST was introduced on April 1, 1994, at 3%. The rate was increased to 4% in 2003, then 5% in 2004. It was raised to 7% on July 1, 2007.

-  So 160 countries have signed on for GST so hey! it must be a good thing then? No mention again of accountability, transparency, I mean to argue our 6% is lower then most is just plain lazy! Anyone can say that! By not looking at the whole picture of course 6% is lower! LOOK AT THE WHOLE PICTURE!!!!!! I mean come on..... Again...income gaps, disparities, productivity levels, living wages all omitted just so he's able to say our GST rate is lower. Hahahaha!!!!...

4-Taxing consumption gives more stability to revenue because income tax is regarded as highly volatile, as it depends very much on the ups and downs of businesses, according to Mohd Sheriff. When the market is soft, revenue collection always sees a dip.

For the government, which has already been criticised for having such a huge civil service, without GST, it could even mean its workers may not get paid when there is a downturn in the economy.

In the case of Malaysia, we have lost a substantial amount of revenue following the drop in oil price.

- Taxing consumption because income tax is volatile is good according to this article. First of all I think that's a good point BUT again this is an over simplification of the issues. Is GST the only way and why can't it be done better without unnecessarily adding to the burden of the lower income people in our society? I don't buy that we cannot have the proper safety nets before implementing this on all of us without due consideration given to the less fortunate of us. What measures were put in place or even considered before this move? None that we know of. No consideration, no consultation, no explanation except the government needs the revenue. 

And the answer is right there!! The bloated civil service!! Take the PM's Department expenditure which keeps increasing every year!! Why do we need that huge number in the civil service? From my experience most of the departments are neither civil nor provides good service! 

Drop in oil prices? Petronas is run by highly competent and capable professionals so they know their stuff! It's the Government that keeps squandering the money!! So to put the blame on that is ridiculous. Is oil our only revenue source all this while? Of course not!! It's how income is managed and distributed and invested !!!

5- At the end of the day, it is the bread and butter issues that matter most. Let’s hear some solid ideas and programmes which will reduce the burden of Malaysians.

- Here's some ideas since he's too lazy to try to incorporate them into his column :-

a) Stop all the corruption !!! 
b) Follow the rule of law !!! Without favors nor any quarters given to those guilty !!
c) Automate and allow companies to bring in automation equipment easily and at minimum cost.
d) Use English as the medium in our education systems! And fix the system while you're at it!
e) Stop the leakage and wastage and bring the full brunt of the law to all who breaks the rules!
f) Focus on the digital economy....move up the value chain! A lot has been said and countless agencies and labs or whatever the thing is called but no action has been taken. It's all mere lip service.
g) Hire exceptional and capable Executives to run all the GLC's regardless of origin or race. This is the new world!!
h) Divest and sell off none core Government assets. The Government has no place in business!
i) Abolish cabbotage and monopolies! Allow the free market to flourish (with oversight certainly).
j) Make all Government tenders and procurement transparent and simplify the process.
k) Identify, encourage and assist new entrepreneurs with new ideas and visions to be able to grow their business quickly with as few restrictions as possible.
l) Narrow down the digital divide between rural and urban population with High Speed Broadband for all regardless of geographical locations with affordable pricing.
m) Reduce the number of civil servants gradually and also the number of overlapping Government Departments. SPAD/JPJ comes to mind.
n) Open our borders and allow for foreign talents (highly vetted) to enter and establish their companies or businesses with tax rebates and other incentives.
o) Close down Pemandu and other non essential agencies that drains the coffers for little or no returns.

That's just a start. But most importantly we must admit that it's time for a change in Government! Without that then it's all just a pipe dream and things are going to get a lot worse!!

Mr. Wai....you used to be a straight shooter before these days being neutered by the confines of your comfortable positions and all the entrapment that it brings. You Sir! have relinquished your right to speak on our behalf if all you can manage for a column is a bunch of dribble with very few sprinkling of compassion for us common folks!

What happened to you Sir? I used to admire your columns....I really did! It's sad to watch you fall from the mountain of integrity to a heap of mediocrity really.