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Tuesday 19 October 2010

Clouds over Budget 2011

By Stanley Koh - Free Malaysia Today

COMMENT Most Malaysians do not live in Cloud Cuckoo Land, but a privileged few may find themselves working in the clouds after 2015, assuming that the RM5 billion 100-storey Warisan Merdeka can attract occupants.
The Malaysian mood was hardly euphoric after the government released details of Budget 2011 last Friday.

In fact, some four million tobacco addicts were already in a foul mood even before Budget Day, with holes burnt into their pockets. They had been ambushed a couple of days before by a 70-sen rise in the price of a packet of 20 cigarettes. The attack was so sneaky that many non-smokers thought there were no sin taxes this time around. Other vices like gambling and drinking were virtually untouched.

It does not seem to matter to the government that such a high price for such a common habit would encourage smugglers and black marketeers. In 2009, the high level of illicit trade on contraband cigarettes cost the government RM1.5 billion in evaded taxes and duties, calculated over a two-year period. This is almost equivalent to the yearly bonus paid to civil servants.

It remains to be seen whether this drastic move will discourage the expanding population of smokers. However, one thing is certain — the smoking population will try to blow away the BN government in the next election.

But the disturbing signals emerging from the budget are not just about smokes and clouds.

“Want not, waste a lot,” a Malaysian remarked cryptically in response to the budget announcement.

The sarcasm is well placed for stating what has become obvious. More and more Malaysians are becoming aware that their government has, for decades, been guilty of wastage, leakage, excess and corruption.

Many find it alarming that 76.2% (RM162.8 billion) of RM211.98 billion is for operating expenses, leaving only RM49.2 billion for development purposes.

Innovative route?

Cynics see an ironic twist in the budget. It contradicts officialdom’s acclaimed political will to transform the nation and place its fiscal direction on an innovative route.

The foundation for Vision 2020 was supposed to be have been laid years ago. Are we re-starting all over again?

Criticisms of misplaced priorities and fears arising from lack of transparency and accountability, which were once seen as opposition rhetoric and the loud talk of activists who wanted to appear intelligent, are beginning to make common sense to common folk. After all, sordid stories from the National Auditor’s Report have become annual fare for any Malaysian who reads.

Indeed, the Najib version of the Tower of Babel is not the only obscenity assaulting the sensibilities of those who wonder how it would address the real needs of the nation and the many hardships Malaysians are heir to.

Why, for instance, must the Prime Minister’s official residence require a colossal allocation of RM65 million when, not too long ago, a modest allocation to upgrade and renovate the Penang Chief Minister’s official residence was shouted down and criticised?

How much was allocated to do the same for the residence of the Menteri Besar of Kelantan, another non-BN state?

Does the budget address the hardships of the urban poor? Does it make any sense to say that a 1% increase in the service tax will reduce the cost of living?

What happened to the New Village Master Plan approved some time ago? How much is allocated to it?

Will mega projects result in a reduction in the number of foreign workers?

Apparently, the nation is beset by problems to which no one knows the answers, not even the so-called experts, economists and financial planners.

Grand corruption


Despite all these, the budget has some supporters like Ryan Cheong, 33, a software engineer. “I find this budget impressive, in fact better than last year’s,” he said.

“It has more variety — like the incentive for fresh graduates to buy houses for the first time. But there are also many neglected areas, like rising medical costs, and the concerns of retirees.

“But the exemption from paying the 10% deposit helps a lot, especially for those with a take-home pay of around RM2,000.”

But even Cheong expressed disapproval of the Warisan Merdeka, as did engineer Wong, another Malaysian interviewed by FMT.

“We can do better things with that kind of money instead of just creating an icon,” said the 53-year-old.

There are also concerns that the budget will not be closely monitored and may not achieve the objective of transformation and bring about a high-income society.

“Generally, Malaysians lack confidence in the implementation of budgetary allocations unless there is greater political will from the government to adhere to the principles of transparency and accountability,” MCA leader Yap Pian Hon said.

Fear of mismanagement of public funds keeps haunting the Malaysian public. Remember the 2006 Auditor-General’s report about a RM32 screwdriver set bought for RM224, a RM160 pen for RM1,146, and a RM50 carjack for RM5,700? Or an even more shocking RM290 million spent by the Customs Department for an outdated user-hostile information system?

Malaysians are reminded of overpriced goods and services, unauthorised payments, wasted equipment, shoddy implementation of projects and kickback money.

Real transformation can come about only through perspicuous political commitment. M Veera Pandiyan, deputy editor of New Media (mStar Online) was correct in quoting Transparency International: “Ending the pettier forms of corruption in the bureaucracy is almost impossible if grand political corruption persists.”

Stanley Koh is a former head of research at MCA.

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