The moment the shadow cabinet is revealed, the government-owned media will spin till kingdom come to scare the heck out of rural voters. Hence, as expected, when the opposition presents their superior Shadow Budget, it wasn’t mentioned and compared in a fair manner by the media.
Whatever good idea proposed by the opposition will be rubbished as another way that could bankrupt the country – a lazy way by Najib regime’s propaganda machines in answering opposition propositions. By the same token, the prime minister should not whine when the alternate internet media criticises his recent budget which consists of nothing but Election Budget designed to buy votes out of taxpayers’ own money.
Considering BN government has successfully increased the nation’s federal total debt from less than RM200 billion in 2003 to an estimated RM502 billion in 2012, this is perhaps one of Mahathir’s greatest achievements – producing incompetent leaders who excel only in worshipping the dictator.
Naturally, when Abdullah Badawi took over from Mahathir, the country was in auto-pilot mode while his administration spent as if they’re printing $US dollar notes. By the time Badawi booted from the office, the federal debt skyrocket to slightly more than RM300 billion in 2008. Well, if you think a sleepy prime minister was bad, wait till you hear what a transformation prime minister did in a short 4-year.
Najib Razak, whose favourite movie is none other than Michael Bay’s Transformers has leapfrog the nation to a new level – increases the debt to RM502 billion this year, the highest in history and reaching 54% of GDP. In short Najib doubled the debt in 4-year what Badawi managed to do in 8-year, an impressive milestone indeed (*grin*).
That’s just 1% (percentage) point before hitting the legislated debt ceiling of 55%. If this is not moving the country towards bankruptcy, I do not know what else is. While we’re waiting to see if the PM Najib will pooh-pooh the national debt as just paper debt, made famous by Mahathir while he was in office about paper loss due to forex gambling, let’s look at all the goodies and sweeteners before the coming general election:
Bantuan Rakyat 1Malaysia (BR1M 2.0)
As expected PM Najib Razak put on Santa Claus costume again, dishing RM500 assistance money for a household earning less than RM3,000 – the second cash given since its first last year. The qualification criteria remains the same per previous time, so if you managed to pocket it last year you don’t have to queue or camp overnight as your particulars are already in the system. But if you’re new then you may register starting Nov 2012 (some say this month). The RM250 will be paid effective Jan 2013.
In addition, BR1M is extended for single unmarried individuals aged 21 and above with monthly income not more than RM2,000 but will only get RM250. It is estimated about RM3 billion is needed for this second round (first round already costs the taxpayers RM2.2 billion) of populist move, benefiting 4.3 million households and 2.7 million unmarried individuals.
RM200 Rebate for 3G Smartphone Purchase
Good news for young chaps – if you’re aged 21 to 30 years with monthly income of RM3,000 or below, you’re entitled to RM200 one-off rebate for purchase of one unit 3G smartphone (iPhone, Samsung, Blackberry, Nokia or HTC) from authorised dealers. The government is expected to spend about RM300 million on this incentive, a very small price to pay in its attempt to fish for ignorant young voters. However, the government has to precisely define the so-called “authorized dealers” otherwise every Tom, Dick and Rosmah can claim they’re the selected agents.
And how does the government ensure these youngsters can control their monthly spending on phone bills, now that they can connect to internet 24 hours per day? Obviously telecommunication companies such as Maxis, Celcom, DIGI and U-Mobile are grinning from ear to ear.
Real Property Gain Tax (RPGT)
RPGT will be increased to 15% (from current 10%) for disposal of property within 2 years, 10% (from current 5%) for disposal within 2 to 5 years. After 5 years, it is not subject to RPGT. This is perhaps one of the propositions that attract the biggest yawn in this budget, so much so that you may be wondering if the person who proposed this was sleeping on the job.
Obviously speculators are still laughing their arse off at the budget since they’re already waiting for 2 to 3 years for their properties to be completed so that they can sell it. So how can this curb property speculation?
Personal Tax and Tax Relief
Individual income tax rate was proposed to be reduced by 1% (percentage) point for the first RM50,000 of chargeable income. This means if you earn RM50,000 or more annually, you would get to enjoy maximum tax saving of RM475. With this proposal, it also means 170,000 taxpayers do not have to pay income tax, with only about 1.7 million people pay tax from an estimated workforce of 12 million.
Child tax relief to be increased from RM4,000 to RM6,000 per child for children aged 18 and above and receiving full-time tertiary education, effective from year of assessment 2013. Tax relief of RM3,000 for savings in the National Education Savings Scheme (SSPN) will be increased to RM6,000.
1.5 Month Bonus for Public Servants
Since this is an Election Budget, PM Najib was expected to lick 1.4 million public servants’ boots. Already known as the most generous Santa Claus prime minister ever, never mind that national debts is reaching a critical stage, bonus of one and a half month for public servants for year 2012 was proposed. Already, half month of bonus was paid during 2012 Hari Raya, hence the remaining one month will be paid in end Dec 2012 (50%) and in Jan 2013 (50%). This strengthened the speculation that PM Najib will only call for the next general election next year.
PTPTN Loan Discount
PTPTN has been a very sensitive and tricky issue ever since the opposition proposed free education. And since Najib administration is struggling to make ends meet, the prime minister is using the same tactic in traffic summon payments collection from traffic offenders. Thus those who are willing to pay full loan from 1st October 2012 until 30th September 2013, a discount of 20% will be given on their loan.
For obedient borrowers whose repayment of PTPTN loan is in accordance to their repayment schedule, a 10% discount per annum on their repayment will be given effective from 1st Oct 2012.
My First Home Scheme and 50% Stamp Duty Exemption
My First Home Scheme income limit for individual loans to be raised from RM3,000 to RM5,000 per month, or in the case of joint loans of husband and wife of up to RM10,000 per month. 50% stamp duty exemption on sale and purchase agreements and loan agreements for purchase of the first residential property of up to RM400,000 (increased from RM350,000), be extended to 31 Dec 2014.
Other goodies
- Book voucher of RM250 for students.
- No increase in taxes for alcohol and tobacco.
- Malaysians with a monthly income of RM3,000 and below and who travel by KTM Komuter, will get 50% fare discount. Currently, only the disabled, retirees and students enjoy a 50% fare discount. This is really cool but I supposed people will start flashing their salary-slip every time they purchase their tickets at the station (*grin*).
- RM1,000 one-off payments for army veteran, RM200 per month for serving personnel and allowance increment for reserves corp. and Territorial Army to RM7.80 / hour. Actually PM Najib doesn’t really have to spend so much on this sector since the army are constantly brainwashed and forced to vote for the current regime, even if you announce a pay-cut. That’s how obedient they are.
- Passport fees for senior citizens and children aged 12 and below be reduced by 50% from RM300 to RM150 (5 years passport) and RM100 to RM80 (2 years passport), effectively from January 2013.
- Reduce sugar subsidy by 20 sen per kg from 29 Sept 2012. This means the cost of sugar is now RM2.50 and RM2.60 per kilogram for Peninsula and East Malaysia respectively. Consider this goodies if you’re a potential diabetes patient otherwise it’s another excuse to enhance fortunes of the new Sugar King, Syed Mokhtar Al-Bukhary, a crony of former PM Mahathir.
You may not realize this but the indirect impact is equally serious, considering sugar is ingredient required in other food items such as bread, ice-cream, cereal, biscuits or cookies, juice, home-cook dishes and whatnot. Expect dearer Starbucks coffee and carbonated drinks.
The above goodies are indeed attractive and if this is not an Election Budget to buy votes, then PM Najib Razak is still a virgin. Since this is the last budget before the next general election, the prime minister put all his chips on the poker table hoping to win another term. Considering most Malaysians would kill each other just to get hold of a free Tupperware, the above short-term candies should return two-third majority to the current BN (Barisan Nasional) regime hands down. Thereafter, the government would go for the killing and the people would pay many times what they’re getting now.
But if there’s press freedom in this country, a published comparison between present government’s budget and opposition’s budget 2013 would put Najib administration in great danger. As a starting point, Najib’s 2013 budget continues to register another year of deficit, the 16th in a row since 1998. Now do you understand why we mentioned that this country’s economy has never return to its former glory after the 1997-1998 Asia Economic Crisis? While Najib presented a 4% deficit budget, opposition proposed a superior 3.5% deficit budget. You should take Najib’s 4% deficit figure with a pinch of salt though.
Based on past records the current regime was notorious for its overspending habit. Last year alone, it overspent a whopping RM19.6 billion so you can sell your mother, wife and children and bet that the same government will do the same stunt again. The fact that the overall subsidy was set to drop 11.3% to RM37.6 billion in 2013 compares to RM42.3 billion in 2012 and yet the best beauty pageant they can put on stage is a 4% deficit, Najib’s team has been working really hard in trimming temporary fats every corner just to impress its audience, at least before the next general election early next year. Heck, Najib even cut its education budget by a whopping RM12 billion as compared to last year.
How the opposition can easily delivers 3.5% deficit with one eye closed whereas PM Najib struggles with only 4% deficit? Easy – the opposition took away figures from corruption, cartels’ cronyism, monopolies and whatnot from the budget figures. The present government is also tasting its own deficiency as a result of absorbing unemployable graduates into the public service – a mind-boggling RM202 billion for Operating Expenditure against RM49.7 billion only for Development Expenditure, an unhealthy 4 to 1 ratio.
This means federal government’s estimated revenue in 2013 amounting to RM208.6 billion is just nice to pay for the RM202 billion operating cost only, not bad for a country with an estimated debt of RM502 billion by next year.
In the education sector, opposition proposes abolishment to the National Higher Education Fund (PTPTN). While you can argue till the cows come home about the feasibility in wiping out PTPTN debts, the opposition has justified that it can be done although it’s not popular with ex-students who obediently paid their loans. Another interesting area that raises many eyebrows was the allocation of a whopping RM1.2 billion for pre-school education. The joke on the street – Najib’s biggest crony is none other than his “beautiful and intelligent” wife (*tongue-in-cheek*).
Permata Negara programme which is synonym with pre-school programme, a pet project of PM Najib’s wife, Rosmah Mansor, was allocated RM100 million and RM111 million in 2010 and 2011 Budget respectively. Now that officially pre-school education is allocated RM1.2 billion, the past speculations that Permata had sucked up taxpayers money to the tune of RM2 billion prior actually carries weight.
The worst part was the fact that nobody knows how the money was being used. Does PM Najib’s wife project require such huge taxpayers’ money considering most of the pre-schools are fees-based and privately-owned?
While escalating housing prices remains one of the biggest issue of which neither Najib administration nor opposition can solve with their budgets, the opposition’s proposition to build 100,000 affordable homes with price range between RM130,000 to RM300,000 to be built by newly formed National Housing Board raises eyebrows.
Using Singapore’s Housing and Development Board successful model in solving its housing shortages, obviously opposition’s proposal should deserve some attention. Najib administration has been screaming about building thousands of affordable houses on every budget but the problem still persists. Perhaps the prime minister was not ready to take over the burden and prefers to let the private developers and speculators do as they wish.
The main battle - personal income – or how to put more money into peoples’ pocket has taken a new twist when BN cut income tax rates for taxable income up to RM50,000. Whether this is an acknowledgement of the present government about escalating cost of living or simply a first step towards introducing GST after general election next year is yet to be seen. Seriously, there’s not much Najib can do to increase peoples take home money except with one-off couple-of-hundreds thrown in to the cage. Obviously, opposition trumpeted again their proposed cheaper cars via excise duty reductions, toll abolishment, waiver of PTPTN, lower fuel and whatnot – all contributes to thousands of savings in the long run.
Overall, Najib’s proposition was slightly better than previous year’s budget but can’t compete with opposition’s budget. Of course, the prime minister made fun of opposition’s budget as populist but not worth what it was printed on. Really? If the prime minister was so dead serious about his superiority, he should gleefully accept opposition Anwar Ibrahim’s invitation for a “Budget Debate” to be live telecasted so that the rural and urban voters can see for themselves the opposition’s ridiculous and stupid budget. For all you know, the people may be so impressed and touched with Najib that they may decide to donate all the cash received to Najib’s administration, out of gratification.
PM Najib was so obssessed with being popular that he even copied what former US President Ronald Reagan said during Presidential debate in Oct. 28, 1980. On that day Reagan said “Ask yourself – Are you better off now than you were four years ago? Is it easier for you to go and buy things in the stores than it was four years ago? Is there more or less unemployment in the country than there was four years ago? Is America as respected throughout the world as it was?”
