Tuesday, September 05, 2006

A Dissapointing Budget 2007

When i read the short commentary in major newspapers about the budget, I thought " Wow what a fiscally imprudent expansionary budget!"
Billions of ringgit on development, tax cut for corporate citizens and surely the good times are coming back for contractors. Do we really have that much money under the pillow to spend?
Maybe we really have.
Lets talk the plus side first;
I like the abolition of exam fees. Fees for government services is a form of user pay tax. Taxing students who cannot exercise their voice by voting is like taking sweets off babies, they cant complain.
By all means, charge fees to users of government services to people who earns money and derived benefits from these services.
I like seeing more money allocated to healthcare. That is a good investment, after all its government duty is to provide this service to its citizens.
I like that money is being allocated for better public transport. If the country is to be competitive and efficient, public transport has to be good and efficient as well. It may not make profit, but it saves on resources and wastage of man hours for people who are stuck in traffic congestion.
I like the notion that money is being allocated for agribusiness, as this will benefit the nation soon in the form of more abundant food and agriproducts and cheaper food. Perhaps reducing our food import bills and lower food inflation.
Bonus for civil servants? I dont have any problem with that, but why dont we just increase their pay, especially the lower level. The practice of giving bonus in Asian countries could amplify the boom and bust scenario in the economy. no doubt it is inflationary during good times especially at the end of the year when bonus is given. People also wait until end for year before tendering their resignation, just so that they can get their bonus.
Reduction of corporate tax would encourage more investments and reduce tax evasion. Thats is good for competitiveness sake. If its affordable, I would suggest corporate tax be reduce further to 20% to match Ireland and Hong Kong. When its that low, tax evasion in the form of under invoicing would not be worth while. Low corporate tax rate encourage sustainable economic growth.

On the negative side, I dont see any effort to help the low paid workers. MTUC even said some plantation workers get only RM325 a month. Its time to draft a law that stipulate minimum liveable wage at least RM1200 a month. Its the duty of the government to spread the wealth of the country, not just let it concentrate to the rich and powerful.
I dont see any safety net welfare payment for the poor, old and disabled. This is supposedly an Islamic Hadhari country, where wealth is supposedly abundant. But is the wealth being shared around? Are the poor being taken care of?

Its pointless having a capital that can be seen from space, a huge international airport and world tallest building if some of the poor in the society is not taken care of and sleep under the bridge.

I would say the budget is inflationary, more money is allocated into so-called development budget, which is effectively awarding contract to build this and that to Umno owned and affiliated companies. I wouldnt mind if the project is about building housing for the poor and homeless or new schools and training centres. Does anyone ever stop and ask, where the monies for these project came from?
Ah yes the usual petroleum revenues.
Spend and spend, for the oil flow is endless.

MTUC: Do more for workers

PETALING JAYA: MTUC president Syed Sharir Syed Mahmud said the tax exemptions and relief announced in the Budget on Friday might appear generous but it was insufficient to create more employment.

“If you give little tax relief to corporations, they might feel it is too little to expand their businesses.”

He said that while MTUC welcomed the emphasis on training for professionals, there were no allocations for improving labour skills.

“We talk about human capital but what about incentives for unskilled workers who want to learn new skills?” he said, adding that if nothing was done for them they might remain in the same status for the next 10 to 15 years.

While he appreciated the attention given to agriculture, Syed Sharir said nothing was mentioned of workers.

Many plantation workers were earning less than RM325 a month and the Government should introduce a sufficient wage level for these workers, he said.

There was also no safety net for workers who were affected by inflation or retrenchment, he said.

He added that the Government must come up with a comprehensive childcare programme to support workers.

MTUC deputy president Mohamad Shafie B.P. Mammal said the body had hoped that the Prime Minister would have asked or persuaded the private sector to consider giving employees a cost of living allowance.

MTUC secretary-general G. Rajasekaran said it was encouraging to hear that the Government wanted to make it easier for the unemployed to find jobs by having job kiosks placed in strategic places like LRT stations, shopping complexes and post offices.

“Retrenched workers too can go there and register themselves.”

Rajasekaran lauded the measures taken to check crime, which had become a matter of public concern. He also said the RM10bil healthcare plan, abolishment of examination fees and allocation for better public transport would benefit the people.

“I am disappointed though that the Prime Minister, in announcing the bonus for government servants, did not urge the private sector to follow the example.”

Government doctors, meanwhile, hailed the bonus decision, saying the extra cash would come in useful for impending festivities.

“Sometimes, it's perks like this that help doctors remain in government service,” said Section Concerning House Officers, Medical Officers and Specialists national chairman Dr Vasan Sreenivasan.

The Malaysian Associated Indian Chambers of Commerce and Industry also welcomed the Budget as one with some nice touches. Its president, Pardip Kumar, said it was relatively painless and would be easy to implement.

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