Sunday, September 09, 2007

Malaysia Budget, what are our priorities?

Budget discussion as in Malaysiakini TV.

Spare a nick of time to read a section of the budget. The budget allocation is 10.9% higher than last year, resulting in fiscal deficit of 3.2%. Meaning we will continue to print more money to finance this deficit. Meaning inflation continue to be used as a form of tax. Taxing the general populace to finance top down centric and directed economy.
(Rather than the market finding and improving its efficiencies, Govt officials plan and encourage certain sector to flourish by allocating incentives and funds)

As in my previous posting, I support reduction in corporate taxes and investment in human resources.
No reduction in individual income tax? Is that a big issue?
To me individual income taxes is already low. We cannot encourage a culture of 'tax someone else, but not me'. But I dont see any distribution where it should be, to the low income workers. The increase of RM100 to poor old retirees and disabled is pathetic. And the offer of Govt Bond with 5% yield is similar to silap mata. How many of the retirees have that much money in the first place. Worse, given inflation rate of the basket of goods that these retirees buy (rice, bread, fish and meat etc) running at about 5% plus, the Govt is practically stealing their money.
To the retirees, please find other forms of investment that return more than that.

I like the idea of encouraging fund management industry. But please dont put that ownership clause of 30% Bumiputera ownership. That is like saying 'please come' but open the door only an inch, letting only the most agile cat to come in but not real people. Its designed to give influential people who want to get into fund management a cheap ride. Who would that be? Wink wink.

Shall continue reading...

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