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Friday, 10 October 2014

Petrol Subsidy excuses the government from finding real measures and policies to help the poor.



In the previous article, I included a proposal sent to me about introducing a petrol and diesel tax. Clearly, the proposal was meant to be a general framework only.
As the discussions show, there are misgivings as well as support for the proposal.

A few commentators missed the point that the proposal is linked closely to a desired redistributive effect- viz, the better off should be taxed more than the less off. That is the redistributive effect.

On the technicalities of modern cars- the list can always be made to include identifiable cars and exclude identifiable vehicles. What’s so difficult about that? The idea is to tax more those who can afford more expensive cars. If a 1.4 VW is more expensive than a 1.6 proton or a Japanese make, the VW ought to be excluded. The details can be worked out by experts.  There is always exception to the general rule. Don’t go berserk.

Now, if it were up to me, I would remove subsidies altogether therefore saving the government RM 21 billion a year preventing them from cock-a-doodle-doo each year about helping the poorer people. Why should a responsible government backbite and begrudge about helping its poor citizens?

This would then remove the petrol and diesel factor being a perennial excuse by the government to hide its failure in carrying out measures than can actually help the poor. 
For as long as subsidy on petrol is around, the government can excuse themselves from introducing real measures to help the poor. Otherwise, they will always say, we have given subsidies, so we don’t to have to think and introduce other substantive and more powerful measures to reduce poverty for example. 

Now, if subsidy on petrol is removed, the decision to do so must be accompanied by several measures such as:

·        Make the price of cars cheaper so that, the lower price of cars, can balance the higher price of petrol and diesel.

·        Make public transport more efficient not more expensive.

·        Reduce the cost of insurance on cars.

·        Allow fuel efficient cars to be imported freely.

·        Introduce a flat rate on road tax irrespective of the engine capacity.

·  

·        Let oil companies compete for our money by opening up pump prices.

15 comments:

ordinary malaysian,  10 October 2014 at 08:55  

The problem, Dato, is that doing away with subsidies does not guarantee that a government that has been remiss will wisely utilise the money saved. That 'windfall' could well become the private funds of the well positioned. At the end of the day, the rakyat will be the ones royally screwed, twice.

It would be better that when the international price of oil rises, the price of PnD be reduced. Why rise it when oil price rises since we are a net oil exporting nation. And when oil price drops, the price of PnD also rises. This is hard for anyone to grasp. The government needs to explain whether we are engaged in imprudent oil futures, selling oil at low prices for long hauls.

More importantly, since irrespective whether you are rich or poor, everyone needs transport to get to work, for good or bad, the subsidies should remain while the government works to reduce, if not entirely cut down on, leakages and the crippling and mountainous costs of corrupt practices and crony capitalism.

Of course, the last might be expecting too much of a government long used to patronage and preppy propositions.

But doing away altogether with subsidies with the status quo unchanged, and possibly unchangeable, given the way things have been entrenched in the dUMNo led administration, the rakyat will be the ones squeezed and squashed while the savings from subsidy withdrawal may just as well be squirreled away into private vaults under various schemes purporting to benefit the nation.

We need to only remind ourselves of Cayman Island and IMDB, THOUGH OF COURSE WE WAIT TO BE PROVEN WRONG.

We need to change the government before we can change anything.

Anonymous,  10 October 2014 at 12:11  

The problem is He is The Prime Minister and He is The Finance Minister with minitress? The same hand write reciept after money and the hand write the bills.

Anonymous,  10 October 2014 at 13:36  

Dato,
usually where there's a will, there's a way, but do you think there's any way out for the general rakyat?

Anonymous,  10 October 2014 at 20:33  

Subsidy for fuel will stay, for the simple reason that some people will make a lot of money from the new fuel subsidy system. PM did give a hint during budget session on its implementation soon

Suci Dalam Debu 10 October 2014 at 21:25  

Sir,

Agree 100% about your General framework with fine tuning needed.

Sadly, a BN government cannot fathom such simple concepts.

Anonymous,  10 October 2014 at 22:54  

To me what you have listed in the last para is a vision where the present ruling elites should ponder and might as well augurs these suggestions, thanks Dato for your very divisive explainations...l hope Pekan AP may ponders.

Anonymous,  11 October 2014 at 19:14  

Don't be fooled by the 1PM's budget :


http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=375982:budget-2015-a-sham-najibs-3-deficit-a-pretend-target-with-govt-racking-up-huge-loans-expenditure-off-balance-sheet&Itemid=2#axzz3FpiO5rns

And there is the "supplementary budget" before the end of the fiscal year.

Phua Kai Lit

bruno 11 October 2014 at 21:18  

Dato,world crude oil prices have fallen through the floor.The WTI has fallen from around 100 Usd to 85 Usd.A handful of years back it was around Usd 150.Maybe the increase in local gas prices is because Petronas,the sugar daddy of federal gomen is unable to contribute more as world crude prices are falling.

Because of the high prices of crude oil,gas prices have shot through the roof.High gas prices and high unemployment have caused Americans to have less objections to fracking.And because of fracking,America will soon become an exporter of crude or processed oil instead of being a major importer.

Now from gas prices,let us shift back to Selangor.Oktoberfest,the beer drinking festival of thirsty horses have been in existence before the PR came into power in Selangor.Why the 7/11,bible issues and now this Oktoberfest are becoming hot potatoes for the Selangor PR state gomen.Because it has made the state gomen seem powerless when it comes down to these issues concerning the Muslims.And Azmin is starting to be another Khalid,powerless and trying to pass the buck to whoever he can push it to.

But these things were never an issue when Umno was in power.Now PR has no Khalid to blame.And what if the bibles and highway issues or scandals as PR has called it cannot be solve and is back to business as usual.Then the shit is going to hit the fan and fly straight back to their faces.

The PR is digging themselves deeper and deeper into deep shit.They kept jumping from the frying pan into the fire and into the hot boiling oil.

The PR has shown that it lacks real leadership,good strategists and field generals.They acted first,coming out wielding parangs and fangs longer than the fish called jaws.Without a f*cking clue about the after effects or consequences.

They have no f*cking clues that a very weak Umno/BN will no longer be as weak as in GE13,come GE 14.Anyone in the PR leadership who thinks that the MCA will do worse in GE 14,better go shiok sendiri themselves.MIC will also be no more a pushover,not to say so much about Umno with their stashed away containers of ringgit 100 bills.

The way the PR is going,unless there is a major change in the top leadership,PR supporters better brace themselves for the worse.Three more years to the GE 14 is just a very short time.NATO,and the PR will be reeling the night of GE14.

Anonymous,  12 October 2014 at 08:03  

Dato,
as Ampang MP Zuraida Kamaruddin rightly highlighted the government is fooling the people with its proposed exemption of the goods and services tax on RON95 petrol, as the 20 sen hike recently is much higher than if GST is imposed on it.

“If you do the calculation on the old price with the GST, it will be lower than the 20 sen hike. This, I consider is bad trick the government is playing to burden the people further,” Zuraida said in a statement.

World oil prices have dropped and many countries are already reducing their petrol prices.

However with Malaysia's petrol increase, would like to know is the rakyat now subsidising the govt instead of the other way around?
This is an interesting development.

Anonymous,  12 October 2014 at 08:12  

Bruno 21.18
picking holes with PKR, criticising their weaknesses is not the solution, neither is just leadership change. Would like to know your constructive proposals with the Oktoberfest, bible,and other issues. Why dont you help? All hands to the oars to steer to GE14.

bruno 13 October 2014 at 10:35  

Anon 21:18

The only way to help the PR is to tell the present leadership that they cannot have it both ways and should not take for granted that opposition supporters are sworn blind followers.It is time to show these losers the middle finger.

How come all these things they are screaming is wrong when Umno is doing,but when the PR politicians do it,it is always right.

When the tide was turning towards the PR's side,PKR f%cked up from Sabah to the Peninsular.They prefer to screwed each other's asses than Umno and was never even close to winning GE13.If they cannot win the GE when Umno/BN were on their knees begging to be kick out,how can they win GE14,when the Umno/BN are no longer weak.

With Anwar and his followers still running the PR like it is a personal vendetta to whoever do not kowtow to them,you can all forget about Putrajaya.They will have first priority to get rid of their own party members that they don't like,than to go for Umno's smelly asses.

These stupid leaders should understand that the common enemy is Umno/BN.like the Chinese in China used to do.Act as a people and kick the Japanese out first.Then come back later and screw each other's asses.For the PR leadership it is doing the opposite.

If you think that the present leadership under Anwar can win Putrajaya,I think it will be much easier to win the jackpot in the lottery.

Anonymous,  13 October 2014 at 13:39  

Now from gas prices,let us shift back to Selangor.Oktoberfest,the beer drinking festival of thirsty horses have been in existence before the PR came into power in Selangor.Why the 7/11,bible issues and now this Oktoberfest are becoming hot potatoes for the Selangor PR state gomen.Because it has made the state gomen seem powerless when it comes down to these issues concerning the Muslims.And Azmin is starting to be another Khalid,powerless and trying to pass the buck to whoever he can push it to.

But these things were never an issue when Umno was in power.Now PR has no Khalid to blame.And what if the bibles and highway issues or scandals as PR has called it cannot be solve and is back to business as usual.Then the shit is going to hit the fan and fly straight back to their faces.

The PR is digging themselves deeper and deeper into deep shit.They kept jumping from the frying pan into the fire and into the hot boiling oil.

-----------------------

Another brainless comments from the above.

Really a typical BN supporter who just do the guesstimate and presume something which had not took place.Only shoot without justification like:

1) Anwar will sell the Malay.
2) LGE discreminate the Malay
3) Malay will lost everything if PR took over.
4) LKS anti Malay.

Why blame PR leader? All issues created by the BN to detroy the PR including the Palace with the support of PAS.

Know the fact before put the shit into PR's mouth.

Dont do the guessing game and tell the world PR is lack of leadership.

Only the fool will will support the barang naik G.

You need to let PR to be in Putra jaya before shooting your shit out from your mouth.


Anonymous,  13 October 2014 at 14:52  

Dato,
the new PKR sec gen Rafizi and the two co-election directors Saifuddin and Nurul, best of luck and aim to bring PKR to further successes in GE14.
Remember, talk less, zip up loose lips that got you all in stupid courtroom dramas one after another, constructively do more so that the tide can turn in your favour.

bruno 13 October 2014 at 18:12  

Anon 13:39

You are one of the brainless sworn blind followers who like and will always be led by the pipe piper,by the nose.You will always be a sworn follower,and can never be a leader.For this,you deserve the Umnoputras.At least you will have crumbs thrown to you for your loyal allegiance.

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