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Sakmongkol ak 47

Thursday 5 September 2013

Fiscal Prudence through fuel price hikes?

The way the government explains the increase in fuel prices has all the hallmarks of arrogance. They simply explained the fuel price hike away by saying the savings made thereof  will be channeled to rural areas. And why the rural areas? Because they have been neglected after 56 years of independence. It’s as though the alleged savings made from the withdrawal of subsidies will immediately and miraculously elevate the standard of living for our rural folks. They won’t until the stealing and robbery stops.
If we want to reward rural voters, then let’s reduce spending in urban areas. Start for example by eliminating the MRT which will gobble up more than RM50 billion of our money. Discontinue some parts of the mega project and channel what’s not spent into rural areas. Discontinue the river of life project because it’s going to be enjoyed by urban dwellers.
We haven’t actually arrived at a specific price of the MRT project. It could be more than RM50billion. Or we can reduce the subsidy given to corporations. The subsidy on flour for example isn’t enjoyed by households and those who earn RM1500 per month. There are 40% of them in this country. Flour subsidy is enjoyed mostly by the bigger flour millers such as flour milling outfits owned by Robert Kuok group and Syed Mokhtar. Eliminate the flour subsidy and the government saves about RM60 million a year. Next reduce the subsidy to the IPPs who selling power to TNB and in the process bleeding TNB. Eliminate all these tax incentives given to businesses such as Lynas and the government gets more money to channel to rural voters.
What are even more discomforting are the patronizing answers given by BN leaders explaining why the subsidy on RON 95 and Diesel is taken away. RON 95 is used by more people than RON97 since it’s cheaper. It is reasonable to assume that RON95 users are owners of less expensive cars and therefore can be further assumed to be lower income earners. Paying 20 sen a litre means more money out of pocket and reduces disposable income. Having to pay more for fuel and a range of goods in the consumer basket means higher cost of living. It will certainly be harder on the pockets. A rise in diesel price will lead to an increase in the cost of goods and services by all users of diesel. Transport companies will increase their fare; Utility companies using transport to ferry their fuel of choice will also have to increase the price of their products and services.
It’s a politically incorrect way to reduce fiscal deficit. Almost always the first to be maligned will be the ordinary folks who are quickly numbed by all sort of condescending rationale to absorb the increase.
Let us wait how the rural folks will be rewarded. But let’s not forget that 75% of our population lived in urban and semi urban areas.
It’s simply a heartless trick which the government plays on us. When confronted, the government’s incompetence is always excused by saying it’s for the rural folks. For years we have suffered fiscal deficits and they were explained away as necessary to carry out welfare programs for the needy and poor. What is the percentage of our yearly budget that is actually used for this purpose? Is it significant enough to explain and justify our fiscal deficits?
Save money by cutting off mega projects that siphon much needed financial resources from the government. Stop for example the project of supplying 500,000 laptops proposed by a retired UMNO politician from Penang. Stop the RM 1.2 billion communications project demanded by one of the royal households in Malaysia. All the money the government need to pay for these projects can be used to reward rural folks can’t they?


Anonymous,  5 September 2013 at 09:30  


I do not think their motive was even pretending to be high-minded; it was merely to reward them for voting BN.

In other words,and yet again, the Malaysian tax payer has to underwrite what is tantamount to bribery of voters.

RM400 pumped into KB just to win less than 22 extra votes?

No wonder Malaysia is on the slide economically.

Anonymous,  5 September 2013 at 10:30  

Dato Sak,

Do you think that we Malaysians are so gullible to believe that the "savings" will be for rural development? The fictitious "rural development" ploy is to disguise the fact that the savings will find its way into the bank accounts of those in power through purported cost overruns excuses in the mega projects already in progress or in the pipelines.

This BN government has already sucked dry the country's coffers and now they are sucking our blood. I fear that our blood will be sucked dry even before GE14.

Anonymous,  5 September 2013 at 11:17  


Lest Malaysians continue to be naive, the price hike was never about managing fiscal policy or helping the rural.

It's about refilling the cookie jar of the corrupted politicians.

Just wait till they implement GST.

The 51% will be screaming.

The 46.5% will be crying.

The 0.5% will be laughing all the way to the bank. On their way to the bank, they will spit on the faces of the 99.5%.

Anonymous,  5 September 2013 at 11:36  

In a family during bad times, the parents are the first to cut their expeditures so as to provide the needs of their children. We expect the same from the govt as well

Anonymous,  5 September 2013 at 13:30  

After winning the GE, BN doesn't care a damn what the people want or say. They know Malaysian will NOT rise up against fuel hike like those in Indonesia or Indian or protest against their government like in the Middle east.
Actually, the BN Juggernaut will roll as it wills for another five years.
It will not care what we say.

Anonymous,  5 September 2013 at 14:12  

Saying that the savings will be channelled to the rural areas is actually a ploy to intimidate the urban voters - vote for me or else you get nothing!

bruno 5 September 2013 at 16:45  

Dato,maybe if the PKR and PAS were as well organized as the DAP and work as a party instead of as individuals,Umnoputras would have balek kampong and tanam jagong.And we wouldn't be talking,arguing or discussing about these issues.

Anonymous,  5 September 2013 at 17:46  

Dato Sak, can you disclose the wages of all Ministers, GLC's CEO, DG, KSU etc etc so that Rakyat knows how much they are getting. Please include their petrol allowances also. TQ.

OneMalaysian,  5 September 2013 at 18:19  

Dear Sakmongkol

Let’s get a proper perspective about this subsidy thing. This 20 sen increase in petrol price will save the government RM1.1 billion for the rest of 2013, and about RM3.0 billion for the whole of 2014. The estimated total subsidy – fuel (petrol, diesel and gas) and food, etc – costs about RM24.5 billion. So even if we save the whole RM3.0 billion next year we save a mere 12.2% of the total subsidy bill. Clearly more has to be done if the government wants to reduce the gapping fiscal deficit and shrink it from 4.5% of the budget to 3.0% by 2015.

Where are the rest of the cuts going to come from? Nothing is announced, except with the PM saying that some big budget projects will be postponed (not cancelled). We shouldn’t confuse capital expenditure like infrastructure construction from annual expenditure like salaries for civil servants. It is the expenditure that we need to cut drastically.

But the government is approaching these cuts on an ad hoc basis. There is no comprehensive plan. If they are serious, there are some low hanging fruits to pluck, and the lowest is to strictly enforce the open tender procedure for all government procurement. This is estimated to save some RM45 billion, a sum greater than its current fiscal deficit, and certainly bigger than all the subsidies it gives out. Doing this is however akin to committing political suicide. That’s because BN cronies feed off these closed tenders and negotiated contracts. So forget this low hanging fruit.

We can expect more ad hoc baby steps in cutting subsidies. The government will cut a bit and immediately grant relief to the poor, which in effect counteracts the cut. Consider this 20 sen price increase. That saving will be given out as BR1M version 2 (or 3?), which is expected to increase from RM500 to RM1000 (budget 2014) to 4.3 million households with income of less than RM3000 per month. That is 70% of all Malaysian households, can you believe it? In addition, 2.7 million unmarried individuals will also be given help equivalent to 50% of what households will get. All this will cost about RM3.0 billion, which is what the government will save by this 20 sen increase. So how does this help the fiscal deficit? What it takes away with one hand to gives away with the other. This is by itself not a bad idea, but it does not add up to reducing the deficit that the government says it is trying to do.

Ministers are talking nonsense all week long about this 20 sen increase. Let’s see what they will say when the inevitable GST is imposed. That is another plan to reduce the deficit. The screaming from the long-suffering people will make the government give away more money to help the affected. So another tango move – one step forward and two steps back, or is it the other way around? We need a comprehensive plan, not ad hoc steps.

Anonymous,  5 September 2013 at 18:51  

Our regime is nothing more than a regime of
crooks, thieves, racists and

Phua Kai Lit

Happily Speaking 5 September 2013 at 19:22  

Fiscal prudence should cut wastage and corruption. Malaysia cant afford to be top all the time.

Anonymous,  6 September 2013 at 00:58  

YB Dato Sak,
Malaysia is currently ruled by a brigand of moronic, rapacious and callous oligarch that smacks of the tailend of the dying dynasties of the Melaka Sultanate, the Manchu Dynasty in imperial China or the Emperor Louis/Marie Antoinnete era prior to the French revolution.
The average IQs of the PM/DPM/Cabinet and the senior government officials would definitely be less than 100 from the statements they made or their policies in running the country.
It seems that the stolen wealth and their luxurious lifestyle have deluded them to become dim-witted in a hubris fashion totally insensitive and out of touch with the sufferings of the average person whose votes that bestowed these imbecilles the power to ride roughshod over the intelligent but docile masses.
I wonder if these people who think they are on the apex of the pyramid are god-fearing or subconsciously they don't give a damn as life is too good and who cares as they are having a life of heaven on earth. The after-life-who cares as nobody crossing over the other side has returned to tell their tales. So the motto of these elite bandits are: enjoy life to the fullest whilst it last- do as we please;,right or wrong does not matter. The others can die for all they care: they( the rakyat) can die and these so called rulers wouldn't bat an eyelid.
Malaysia is in a sad, sad state. A potential Garden of Eden on earth are turned into a little hell by leaders with satanic inclinations whilst the majority of the virtous rakyat are taken hostages till God knowns when...Sigh.

Anonymous,  6 September 2013 at 08:03  

Cut subsidy but no mentioned on eradicating wastages, leakages, corruption and unnecessary mega projects

Sort like a vicious cycle with no ending to country trade deficit and financial problems.

The ordinary folks have to change their lifestyles with lesser foods on the table while business as usual for the filthy rich minority cronies

Anonymous,  8 September 2013 at 12:08  

Salam Datuk,

We can expect this rather nefarious "spin" to be communicated deviously to the rural folks by Umngok:

"See? We care for you so much that we actually did a Robin (Robbing?) Hood job on your behalf. From the rich city slickers, to you. You're welcome."

In the wise words of Bung Mokhtar Radin:

"Petrol prices have gone up, but it surely would not burden the rakyat as the only people with big cars are prominent figures who can afford it. Kampung people don't have cars."

Alamak. Bung really needs to move into new accommodation in the Sepilok sanctuary (though I doubt the resident orang utans will respect his intelligence, either.)

Or perhaps, the line will be that "we raised fuel prices to finance this next BR1M handout."

I think PR needs a very strong strategy at rural level to counteract the lies and the bribes. Formulating it should start now.

This is the real battleground for GE14.

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