Malaysians can expect more good news when Datuk Seri Najib Tun Razak unveils Budget 2012 this afternoon at 4pm.
- Full exemption of import duty and excise duty on hybrid cars and electric cars will continue to be given until 2013.
- Civil servants get pay rise between RM80 to RM320
- Govt will extend the compulsory retirement age from 58 to 60 years old to optimise civil servants' contribution.
- Skim Amanah Rakyat (SARA) 1Malaysia will benefit 100,000 households with income below RM3,000 per month
- One-off assistance of RM500 to households with a monthly income of RM3,000 and below will be provided.
- For those in private sector earning RM5000 and below, employers' EPF contribution will increase from 12% to 13%
- Civil servants will be given an additional bonus of half-month salary and pensioners RM500.
The Prime Minister has called it “A Budget by The Rakyat” because it will for the first time incorporate the views of Malaysians who have sent their comments to his blog.
Datuk Seri Najib Tun Razak said Budget 2011, to be unveiled today, would set the pace for the transformation of Malaysia into a developed and high-income economy by the year 2020.
Transformation is certain to be the key message in his speech starting at 4pm at the Dewan Rakyat. He is expected to outline various measures to improve the rakyat’s lives, especially those in the lower income group.
Recommended reading:
* Penang recorded a budget surplus of RM77million for 2009
Malaysia's unemployment rate rose to 3.7 percent in June due to an increase in the number of unemployed persons.
This was compared to the unemployment rate of 3.2 percent a year ago, the Malaysian Statistics Department said in a statement here on Monday.
According to the department, the number of unemployed persons had increased from 370,000 a year ago to 426,600 in June this year.
In the month under review, labor force in Malaysia had increased from 11.41 million to 11.62 million, while the population outside labor force increased from 6.71 million to 6.88 million.
Highlights of the new National Automotive Policy announced today. Local assembly of luxury passenger above 1,800cc and priced above RM150,000 on-the-road fully liberalized.
Foreigners can own 100% of assembly operations.
APs to be stopped by Dec 2015.Audit on AP recipients ongoing and checks to be done. Those flouting will be removed from list.
Gradual introduction of Vehicle End of Life Policy. For starters vehicles above 15 yrs will have to undergo mandatory inspection during renewal of road tax.
Freeze on assembly of re-built commercial vehicles such as trucks and buses will continue.
Import Duty structure maintained at 0% for CKD and 5% for CBU for AFTA.
Excise duty structure remains. No changes.
All imported used vehicles prices will be gazetted to prevent under-declaration.
Manufacturing of critical components for cars such as brake system and transmission to get incentives such as Pioneer Status/Investment Tax Allowance.
The import of used parts/components will be prohibited from June 2011.
Proton to establish strategic partnership with global OEM.
Source: www.theedgemalaysia.com
Today, DPM Najib Razak will table the mini-budget seeking additional RM60billion stimulus package to stir the weakening Malaysia economy. Will the RM60billion stimulus benefit the rakyat or some contractors.
WATCH OUT FOR THIS PAGE. More updates coming.
* The whopping sum will be spent over two years as the country faces up to the reality of falling exports and drastically lower revenue.
* The RM60 billion is allocated to the four Thrusts, as follows: RM2 billion for Thrust One; RM10 billion for Thrust Two; RM29 billion for Thrust Three; and RM19 billion for Thrust Four;
* This RM60 billion accounts for almost 9 per cent of the GDP. The implementation of such a large stimulus package is unprecedented in the nation's economic history.
For the time being, remaining employees of Western Digital Media Sdn Bhd (WD), Kuching can sigh a temporary relieve as their factory closure has been postponed. WD, a harddisk manufacturer is in the midst of negotiations with an interested foreign company to take over the factory.
List of current harddisk manufacturers:
As of 2007, these vendors include Seagate, Western Digital, Samsung, ExcelStor, Toshiba, Fujitsu, and Hitachi. Fujitsu is reportedly selling it's hard disk unit to Western Digital.
If a foreign company were to buy WD, it would be either Seagate, Samsung, ExcelStor, Toshiba or Hitachi.
Related posts:
* Hitachi - Western Digital deal off
List of notable defunct harddisk manufacturers:
* Apple, Inc. - produced the proprietary Lisa 20MB Widget drive in-house in 1984 for less than two years before getting out of the drive business.
* Atasi Corp. - bankrupt
* Areal Technology - acquired by Tomen Corp
* Cogito Systems - bankrupt
* Computer Memories Inc. (CMI) - left industry in 1986
* Conner Peripherals - merged with Seagate in 1996
* Conner Technologies - merged with ExcelStor in 2001
* Control Data/Imprimis - hard disk drive business acquired by Seagate in 1989
* Digital Equipment Corporation - hard disk drive business acquired by Quantum in 1994
* Epson - left industry
* Hewlett Packard - left industry
* IBM - hard disk drive business acquired by Hitachi in 2002
* Integral Peripherals - first 1.8" rigid HDD, bankrupt in 1998
* International Memories (IMI) - spun off by Memorex in 1977, left industry in 1985
* Iomega - left industry
* JT Storage - bankrupt in 1999
* JVC - left industry
* Kalok - bankrupt in 1994
* Kyocera - left industry
* LaPine Technologies
* Maxtor - acquired by Seagate in 2006
* Memorex - acquired by Burroughs 1981 and then merged into Unisys 1986, HDD division shut down in 1988.
* Micropolis Corporation - bankrupt in 1997
* Microscience International - bankrupt in 1992
* MiniScribe - bankrupt and then acquired by Maxtor in 1990
* Ministor - bankrupt in 1998
* Mitsubishi - left industry
* NEC - left industry
* PrairieTek first 2.5" rigid HDD, bankrupt in 1991
* Priam Systems - product line acquired by Prima International in 1991
* Quantum Corporation - hard disk drive business acquired by Maxtor in 2000
* Rahm Rotationals - renamed/merged in 1994 to Tamir Tech (purchased by Quantum 1995)
* Rodime - first 3.5" rigid HDD, shut down manufacturing in 1991, licensed its patents until the patent business was sold for $1.5M in July 2003. The company was then the subject of a reverse merger and became Sportech PLC
* Storage Technology Corporation (StorageTek or STK) - left industry
* Syquest - bankrupt in 1998, some patents acquired by Iomega. Re-emerged selling cartridges for their previously-discontinued products.
* Tandon - acquired by Western Digital in 1988
* Texas Instruments - left industry
* Tulin Corporation - bankrupt
----------------------------------------------
From TheBorneoPost
Western Digital closure postponed: Dr Chan
By Chin Kee Leong
KUCHING: The closure of Western Digital Media Sdn Bhd (WD) has been postponed because the company is still in negotiations with an interested foreign company, said Deputy Chief Minister Datuk Patinggi Tan Sri Dr George Chan.
Dr Chan said when contacted, the outcome would only be known in the weeks to come.
However, Dr Chan declined to reveal the name of the foreign company interested in taking over WD’s operation.
“I was told that WD is in the midst of discussion with an international company interested in buying out the operation. Perhaps that is why WD postponed the closure date of the factory and did not want to retrench their employees just yet.
“If the negotiation is successful, the remaining employees will still be needed to continue with its factory operations,” explained Dr Chan, who is also Industrial Development Minister. Dr Chan said that negotiations would take time because it involves a large investment and must be done carefully.
He added that his ministry is trying its best to convince the potential buyer to take over WD’s operations.
Dr Chan advised WD’s employees to be patient and not take hasty action before knowing the fate of the company, which operates at the Samajaya Industrial Free Zone.
“If WD is closed later and the employees are retrenched, I believe the workers will be paid appropriate compensation – that is the requirement,” he stressed.
Dr Chan was responding to comments by WD employees that the company is putting off the actual date factory operations will cease to delay paying compensation to them.
On Monday a WD employee, who declined to be named, had complained about a letter dated Feb 3 announcing compensation would be paid on Feb 20.
The employee concerned claimed that it was the management’s strategy to pressure the employees.
“When the employees cannot stand the indefinite suspension they will quit, which means that they will not be paid compensation,” said the employee.
WD had earlier been expected to close its factory operations here next month, leaving about 1,500 employees unemployed.
Hitachi intention to buy over Western Digital Kuching which include the plants and machinery as well as absorbing the 1,000 plus WD employees is off.
Apparently, WD parent company does not want to sell it's local plants to a competitor and rather forfeited it workforce (read: mass lay off).
Related posts:
* Western Digital Kuching closing down
Come January 2009, and more factories workers and executives will be out of jobs. Expect also more phrases of "closure", "layoff", "winding down", "retrenching", "retrenchment", "downsizing", "shutdown", "tutup kilang", "kilang likup" to monopoly the newspaper frontpage in the coming weeks.
Employee layoffs have been long planned by major factories in Malaysia, probably as early as January 2008. Of course the Government as well as the factories owners vehemently denied those rumors, until now.
But make no mistake, all employees who worked at factories will be fearful of sudden termination and layoffs as early as January 2009. And what has our Government did to counter this critical issue?
The latest causalities are such as:
* Western Digital (KOMAG) factory in Kuching
From TheStar
Factories warn of layoffs
PUTRAJAYA: Several companies have indicated to the Government they will be retrenching workers in January and February.
Human Resources Ministry secretary-general Datuk Thomas George said all were in the manufacturing sector, which was extremely dependent on exports and overseas demand.
“Our labour officers have been told to focus their monitoring on areas in Penang, Selangor and Johor, where the manufacturing sector is the strongest.
“We have also been told to expect a significant increase in lay-offs in the six months ahead,” he told reporters at a briefing on Malaysia’s employment outlook on Wednesday.
However, Thomas stressed that the current situation was still healthy compared to 1998, at the height of the Asian financial crisis when there were 80,000 lay-offs.
“Normally it is around 30,000 or less. And we still have over 77,000 active vacancies registered with JobsMalaysia,” he said.
To an accusation by trade unions that reports of retrenchment and a possible slowdown had been exaggerated and exploited by unscrupulous employers, Thomas said: “This is real and we are not overdoing it. We are not shielded from it.”
He said the ministry would implement a “train and place” programme for those retrenched without compensation or benefits.
“While undergoing training, these workers will also be paid an allowance to help them tide over the crisis.”
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Unofficial news has been circulating that Western Digital (formerly KOMAG Kuching) factory in Sama Jaya Free Industrial Zone in Kuching is winding down. Closing down. Close shop. Tutup kedai. Gulung tikar.
The winding down process will takes about 3 months from now and by late March 2009, expect their gates and facilities to be in total state of shutdown.
The winding down of Western Digital factory in Kuching will resulted in another 1,000 jobless people.
UPDATES:
* Jan 25, 2009: Hitachi - Western Digital deal off
In March 2008, Western Digital (WD) said that it will cut about 800 employees from its global workforce of 42,500. The reduction is said to be primarily a result of a restructuring following the acquisition of disk maker Komag. 770 people in Malaysia and "approximately" 30 in the San Jose, California, will lose their jobs, WD stated. This news is now turning into a nightmare for the 1,000 employees in WD Kuching.
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The prices of palm oil has been spiraling downward for the past months since March. And more bad news is that palm oil prices could fall by 46 percent next year due to oversupply and waning demand for biofuels, despite measures to cut production in Southeast Asia, a brokerage group has said.
Some economists suggested that the palm oil prices can be improved if demand for biofuels is up. That is easy said than done. The only supporter of biofuels especially in Malaysia is the government. However, their consumption is marginal and would not effect the demand and supply of palm oil.
The biggest consumers are the industries and private companies operating fleets of equipments and vehicles. Only if these parties including their counter-parts in the rest of the world, increase their usage of biofuels, then we will see the recovery of palm oil prices.
So, in the meanwhile, palm oil shareholders associated with FELDA or SALCRA may not see bonus for next year. What else can the government do to cushion the effect of falling palm oil prices to the low-income earners?
From StraitsTimes
Palm oil prices to plunge
KUALA LUMPUR - PALM oil prices could fall by 46 per cent next year due to oversupply and waning demand for biofuels, despite measures to cut production in Southeast Asia, a brokerage group has said.
CLSA Asia-Pacific Markets has slashed its forecast for palm oil prices by 46 per cent in 2009 and 32 per cent in 2010, from current levels of about 1,455 ringgit (S$612) per tonne.
In a report released last week, the brokerage said it expects the commodity to trade at 1,000 ringgit per tonne next year and 1,250 ringgit in 2010.
Prices of palm oil have plummeted by 68 per cent since a March high of 4,486 ringgit per tonne due to the financial crisis and the falling price of crude oil - which reduces demand for palm oil to supply the biodiesel industry.
Malaysia's palm oil inventory in October hit a record 2.1 million tonnes - a 14 per cent increase from the previous year - due to a production surge and a slowdown in exports to China and the Netherlands.
CLSA said that the inventory build-up is much worse in Indonesia.
'The biofuels story is waning, providing less demand support. We are also sceptical about effectiveness of government initiatives to boost CPO (crude palm oil) prices,' it said.
Malaysia and Indonesia, which account for 85 per cent of global palm oil output, plan to replant old trees and mandate biodiesel use to cut supply and bolster prices.
However, Buddhika Piyasena from Fitch Ratings was less gloomy, saying that prices had 'pretty much bottomed out' at current levels and that the risk of further losses was limited.
'We might see these levels continue in the 450 dollars per tonne range for a while,' Mr Piyasena told AFP, noting that both the world's top producers, Indonesia and Malaysia, are implementing measures to push up prices.
Deputy commodities minister Kohilan Pillay said Malaysia aims to fell some 200,000 hectares of old palm oil trees and all government vehicles will start using biofuel in the next few months.
The replanting scheme will involve trees of more than 25 years old as the yield from these trees is low at about 17 tonnes per hectare annually.
Smallholders will be given a 1,000 ringgit incentive by the government for each hectare replanted.
'A good price for CPO is at the 2,000 ringgit range and this is what we are aiming for,' he told AFP.
Fitch's Piyasena said that if the measures to mandate the use of biofuel in both countries are fully implemented, it could absorb up to 1.0 million tonnes of palm oil. -- AFP
---------------------------------
Business Times: Why palm oil price is falling
The plunge in palm oil futures prices is directly linked to falling soyabean prices, says Cargill Asia Pacific regional director
THE fall in the price of palm oil boils down to a question of supply and demand, futures traders and industry executives said.
They disagreed that the decline should be directly linked to the drop in crude oil prices, widely blamed for sparking a sell-down in commodity prices globally.
The price of palm oil traded in the futures market has been falling due to an oversupply of vegetable oils worldwide.
---------------------------------
Mongabay: Falling palm oil price makes palm biodiesel viable, may offer target for NGOs
Plunging palm oil prices are increasing its attractiveness as a biofuel feedstock and thereby helping buoy demand for the oilseed, reports Reuters.
With the feedstock accounting for as much as 80 percent of the cost of producing biodiesel, surging palm oil prices due to rising demand as an ingredient in food, consumer, and industrial products have undermined the economics of biodiesel production using the oilseed. Now that prices have fallen by about half since peaking in March at 4,486 Malaysian ringgit per metric ton, it is again profitable to produce biodiesel from palm oil.
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Finance Minister Datuk Seri Najib Tun Razak, in announcing the RM7 billion stimulus package which he termed as a policy response to the crisis, said the Government was adopting an expansionary policy and extraordinary times require extraordinary measures.
Najib said the additional economic measures announced was “not a new budget” as the development and the operating expenditures remained the same. The extra RM7 billion package is actually pinched from the RM7bil savings from the fuel subsidy which was based on the global oil price of US$70 (RM206) per barrel.
The opposition group Pakatan Rakyat meanwhile stated that none of the budgetary proposals amounting to a RM7 billion injection have been tabled in the House. DAP Adviser Lim Kit Siang added, “Every sen of government allocation must be approved by Parliament. So this RM7bil injection must be approved by Parliament but the amendments were not presented before the House".
Related posts:
* Malaysia 2009 Budget Summary - Good and Bad
* MALAYSIA 2009 BUDGET HIGHLIGHTS: The Poor become poorer
From the Star
RM7bil spending
KUALA LUMPUR: A total of RM7bil will be spent by the Government in its stimulus package to boost the country’s economy in the face of the global financial crisis.
Finance Minister Datuk Seri Najib Tun Razak, in announcing the package which he termed as a policy response to the crisis, said the Government was adopting an expansionary policy.
The money is to be spent on a wide range of projects, from the LRT to repairing of houses belonging to the poor.
Among the major announcements in Najib’s winding-up reply in Parliament yesterday were:
* Gross Domestic Product (GDP) this year expected to be at least 5% while the GDP for next year is estimated to be 3.5%.
* The inflation rate expected to drop next year to between 3% and 4%, provided crude oil prices continued to fall.
* Contributors allowed to reduce their EPF contribution by three percentage points to 8%, so that they will have more money to spend.
* Civil servant car loans increased by RM10,000.
* Religious, missionary, Chinese and Tamil schools to get RM200mil as aid.
* Open tender system will be practised in the sale of government land and in government procurement.
-------------------------
Najib: Government to adopt open tender system
PETALING JAYA: Open tenders to ensure transparency and value for money as well as to generate more income will be the way forward for the Government.
Deputy Prime Minister Datuk Seri Najib Tun Razak said the Government would ensure that a large portion of government procurement would be via open and restricted tenders.
“Procurement for bumiputra contracts will also be awarded via ‘competitive bidding’ among bumiputra companies,” he added.
--------------------------------
From TheStar
A window of spending opportunity
COMMENT
By P. GUNASEGARAM
In a global downturn, the confidence factor is all-important, so the Government has chosen to spend in its RM7bil stimulus package.
WHAT do you do when you want to spend – but not too much – to keep confidence up and to make up for the restraint in expenditure when people turn cautious?
If you want to be prudent you spend from your savings, otherwise you borrow.
The Government has done it through savings – oil prices have fallen, which means that it does not have to spend as much as it anticipated in subsidies for oil and related products. This can be diverted to other areas without increasing Budget expenditure.
That’s precisely what the Government chose to do in its RM7bil stimulus package announced by Finance Minister Datuk Seri Najib Tun Razak in Parliament yesterday.
It’s a smart way to go, but doesn’t government revenue go down when the oil price goes down because we are a net exporter of oil?
Well, if you thought you caught Najib out, no you did not. You see, the national oil corporation, Petronas, pays out dividends to the Government based on the previous year’s earnings.
In 2009, the dividends the Government gets from wholly-owned Petronas will be based on 2008 earnings.
That will be high because for most of 2008, oil prices were at record levels.
But a year further out in 2010, and if oil prices remain at these levels, government revenue from oil would shrink. And what is it going to do then?
Well, it can only hope that by that time the major part of the crisis would be over and that the private sector would have regained some confidence and begun to spend more.
In which case, it may be possible for the Government then to cut back its expenditure.
If confidence still remains low, implying that the world economy has not recovered sufficiently from the problems that it has been through, then it will be a time to tighten the belt, grit the teeth and bear the pain.
What the oil price drop and the still buoyant revenues from Petronas in 2008 have given the Government is a window of opportunity to step up spending in selected areas to have maximum impact on the economy in terms of income and activity generation.
Because that window will close a year down, the Government should and has taken the opportunity to help shore up confidence by taking up some of the slack that may appear in spending. That will help keep growth up for next year.
In a global downturn, the confidence factor is all-important, even if Malaysia is relatively insulated.
The very apprehension of the future can produce bad times when too much caution chokes off economic activity and brings things to a crawl in a self-fulfilling prophecy.
The measures that the Government has undertaken recognises that there is a problem which needs action and soon.
As Najib said in a briefing to editors: “We are not in denial. Otherwise, why would we announce these measures?”
But new ways of doing things have to be examined. The plan to raise revenue by selling government land through tenders must be welcomed.
But the Government should seriously consider adding value by breaking up the parcels and selling smaller pieces to maximise value.
Voluntary cuts in Employees Provident Fund contributions have been tried before.
The three-percentage-point cut proposed is not something we are in favour of because it will reduce the eventual retirement benefits of those who will probably need it the most.
It would have been better to reduce taxes where possible so that consumers can get more bangs for the same buck.
Still, that cut is only for two years and therefore the long-term impact may not be too adverse on retirement savings.
All said, there is little to fault the package and a lot to praise in terms of helping to mitigate the fall-out from a crumbling global economy following the financial meltdown in the US and Europe.
That’s however for the short term. As the conversation with editors drifted to Obama and McCain and how open the US was and how it would recover quickly because it was so open, Najib made an observation.
“Any society which is open tends to do well. The only way Malaysia can move forward is to be more open.”
It would be interesting to see what the Finance Minister and the future Prime Minister will do in the longer term to help secure Malaysia’s place in the future and in the world.
--------------------------------
From The Star
HMs elated by generous allocation for schools
PETALING JAYA: The Government’s RM7bil stimulus package has given all national-type and government-aided schools a reason to cheer.
An allocation of RM200mil will be evenly distributed to SJK(T), SJK(C), religious and mission schools with each school type receiving RM50mil.
When contacted, Education director-general Datuk Alimuddin Mohd Dom said that the move would improve Malaysian education as many schools would benefit.
“The allocation is meant primarily for schools to upgrade their infrastructure and furniture,” he said.
“On top of that, the allocation can also help schools improve their teaching and learning tools.”
His view was shared by the National Union of the Teaching Profession president Hashim Adnan, also the principal of SK Sungai Ramai – a religious school in Air Tawar, Perak.
“It is a good move by the Government as many schools lack proper infrastructure and the allocation will enable these schools to upgrade their old and damaged buildings,” he said.
Meanwhile, principals from various school lauded the move in the interest of fairness.
“It is very fair that all national schools will get the same amount,” said SJK(C) Salak South, Kuala Lumpur, principal Lim Choy Kim.
“My school is in need of upgrades and repairs and the allocation can really help improve learning conditions,” said Lim.
Likewise, SJK(T) Thamboosamy Pillai, Kuala Lumpur, principal Vanaja Seenivasagam said the equal allocation was fantastic and hoped that it would help ease the shortage of classrooms, and pay for the repair of the dilapidated roof and rewiring.
While some already have a wish list, SK Methodist ACS, Seremban, principal Wong Mei Peng was just happy to hear the news.
“This allocation is really what I need,” she said.
“Mission schools have been waiting for a long time for this, and I’m happy with the Government’s move.
“Maybe now I can solve my school’s termite problems once and for all,” she said.
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Here is the summary of Malaysia 2009 Budget which are mostly bad verdicts than good verdicts. The 2009 budget virtually coincided with Malaysia's 51st National Independence Day but any nationalist sentiments of solidarity in the face of global adversity and helping the poor failed to convince Malaysians about the budget. To me, it's a bitter sweet budget.
In the business sector, the 2009 Budget, whilst not penalizing business is going to do practically nothing to encourage business.
For the ICT industry, the five-year tax exemption offered to venture capitalists that fund local startups is good but the budget did not provide incentives to reduce infrastructure costs, including the removal of import duty and sales tax exemptions on broadband equipment and consumer-access devices.
For the common rakyat, some of enhance tax benefit like additional RM50 or 1% reduction is so negligible and almost make no difference. Same as the gimmick of giving RM20 electricity exemption.
In the Health sector, the Government will continue to provide free health services for Malaysians. A sum of RM13.7 billion is allocated in 2009 to enhance health facilities and provide equipments, increase supply of medicines, develop human resources, intensify research and enforcement activities, as well as build more hospitals, clinics and quarters but some hospital are still overcrowding and shortage of health staffs, and there is no plan to improve the situation.
For the farmers, promise of reduction (of control pricing) on fertilizers and weedkiller/pesticides is good but it's one year late. Farmers has been struggling due to skyrocketing cost of fertilizers and weedkiller and only now the government act. If the government can control the price, why didn't they do it months ago !
I completely failed to understand why the Deficit is now higher than last year, when Petronas should be contributing even higher. It's a complete absence of C.A.T. (Competency, Accountability and Transparency)and no doubt, the most caring budget the PM has come up .... for his croonies and son in law.
They are just continuing being a big spender of our rakyat's fund and out of ideas, what they know is to try to gain rakyat's heart by giving away little sweets and buy desperate votes
Anwar Ibrahim’s “budget policy brief”:
“While the 2009 National Budget has been touted in the mainstream government press as a “business friendly budget”( Star, 30 Aug.), experts have already contradicted that notion. This can be seen in the two page coverage of responses by leading tax experts (from Ernst & Young, PricewaterhouseCoopers, Deloitte and KPMG) acting on behalf of the country’s top businesses and corporate clients. Their verdict was that this is a budget that whilst not penalizing business is going to do practically nothing to encourage business . The plan has not substantive initiatives to encourage business big or small, and no compelling proposals to improve Malaysia’s competitiveness in the context of the global economic slowdown.”
Lim Kit Siang says it 2009 Budget - Abdullah fighting for his political life
“It is a populist budget to deflect the growing popularity of Anwar”
Never before in Malaysia’s 51-year history has a budget received so little national interest and public attention – as all focus is on how long the Barisan Nasional government can last or Abdullah survive as Prime Minister.
From Budget 2009 - A Layman’s View
Rojak
This budget appears to be a rojak of little bits and pieces for various segments of the economy, none good enough to address key indicators that can mitigate a fast weakening economy. These tax relief for consumer electrical items as well as fruit juice to name a few does not help Malaysians to weather the serious inflation impact caused by fuel price increases in June this year.
Personal Little Value
The BN Government allowed for a 1% decrease in tax for the high bracket makes little impact to alleviate inflationary impact. Tax breaks for transport allowance gives the impact to a small group of fortunate employees. Certainly, civil servants find another break but poor pensioners will hardly get a twitch of eyelid from the Budget.
Missed the Key Economic Challenges
Hugh spending on proposed transportation as well as road infrastructure does not address any economy and inflationary challenges. Fundamental energizing projects to spur the economy should be broadbase infrastructure which can cause a massive trickle down effect. Serious increase in Government’s own expenses will worsen the deficit and appears senseless, especially when the BN Government had hardly grew large internal systems that require maintenance of that magnitude. Maybe there were serious plans to set aside billions of Ringgit for future yet to be dreamed of projects next year. Instead of improving the standing of the country, Standard&Poor have found it needful to lower our standing because of the additional deficit proposed.
Paying for East Malaysian Loyalty?
Interestingly, a large part of the budget allocation was for East Malaysian states of Sabah and Sarawak. Much more so for Sarawak and both goes into the billions of Ringgit. Is it part of a sudden awareness that Sabah and Sarawak have long been forgotten and now is time to appeal to them? Is it part of a bargain to be struck with East Malaysian states in return for their undying support to the present BN Government? This allocation is definitely unusual as it has not been done in this magnitude before in any budgets. East Malaysia should not be forgotten and neither should the budget be lopsided until this glaring point.
Not Helping the Hardcore Poor
It is very sad that the rhetorics of eradicating the hardcore poor has yet to be translated into something substantial in the Budget. It is every Malaysian’s responsibility to ensure that fellow Malaysians must have at least a meal a day as well as roof over their heads. After 51 years of Merdeka, we still have substantial hard core poor especially in Sabah and Sarawak and this Budget has still nothing much for giving them hope. Higher prices of food have driven them to a far worse position and the Budget is not going to do anything to help improve their position. More roads is good for East Malaysia but not at the expense of the hard core poor.
Poor Assumptions
In a nutshell, there is no specific actions within the Budget to address key economic challenges and inflationary pressures. It assumes that a recovery in global economy will help propel Malaysia back into a good shape. Large scale projects remain a worry not in the projects themselves but in the abuse in awarding as well as potential leakages to the system. The serious billions of Ringgits in various large allocations for infrastructure and transportation may be wasted if the award of tenders remain questionable.
Will the global oil price keep dropping? Will the global economy recover? Don’t hold your breath, not so soon. We need serious key budget actions to prop up the economy and help all Malaysians fight inflation before it eats us dry. Giving breaks where it sounds preposterous like anyone with RM20 power bills can skip paying them. All the breaks are for very small target groups. Lots of words, no action. Another NATO budget?
Malaysia 2009 Budget worth RM207.9 million prepared by the Barisan Nasional has plenty shortcomings. I don't see much benefits for the common rakyat. One of the best response to the 2009 Budget: The poor would need the saved money for food and necessities whilst the rich would not even be affected by any tax cuts as most of them ‘park’ their money overseas anyway, to earn higher interest.
Updates:
* Sep 04, 2008: Malaysia 2009 Budget Summary - Good and Bad
These are highlights of the 2009 Budget announced by Prime Minister Datuk Seri Abdullah Ahmad Badawi and WHAT'S IN IT FOR YOU ?
My commentary are marked "MD:"
* Some 100,000 tax payers to be out of the tax net as rebate for taxable income of RM35,000 and below will be increased to RM400 from RM350
MD: That will be about RM5 million subsided by the government for the mid-income earners.
* Tax exemption for all interest income for individuals
MD: I presumed interest income include interest on capital savings in bank, share interest, dividend interest. If the interest income is exempted for all individuals, it even benefit the riches who before this may not enjoy all the tax exemption on interest income. The poor could only save their small amount of money in the bank so even if their interest income is not tax, it would not increase their total saving much.
* Reduction of import duties for consumer durables (examples: blender, rice cooker, microwave oven and electric kettle) to between 5 percent and 30 percent from 10 percent and 60 percent
MD: PM think that we buy those items everyday and reduce the import duties for it. Purely bunga. Does not benefit the rakyat. And I thought Malaysia have an advance electronic industry and we are still importing those items ?
* Import duty exemption on several food items including vermicelli, biscuits, fruit juices and canned sweet corn.
MD: Cost saving for seasonal food items. No total benefit for the rakyat.
* Road tax for passenger vehicles with diesel engines to be similar with petrol engines effective Sept 1, 2008
MD: Maybe motorbikes should also pay the same rate. Hey, they also occupied the same lane !
* Tax exemption for employees on staff benefits such as subsidized interest on housing, motor vehicles and education loans
MD: Only in Malaysia you have your loan taxed !
* Bills of mobile and fixed line phones as well as internet paid by employers to be tax-exempted
MD: Employers here are the government department. Private companies DOES NOT pay 100% of the telephone bills unless it is for the bosses themselves or the office. Staff can only claims business calls. So again, no benefits to the rakyat or the private employees.
* Government to provide RM3 billion soft loan facility under public transportation to finance acquisition of buses and rail assets to be administered by Bank Pembangunan Malaysia Bhd.
MD: Buses and rail are only suitable for West Malaysia. No loan facility for public transportation in rural Sabah and Sarawak for assets like boats and off-road vehicles.
* 50 percent reduction in toll charges for all buses, except at border entry points, for two years effective Sept 15, 2008
MD: Toll charges should have been reduced long time ago. After all, PLUS have been making yearly profits.
* Efficiency of public transportation to be improved via RM35 billion expenditure from 2009 to 2014
MD: No allocation for transportation in the rural areas.
* Farmers to benefit from proposal to abolish import duty on fertilizers and pesticides
MD: For so many months, the poor farmers suffered because of the skyrocketing cost of fertilizers and pesticides. Those poor farmers suffered while the government hassle on to protect the fertilizers and pesticides suppliers. Read also: High oil prices affect padi planters in remote Sarawak
* Home ownership among civil servants to be boosted by extension of housing loans tenure to 30 years from 25 years
MD: Another 5 years for the home owners to suffer. Paying loans in longer repayment only encourage the rakyat to take it easy on repaying loans. And this bad habits will become a burden in the loan terms. Most people will be repaying loans until they die.
* Government housing loan insurance panel to be expanded to all eligible insurance companies from only five insurance companies now.
MD: See, only now there is a break in the monopoly chain.
* Excise duties on cigarettes up three sen to 18 sen per stick. Duty for 20-stick pack now up 60 sen
MD: Barisan Nasional did not realize that over 90% of smokers in Malaysia are Malays from low income bracket.
* Highest marginal tax rate for individuals to be cut to 27 percent from 28 percent effective year of assessment 2009.
MD: This make the rich, richer. If in the previous years, the rich lives like a king, now they still lives like a king.
* Middle income group to benefit from cut in marginal tax rate to 12 percent from 13 percent.
MD: Only a tiny one percent tax cut for the middle income group. There are millions of them.
* Accelerated capital allowance for purchase of ICT equipment can be claimed over one year instead of two years (86).
MD: Not many will buy ICT equipment like PC or Notebook every year. So, yearly claim on those ICT equipment is just a show.
* Import prohibition on cranes used at ports to be removed. Import duty for the cranes cut to 5 percent from 20 percent (88)
MD: Haiyo, no every year a port procure new cranes. Cut on the import duty for the cranes is just a show.
* New investments by operators of four-star & five-star hotels in Sabah and Sarawak to enjoy pioneer status with 100 percent income tax exemption or investment tax allowance of 100 percent for five years.
MD: Again, it does not benefit the rakyat. The hotel industry in Sabah and Sarawak also slow down due to weaker economy and higher cost of travel (thus lower revenue from tourism turnover). Operators will think many times before investing in new projects in the current economic condition. Another show.
* Venture capital companies to enjoy five-year tax exemption for investing at least 30 percent of their funds in start-up, early stage financing or seed capital.
MD: Good benefit for foreigners.
* Local shipping industry to be promoted via a new RM2 billion fund to finance the purchase of ships and upgrading of shipyards.
MD: Want to boost local shipping industry ? Maybe helping MISC (related to Petronas) or the Navy to buy more ships.
* Plants and machinery acquired by SMEs in the years of assessment 2009 and 2010 to be accorded accelerated capital allowance to be claimed within one year.
MD: okay.
* Removed - import duty and sales tax on solar photovoltaic system equipment.
MD: The problem is the rakyat still depend on TNB. Furthermore, solar equipment in Malaysia is not 100% suitable due to rain and shine weather factor. Solar equipment is definitely useful in the desert, not in the tropic. You don't get a lot of solar power during the monsoon seasons. That's why TNB is still depended on.
* Removed - import duty and sales tax on intermediate goods such as high efficiency motors and insulation materials.
MD: High efficiency motors ? Emm, maybe to support Proton next project on hybrid cars ?
* Removed - sales tax on locally manufactured solar heating system equipment.
MD: Only a handful of local companies manufacture solar heating system equipment.
* Removed - sales tax on locally manufactured energy efficient consumer goods such as refrigerators, air conditioners, lighting, fans and TVs.
MD: Okay.
* Exemption of 100 percent import duty & 50 percent excise duty on new hybrid CBU cars, with engine capacity below two 2,000 cc litre to be given to franchise importers. The exemption is for two years.
MD: Good for NAZA motors.
* One month bonus for civil servants, subject to a minimum of RM1,000. Payment in two installments - September and December 2008
MD: A typical government servant benefits. 11 months working, 13 months pay.
---------------------------------
VoxPop: 'Main issues not addressed in Budget'
PM unveils biggest Budget ever
Dr Ravichandran: No doubt it was a people friendly budget. But wasn’t it a little bit too friendly to the Sabahans and Sarawakians? I wonder why? I don’t think it was caring enough, though.
The fundamentals in improving the economy were not equally addressed. This was made worse by the fact that there is going to be an extra RM30 billion in spending. It seems like the nation is going to be burdened by a populist budget. National unity between races and religions was also not addressed. All we can do now is hope for the best.
TTM: The current ruling party has managed our hard earned money for 50 years. Anyone dare to check the transactions in Bank Negara on how they spent it? Is the money being used to help Malaysians or certain individuals?
We need someone to check the accounts.
A Disgrunted Working Class Malaysian: Firstly, kudos to our dear PM for delivering such wonderful ‘gifts’ and ‘donations’ to the poor and super rich Malaysians alike.
Sadly, unless we are in the dark ages of the 12th century, we all know which of these people drive the Malaysian economy.
In my opinion, neither. Want to know why? Because the poor would need the saved money for food and necessities whilst the rich would not even be affected by any tax cuts as most of them ‘park’ their money overseas anyway, to earn higher interest.
So this begs the question: Where are the benefits for the working middle-class? I am ashamed of such a lame, ineffective budget.
Millionth Citizen: A RM207.9 billion budget is mind boggling. Imagine if there was even a one percent of wastage due to whatever reason. A one percent wastage may sound small but imagine how far RM2.07 billion could go in helping alleviate people’s problems.
Therefore, leaving politics aside, what the rakyat want is transparency and accountability because too much has been promised and nothing has actually been done. It is high time you ‘walked the talk’, Mr PM.
Forward As One: Anyone notice that when Pak Lah is desperate, he resorts to Mahathir-type policies? When he became PM in 2003, one of his stated goals was to lower the budget deficit. Last Friday, he turned this on its head and opted to balloon the deficit to 4.8 percent of GDP, a level not seen since Mahathir's pump-priming last years.
But then we've seen Pak Lah do this before. In the early days, he canceled the crooked Causeway and suspended double-tracking. Fast forward to 2007, he reverts to mega-corridors and revival of double-tracking supposedly to jumpstart the economy.
In 2003, he promised less corruption and more enforcement. Today, we see corruption in the government administration being more prevalent than ever.
Remember the ‘Mr Nice Guy’ image and the promise of a kinder, gentler PM? Then see what happened when Anwar emerged as a political foe?
Strangely enough, Mahathir today condemns Pak Lah when he ought to be flattered his successor is employing his tactics. Perhaps that's not unusual - the good doctor doesn't like the medicine he used to mete out when he's on the receiving end.
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Not all is fine on Malaysia economy front. In fact, by 2011 Malaysia is expected to be a nett importer of oil. Currently Malaysia is a member Oil Producing Countries (OPEC) and have enjoy huge revenue from exporting oils. The main beneficiary of the oil boons is Petronas.
The disappointing facts are that, the oil reserve is getting less, the demand is ever rising and the government has no real plan to cushion the effect. The moment oil is imported, the prices of other goods and services will be skyrocketed, and government will also have less fund for subsidy. The prices of things now is related okay since Malaysia still export oil.
Relevant authorities are too slow in formulating plans for alternative energy to power the nation electricity demand as well as providing better and cheaper public transportation system.
Related posts:
* Malaysia will be broke soon because of subsidy
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Source: sun2surf.com/article.cfm?id=22314 (May 13, 2008)
Fleet card way to manage fuel subsidy
Himanshu Bhatt
OTHER STORIES : Transport Ministry reviews 'ineffective' road safety campaigns | Penang govt looking to improve crisis management
GEORGE TOWN (May 13, 2008): The federal government is studying a mechanism that will help remove the blanket subsidy on fuel currently given to the Malaysian public by ensuring it reaches only the people who genuinely need it.
Studies are being conducted to formulate a nationwide system that allows the government to give subsidy based on the income of an individual.
Sources told theun that the authorities are looking into the option of implementing a fleet card system for vehicle owners from lower income groups.
Eligible citizens who hold the authorised card can fill their vehicles with subsidised fuel.
Higher income citizens would pay rates that more closely reflect market prices.
The move is seen as an initial step to gradually phase out altogether petrol subsidy that is now given to the general public - by first limiting aid only to certain income groups.
A fleet card system is seen as a more favourable mechanism that can ensure only financially deserving people get subsidy.
"The government wants to find a more efficient way to give subsidy to the right people," the source added. "Currently, subsidy is benefiting everybody, including the rich."
"The government wants to target subsidy to the right group and give the lower income people a choice."
Details of the scheme are being looked into by the Finance Ministry and the Domestic Trade and Consumer Affairs Ministry.
The fleet card system has been implemented nationwide before. In 2005, for example, commercial land transport operators were given the cards to get subsidised diesel.
The scheme was open to public transport vehicles registered under the Commercial Vehicles Licensing Board (CVLB).
The idea to restrict subsidy distribution for fuel is based on prevailing assumptions that subsidy is not in the long-term interest of the nation, as the spiraling global prices of crude oil has affected the government's ability to fund certain development projects.
Malaysia is expected to be a nett importer of oil by 2011.
The authorities however recognise that a reduction or abolition of subsidy is not practical now with the current food-price crisis. The fleet card system is considered a more practical option.
The government’s subsidy for petroleum for the general public in 2007 came up to RM16.181 billion.
Badawi is advising the rakyat to be prudent in their spending due to the gloomy global economy, rising oil prices and disruption of staple food supplies such as rice and wheat.
Has he forgotten that during his last term, he has a spending spree without considering that Malaysia economy is weak. Some of the mega projects only benefited the politicians as those politicians usually have vested interests by being the middleman between Badawi and crooked businessmen.
Due to the wasteful nature of those mega projects which does not benefited the rakyat, Malaysia is on the brink of bankruptcy. No much cash reserve to spare and that's why Badawi is urging the rakyat to be mindful of their spending. Total bull. Badawi and his cronies are the one who should tie their stomach and fast, and stop their habits of giving free money to his politicians (read: mis-use of funds).
As the head of the government, Badawi should be telling himself to spend within Malaysia's means.
Listed below as some of his spending spree that constitutes to misappropriation of funds:
* Send a space flight participant for a space ride to International Space Station
* Send Malaysian army to guard England's Buckingham palace
* Held the RM300 million Moonsoon Cup in Terengganu
* Bail out of Malaysia Airlines
* Bail out of Proton
* Proposal for a bullet train track from Kuala Lumpur to Singapore
* Paying compensation for canceling the "crooked bridge" linking Johor and Singapore
* RM47 Billion Iskandar Malaysia Project
Other whooping MEGA projects (at least RM90 Billion) under Badawi's administration includes:
1 ) Trans-Peninsular Oil Pipeline
- Cost: RM25 billion (US$7.5 billion)
- Beneficiary: Trans Peninsular Sdn Bhd, Ranhill Bhd
- Financing: PFI
2 ) Ipoh-Padang Besar Double-Track Railway
- Cost: RM10 billion (Land cost not determined)
- Beneficiary: MMC-Gamuda
- Financing: PFI
3 ) Extension of Existing LRT Lines in Klang Valley
- Cost: RM10 billion
- Beneficiary: Bombardier Canada, Scomi Engineering and UEM Builders
- Financing: Government bonds
4 ) New 40km LRT Line with Underground Tunnel Across KL
- Cost: RM10 billion
- Beneficiary: Scomi Engineering, MMC, MAA, Gamuda, IJM and UEM Builders
- Financing: Government bonds
5 ) The Bakun Undersea Cable
- Cost: RM9 billion
- Beneficiary: Sime darby-MRCB
- Financing: PFI
6 ) High-Speed Train to Singapore
- Cost: RM8 billion (Land cost not determined)
- Beneficiary: YTL
- Financing: Not determined, probably PFI
7 ) Hulu Langat Water Treatment Project, Selangor
- Cost: RM5 billion
- Beneficiary: Kumpulan Prangsang Selangor
- Financing: Government funding
8 ) Pahang-Selangor Inter-state Water Transfer
- Cost: RM4 billion
- Beneficiary: UEM,Gamuda and Japanese consortia
- Financing: Not determined, probably JBIC loan
9 ) West Coast Highway
- Cost: RM3.05 billion
- Beneficiary: Kumpulan Europlus and IJM
- Financing: PFI
10 ) Penang Monorail
- Cost: RM1.2 billion to RM1.6 billion
- Beneficiary: 4 companies have responded to RFP
- Financing: Government funding
11 ) River Cleaning Project
- Cost: RM1 billion
- Beneficiary: YTL, Progressive Impact
- Financing: Not determined, probably government
Related posts:
* TheEdgeDaily: 25 Jun 2007: Cover Story: A 10-point checklist for mega projects
* TheEdgeDaily: 25 Jun 2007: Cover Story: RM90 billion boomtown
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Source: nst.com.my/Current_News/NST/Monday/NewsBreak/20080505102625/Article/index_html (May 05, 2008)
Spend within your means, advises PM
BERNAMA
PUTRAJAYA, MON:
Consumers must change their lifestyle by being prudent and spending within their means at a time when the world is facing food supply shortage, Datuk Seri Abdullah Ahmad Badawi said today.
The prime minister advised them to avoid food wastage, especially when hosting feasts, serving guests with excessive food.
They should also play a role to help law enforcers to monitor prices of goods, he said.
The public should report to enforcement agencies if they had information on smuggling, hoarding and cheating of prices, he said when addressing staff of the Prime Minister’s Department at the monthly assembly.
Abdullah said people having land are encouraged to plant vegetables and fruits.
Abdullah said these efforts may be seen as trivial but it would have a major positive impact if all consumers changed their lifestyle.
He said the government had taken appropriate measures to mitigate the food supply shortage problem by making available a RM4 billion allocation to ensure adequate food supply for the people.
The allocation had already been given to the ministry and the department concerned to help boost the nation’s food production, said Abdullah, who is also Finance Minister.
The government had also set up a rice stockpile while a bigger stockpile to meet the food demand is being initiated, he said.
“Though prices of goods in the country have gone up but they are still relatively low when compared to prices in neighbouring countries and this had resulted in smuggling,” he said.
He described food smugglers as the “people’s traitors” for indulging in such activities when “our own people are facing food supply shortage.”
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