Media statement by Tony Pua Kiam Wee in Petaling Jaya on Monday, 2^nd August 2010:

The Prime Minister should drop all pretense of implementing a "market-friendly and merit-based affirmative action programme" under the 10^th Malaysia Plan

Over the past week, I've been vilified by Utusan Malaysia and Umno leaders for having suggested that one of the steps to renew investor confidence in the country's economic policies is to remove the bumiputera discount applied to luxury property purchases. The most recent threat comes from the Deputy Minister from the Prime Minister's Department and UMNO Information Chief, Datuk Ahmad Maslan who warned me not to "play with fire", using the defense of the Federal Constitution and the "social contract" as the basis for the race-based property discount policy.

The most disappointing of criticisms however, came directly from none other than the Prime Minister, Datuk Seri Najib Abdul Razak himself. Instead of commenting on the merits of the policy, he warned DAP leaders "against continuing to place pressure on the Malays and Bumiputeras on this matter because it could cause anger.

In coming up with the above suggestion, I had no intention of fanning racial sentiments or taking away the rights of bumiputeras as defined in the Constitution. I was looking at the policy strictly from the perspective of economic distributive justice. A person who purchases a RM2 million property under the current scheme of say, 7% discount will receive a benefit of RM140,000. However, a lower income person who purchases a property of RM100,000 will only receive a benefit of RM7,000, a fraction of the benefit enjoyed by the rich. The current policy is skewed towards greater benefit or "subsidy" for the wealthier community, which runs against the spirit of affirmative action policies.

The Prime Minister had in his inaugural speech on March 30 to local and foreign investors on the New Economic Model (NEM) said that the new "affirmative action approach based on "transparent and market-friendly affirmative action programmes" "will mean greater support for the Bumiputera, a greater support based on needs, not race". It is as opposed to the previous New Economic Policy (NEP) of "imposing conditions to meet specific quotas or targets".

Datuk Seri Najib has since backtracked from the above NEM proposal of not "imposing conditions to meet specific quotas or targets" in the 10th Malaysia Plan launched in June. However he had maintained that while the race-based 30% quota or target for bumiputeras will be retained, the race-based affirmative action policy will be "targetted primarily at improving the livelihoods of Bumiputera in the bottom 40% householdsˇ± through ˇ°more transparent, market-friendly and merit-based instruments".

However, his latest outright rejection of the proposal to remove race-based discounts for luxury properties flies direct in the face of not only the original NEM objectives, but also the watered-down affirmative action reforms outlined in the 10th Malaysia Plan. There is nothing that is "market-friendly" or "merit-based" in the race-based affirmative action policy of granting property discounts to wealthy individuals who could afford properties in the range of millions of ringgit.

UMNO, its mouth-piece Utusan Malaysia and Datuk Seri Najib has instead chosen to racialise and politicise the issue, inflaming racial sentiments to achieve short-term political mileage at the expense of the economy.

The above is the perfect example of what Datuk Seri Nazir Razak, the CEO of CIMB Bank had lamented recently where "wrangling over affirmative action in the proposed New Economic Model (NEM) is causing uncertainty among investors." He had added that the time has come for the government to protect the interest of the majority of the Malays and not just selected few.

Both local and foreign investors are confused by not only the indecision and ambiguity over the proposed reforms over the decades old affirmative action programme, they are also turned off by the clear indications that the deeds and policies of the Government often do not match their words, as expressed in the NEM as well as the 10MP.

If the Government has no intention to reform its affirmative action policies as it stands today, then the Prime Minister and UMNO leaders should stop the hypocrisy and pretense that the Government is going to implement a "New Economic Model" which will be based on "market-friendly" or "merit-based programmes". It'll only prove to investors that the Government is "all talk, no action" and that the Barisan Nasional is completely incapable of change, much less the transformation that is required to take us to a developed nation status by 2020.

* Tony Pua Kiam Wee, DAP National Publicity Secretary & MP for Petaling Jaya Utara