Financial Burden of the People

Last year, when the Prime Minister tabled the Budget 2005, it was called the “mesra Rakyat” but the people in Malaysia suffered in this year because the government increased the prices of petrol and diesel this year.

In the budget speech, the Prime Minister repeated his earlier statement that there will not be further increase in petrol and diesel price until end of 2005. We are now talking about the budget for the year 2006. What is the point of repeating the government’s earlier statement that it will not increase petrol and diesel prices until end of year 2005 when we are now talking about the budget for year 2006. Afterall, there have already been 15% petrol price hike and 40% diesel price hike over the last 6 months, the increase is way above the government’s official inflation rate.

Last year, right after the budget speech, there was an increase in the price of petrol and diesel. Thereafter in year 2005, every Malaysian suffers from the ridiculous price increase in petrol and diesel. What we want to know now is whether the government will increase the price of petrol and diesel in the coming year 2006?

The government is putting the blame of petrol and diesel price hike on the increase in international crude oil prices. In actual fact, the increase in international crude oil prices has brought unprecedented profit and income to the Government. For financial year ending 31-3-2005, Petronas made a pre-tax profit of RM59 billion. Petronas, being a government owned company, its profit is government’s income. It was also announced that Petronas’ profit for the present financial is estimated to surpass RM100 billion.

The government seems to have a very seriously wrong concept about the ownership of crude oil. Natural resources like oil belong to the people of Malaysia, not Barisan Nasional government. The proceeds of sales earned from the extraction and sale of oil belongs to the people, not the government. Therefore it is only fair and equitable that the government should subsidize the use of petrol and diesel by the people. To provide subsidy for petrol and diesel is the duty of the government. It is not a charitable act. 

By the so-called economic relief package of reducing road tax and the two year freeze in highway toll until 2007, the people only saved RM563.5 million. On the other hand, the increase of petrol and diesel prices this year will cost the people an additional RM2.3 billion.

By the reduction of road tax, a person driving a 800cc car enjoys a reduction of RM80.00. By a conservative estimate, a person driving 800cc car, on average, spend about RM40 per week in petrol consumption, thus approximately RM160.00. The 15% increase in petrol price will cost the driver an additional RM24.00 per month, RM288.00 per year. The driver only gets a reduction of RM80 for his road tax for one year.

This is like taking RM10.00 from the people and giving them RM2.00 and yet asking the people to be grateful to the government for refunding them the RM2.00 and to praise the government as a caring government. If a thief stole RM10.00 from you and then return RM2.00 to you, you don’t call him a good thief, he has taken money from you, be it RM10.00 or RM8.00, he is still a thief. By the same analogy, the government has robbed the people of what they are justly entitled.

It is puzzling why the government finds it hard to take out a sum of RM16 billion to subsidize the people when the government, through Petronas, earns RM59 billion in pre-tax profit. Is the predicament faced by the government a result of the over-spending by the government and the construction of those white elephant mega projects? Is one of these white elephant projects the Petronas twin tower which until today we are still repaying the loan granted by financial institutions for the construction thereof? And the million-dollar question which every Malaysian wants to know:
 

1.         Is the government going to increase the price of diesel and petrol in year 2006?

2.         If so, by how much is the government going to increase the prices of petrol and diesel?

Balanced Development between West Malaysia and East Malaysia?

In the PM’s speech, there is a specific mention about bringing balanced growth to Sabah and Sarawak, to further develop infrastructure and public amenities in the two states. When one talks about balanced growth, it is to bring the level of development in the two states to be at par with West Malaysia. 

According to the Prime Minister, a development fund of RM2.3 billion will be channeled to Sabah and RM2.1 billion will be channeled to Sarawak. For Sabah, the RM2.3 billion includes construction of roads, provision of water and electricity supply, education and health projects. For Sarawak, the RM2.1 billion fund will include the construction of roads, the Kuching Airport, further expansion of Unimas, federal building in Sarawak, project for the provision of water and electric in rural area. It seems that these funds cover all aspects of development fund in Sabah and Sarawak. If these were the case, we the eastern Malaysian states are being further discriminated by the Federal government. 

Out of the total development fund of RM35 billion, Sarawak is only getting RM2.1 billion which is less than 10% of the total development fund. The population of Sarawak is about 2.3 million which is approximately 10% of our country’s population. We are not even getting our fair share of the development fund.

Furthermore, if we are talking about developing the basic infrastructure like roads, rural electrification, the most important factor is the surface area of the state. The surface area of Sarawak is more than 1/3 of the total surface area of Malaysia. Calculating on that basis, Sarawak needs 1/3 of the development fund for the construction of the infrastructure and public amenities so that there will be a balanced development between Sarawak and West Malaysia.

In terms of infrastructural development, we are already 20 years behind West Malaysia. If the Federal Government continues to discriminate against us by allocating less than our fair share of the development fund, how are we going to achieve balanced development? Therefore, I suggest, given that infrastructure and public amenities in Sarawak is so much behind West Malaysia, the development fund for Sarawak should be increased to at least 20% of the total development fund. Otherwise, we will always be lagging behind the West in terms of development. The same goes for Sabah.

Incomplete Budget and one for the Bumiputras Only

In general, the Budget 2006 is not complete. It has totally failed to address the government’s monetary policy and foreign exchange policy in the year 2006. These policies are very important in economic development of a country.
 

Budget 2006 seems to be a budget for Bumiputra not a budget for all Malaysian, the few examples are as follows:
 

1.         the allocation of RM2 billion to Yayasan Amanah Hartanah Bumiputra to purchase commercial properties, especially in major towns. This will benefit the Bumiputra crony companies;

2.         The establishment of RM1 billion fund for Export Import Bank Malaysia (EXIM) to assist and encourage Bumiputra entrepreneurs to venture abroad. This will also benefit the Bumiputra crony companies;

3.         A total fund of RM3.6 billion allocated to construct quarters for government servants and uniformed personnel. The construction work will mainly be undertaken by Bumiputra small local contractors; and

4.         A total fund of RM5.7 billion is allocated to improve the economy and infrastructure of the rural area. To implement the projects under this head, local small Bumiputra contractors will be appointed.

It seems that all government projects are to be undertaken by Bumiputra contractors. What is left for those non-Bumiputra contractors? What are they going to do?

I do not have objection to the government helping the Bumiputras, but the government should also give a chance to the non-Bumiputra contractors. Why are the non-Bumiputra contractors being totally left out in the Budget? They are also Malaysian citizens and they also pay taxes to the government. There are also many non-Bumiputra contractors who are now suffering financial problems because of the economic downturn and who needs government contracts to survive. Therefore, I urge the government to consider award some of the projects to non-Bumiputra contractors when implementing the projects in 2006.