Penang will prevent BN from turning our state into an “Ah-Long” society by banning property developers who become money lenders at 18% annual interest. The Penang state government will direct both local councils, Majlis Bandaraya Pulau Pinang(MBPP) and Majlis Perbandaran Seberang Perai(MPSP), not to approve any development projects of property developers who become money lenders to allow housebuyers who cannot secure bank loans to borrow from property developers at high interest rate.
The Penang state government strongly objects to the proposal to issue money lending licenses to property developers to allow housebuyers who cannot get bank loans to borrow from property developers. This is no different from the subprime lending in the United States 10 years ago, which led to the 2007-9 financial crisis.
Property developers can only lend money to housebuyers at up to 18% annual interest because they borrow money at commercial rates from banks. How many developers can afford to build their own housing projects from internally generated funds without borrowing from banks? Lending at such high interest rate to housebuyers is a recipe for future disaster because in a year, there will be mass foreclosure and auctions by property developers on housebuyers unable to pay at “Ah Long-like’ rates.
BN should differentiate clearly the respective roles played by banks and property developers, with the former’s role to lend money responsibly and the latter’s role to build houses. Mixing up the two will definitely cause financial crisis and economic collapse as proven by the sub-prime lending crisis in the US.
Once again, BN has failed to deliver with failed economic management until the Federal government has run out of money and also the failure of the banking system that cannot assist first-time buyers and the poor to buy public or cheap housing. Bank Negara’s strict lending guidelines is explained by the high household debt of more than RM1 trillion with a household debt to GDP ratio of nearly 90%. However this begs the question why Bank Negara did not direct the banks to lend to first time housebueyers and the poor, when many low-cost and low-medium cost housing are empty because the poor cannot secure bank loans?
BN Unlikely To Go For Early General Elections If They Cannot Fill In The Revenue Shortfall RM17 Billion?
There is no doubt that the Federal government has run out of money due to its widespread corruption that has reached global proportions until the Kleptocracy Division of the United States Department of Justice is seizing a world record USD1 billon of assets belonging to 1MDB officials. The drop in world oil prices has made the situation worse for Malaysia. Even the introduction of GST that caused bad economic conditions, cannot replace the reduced revenue. Economists expect a shortfall of RM17 billion in revenue for Malaysia for this year, a huge sum by any standard.
No wonder the Internal Revenue Department is harassing businessmen with unreasonable investigations to get more money when they should be focusing on UMNO politicians who obtain huge donations in their bank accounts. Due to this revenue shortfall of RM 17 billion this year, BN is unlikely to go for early general elections unless they can fill in this revenue shortfall. 2017 to 2018 is expected to be a better economic year for Malaysia.
In the meantime, BN is relying on extremist and racial issues to distract attention from our economic problems. Malaysians must prove that they are not so gullible to be deceived by BN when we should be united against the real economic challenges facing the country and not the imagined and false threats of non-Muslims against Islam or non-Malays against Malays.