Don’t Be Jumud, Jomo

I read with amusement a recent article posted on an Opposition-leaning news portal how Jomo Kwame Sundaram’s answer to address a ballooning debt is by cutting the Prime Minister’s Office’s spending, and also to reduce the number of mega-projects.

Jomo, who is Visiting Senior Fellow at Khazanah Research Institute, said that what Malaysia needs now is more appropriate development expenditure, not yet more operating expenditure, especially for the PMO, which has grown more than tenfold and has centralised power like never before.

According to the article, the PMO was allocated RM17.43 billion in Budget 2018, almost double the RM8.938 billion it received in 2008.

The Prime Minister’s Office or the Prime Minister’s Department?

The Visiting Fellow at Khazanah Research Institute apparently finds it difficult to distinguish between the Prime Minister’s Office and the Prime Minister’s Department.

According to Budget 2018, RM17.43 billion was allocated to the Prime Minister’s Department, and not the Prime Minister’s Office.

The Prime Minister’s Office is only one of 56 agencies under the Prime Minister’s Department.

I don’t know what was Jomo also trying to imply by saying that the PMO has more centralised power like never before.

Since the budget is for the PMD and not the PMO, the centralised power and authority to spend the budget comes under the Chief Secretary to the Government of Malaysia, who is appointed by the Yang DiPertuan Agong.

Major agencies under the Prime Minister’s Department include the 7,000-strong Malaysian Maritime Enforcement Agency, the 3,000-strong Civil Defence Force as well as the Eastern Sabah Security Command (ESSCOM).

All these agencies have been tasked to look after our security and well-being.

In 2008, there was no MMEA nor was there the ESSCOM.

The MMEA, for example, has since added more capable blue-water assets to replace its ageing heritage assets handed down from other agencies such as the Royal Customs Department, Royal Malaysian Police, Royal Malaysian Navy and the Fisheries Department.

The heritage assets’ average age was 30 years old and consisted mainly of coastal and brown-water assets.

ESSCOM has also added more assets such as surface-search radar, build installations for security units to operate from, to combat border incursions by illegal immigrants as well as by terrorist groups.

The Malaysian Civil Defence Force, or Angkatan Pertahanan Awam Malaysia (APM), has gone on a massive recruitment drive and assets procurement.

With a permanent force of only 3,000 there is not enough of them to go around in the case of an emergency or disaster.

It was reported that in Kuala Kangsar, there is only one permanent APM staff who is the ambulance driver when responding to an accident or other emergency medical cases, and is also the coxswain for the rescue boat when there are floods.

Surely the men and women of the agencies I mentioned above also deserve a raise when due.

Then there is of course, the Parliament.

The budget for Parliament also comes under the Prime Minister’s Department, in case Jomo is not aware of that.

Operating costs, staffing costs, allowances and pensions for current and former members of Parliament come from the Prime Minister’s Department.

So, when your MP walks out of a debate or does not attend bills voting sessions, don’t ask why is the government spending unnecessarily.

Ask why is the government paying for your lazy MP. Ask also why was your MP a one-term MP, and why is there so many one-term MPs especially from the Opposition.

And please also ask why is the government still spending on the secretariats of two former Prime Ministers – one who made so much noise when the government reduced the budget allocated for his staff, while he goes around running down the current government as well as the country.

Debts? Can’t We Pay?

Jomo, described as a prominent economist in the article, also mentioned about the fast-rising government debt which is now hitting almost RM700 billion (USD178 billion).

He said that the mega-projects that are now being constructed have added to the burden of debt that Malaysia has to shoulder.

While it is true that our debt is actually at RM687 billion, domestic debt is at RM492 billion (or 72 percent of total debt) while external debt is at RM195 billion (28 percent).

Our International reserves stand at RM417 billion.  I am looking at the latest report issued last week by the Bank Negara Malaysia.

But you do not just look at debt to know how we are performing economically.

Our debt to GDP ratio is at 53.2 percent, down from 54.5 percent the previous year, year-on-year.

So Jomo is off the target when he said the government is not addressing its debt issue.

Market consensus of our GDP expansion was at 5.4 percent.  Yet, it was at 6.2 percent year-on-year in September 2017, making our economy one of the most robust expanding economy.

Private consumption increased by 7.2 percent in the same reporting period where Malaysian spend mostly on food, communication, housing and facilities.

So how is that possible if the economy is not doing well?  Our exports grew by 12 percent; manufacturing sector rose 7 percent; services rose 6.6 percent; construction 6.1 percent.

At 53.2 percent debt to GDP ratio, it means that the government is still able to pay off its debts.

As a comparison, Japan’s debt to GDP ratio is 250 percent; the US is at 106 percent; France is at 96 percent while the UK is at 89 percent.

Among ASEAN nations, Singapore has the highest debt to GDP ratio which is at 112 percent.  Any country that has its debt to GDP ratio exceeding 100 percent means that it has debts more than it could make money.

But do we hear anyone from the countries mentioned above complain?

Epilogue

Every day we hear of ill-informed Malaysians complaining that our country is in such huge debt that the country will soon be in ruins.

Selective statements by the likes of Jomo is not helping the situation. And it certainly does not help especially when his statement was intentionally directed at the Prime Minister’s Office, and not the Prime Minister’s Department where the budget was given.

Perhaps, it was malice on his part to intentionally and falsely painting the wrong picture, to make the Prime Minister look bad.

Or perhaps it was the editor of the said portal who spun Jomo’s statement to make it look as if Jomo implied that it was the PMO instead of the PMD.

Either way, Jomo’s intentional or unintentional non-mention of the debt-to-GDP ratio shows the bad blood he has with the Najib administration.

A true economist would give the WHOLE picture.

Jomo is not.

(This article was first published by The Mole)

Pantywaist

Pakatan Cry Babies
Barely a few hours after Najib Razak’s announcing of the budget for 2018, the DAP came up with the above graphic to inform the people that (as usual) Najib Razak’s budget is a copycat budget.

But is it?

It must be remembered that the budget announced by Najib Razak will be implemented nationwide whereas the “Pakatan budget” mentioned in the graphic above is a pick-and-choose budget that only one has been implemented in just one state administered by Pakatan, and not a nationwide solution.

Abolish All Tolls

The Barisan Nasional (BN) -led government announced that from 1 January 2018, tolls at four locations, actually, will be abolished.  They are the Batu Tiga toll on the Federal Highway, the Sungai Rasau toll near Klang that is also on the Federal Highway, the EDL highway toll in Johor Bahru as well as the Bukit Kayu Hitam toll in Kedah.

Pakatan Harapan proposed to abolish all toll collections.  But it has not explained how they plan to compensate in the region of billions to the toll concessionaires for all the money that they have put into the highways they operate and loss of future earnings.

Furthermore, Pakatan promised since before GE12 to abolish toll collection at the Sungai Nyior toll plaza in Pulau Pinang but has not done so to-date.

Pakatan’s de facto a third of a leader, Anwar Ibrahim, had in fact made a promise not too long ago to not allow toll charges to be increased on highways they have shares in, namely, the LDP, KESAS and SPRINT.  So far they have done nothing. If they cannot even control the highways that they have substantial shares in how can we hope for them to abolish all tolls?

Anwar’s broken promise
Pakatan’s alternative budget is also unreliable when it comes to the abolishment of toll on highways.  Azmin Ali as the Menteri Besar of Selangor admitted that it was not going to be easy for them to reduce tolls let alone abolish them on highways where the state government has shares in.

Azmin Ali’s admission that it is difficult to reduce toll rates on highways Selangor has shares in
But instead of reducing or abolishing tolls, Azmin Ali introduced three new tolled highways namely the Sungai Besi-Ulu Klang Elevated Expressway (SUKE), the East Klang Valley Expressway (EKVE), and the Damansara-Shah Alam Elevated Expressway (DASH).  This is a total of 89 kilometres of new tolled highways offered by the Pakatan government versus the 2,083 kilometres  toll-free Pan Borneo Highway offered by the Barisan Nasional government.

Instead of reducing or scrapping tolls, Azmin introduced three more tolled highways in Selangor
So, who is Pakatan trying to kid when it says it wants to abolish tolls on highways?  What funds do they plan to use to acquire the concessions from concessionaires?  The government is able to abolish tolls at four locations because three of them are under PLUS which is 100 percent government-owned through UEM and EPF, and one under MRCB which has Bank Rakyat and Tabung Haji, both are government entities, as shareholders.

Another puzzling behaviour of the Pakatan is that while it claims that it will abolish tolls in total, or in Selangor or Sungai Nyior only, or just reduce the rates, it has been proven that they are just a bag filled with hot air. It has been almost a decade since their coming into power in Pulau Pinang and Selangor yet they have nothing to show. So when the BN government abolishes tolls at four locations, the reaction from them should be one of sheer happiness. Yet they seem to be otherwise. Why?

One example is Azmin’s communications director Yin Shao Loong who is unaware that the concession period for the Batu Tiga toll was extended to 2038 and not 2018.

Had the Batu Tiga toll concession period been extended, the rate users would be paying according to the original agreement signed during Mahathir’s period is RM2.40 instead of the RM1.10 users are enjoying now.

In a way, the recent offer by Maju Holdings Sdn Bhd to buy the PLUS Expressway from UEM and EPF and not increase toll rates on the highway for 20 years may have triggered the government’s decision to abolish toll collection at those four highways.  I still hope that the PM could bring all the relevant parties together to discuss the proposal as it surely benefits the rakyat if feasible.

Abolishing the GST

Prior to the introduction of the 6-percent Goods & Services Tax (GST), business owners were charged the 16-percent Sales & Services Tax (SST).  The Sales Tax was a federal consumption tax imposed on a wide variety of goods, and governed by the Sales Tax Act 1972. The Service Tax, also a federal consumption tax, was levied on customers who consumed certain taxable services, and was governed by the Service Tax Act 1975.

GST versus SST (courtesy of Bloomberg BNA)
The SST was a single stage of consumption tax where businesses cannot recover the tax paid on their purchases. This tax will be treated as a cost to business.  However, it was not a transparent form of taxation as many business owners fail to declare their taxes through transfer pricing.  The GST introduces transparency, curbs the inefficiencies, tax-payment and misappropriation issues  of the SST.

This incurred the wrath of big business owners as they can no longer hide actual sales figures to avoid being taxed.

As opposed to the SST where every single item is taxed 16 percent, household items such as but not limited to sugar, flour, cooking oil, vegetables, fish, meat, poultry and services such as healthcare, education, public transport, housing and agriculture land are exempted from the GST.  If there is a spike in the prices of these items, it is the business owners that are to be blamed for marking up prices, and consumers can report them to the KPDNKK.

It is the efficient way to collect tax from businesses that has helped the government to find an alternative form of income when price of oil have gone down tremendously.

Pakatan wants to either revert back to the SST system but has not mentioned how it plans to make up for the loss of income since oil prices cannot be depended upon, or zero-rate everything as per its alternative budget if it decides to keep the GST system, with the option to increase the rates later.

Again, Pakatan is not being transparent to the masses.

120-Day Maternity Leave versus 90-Day Maternity Leave

There are two aspects to look at when talking about maternity leaves.  First, on the employers’ side – a worker that is unable to perform her duty taxes the company as she receives full pay during her absence, and other workers have to double up to do her work.  Second, going by the concept of ‘iddah of a divorced woman – the waiting period is three menstrual cycles or three months.  I did not use the example of a widow’s waiting period because that includes a period to sufficiently overcome a huge part of grief.

Let us compare with other Muslims countries:

Bangladesh – 112 days: 8 weeks (56 days) before delivery and 8 weeks (56 days) after delivery.

Indonesia – 3 months (90 days)

Pakistan – 90 days (45 before delivery and 45 after)

Oman – 100 days (50 days before and 50 days after)

Qatar – 50 days

Saudi Arabia – 70 days

Syria – 50 days

UAE – 45 days

Yemen – 60 days

Pakatan wants to implement 120 days maternity leave, but evidence shows that after introducing a 90-day maternity leave for Selangor’s civil servants, only 30 employees have actually utilised the 90-day leave in full.

Not many took up the 90-day maternity leave provided by the Selangor state government

I guess 90 days about stretches the limit, especially for employers providing 100 percent pay during maternity leave.

TAWAS versus ADAM50

Tabung Warisan Selangor (TAWAS) is a RM100 one-off gift for every child born in Selangor with the hope of accumulating RM1,500 when they are eligible to withdraw the money when they turn 18.  Amanah Dana Anak Malaysia 2050 (ADAM50) is a 200-unit gift in the form of a trust fund for 2.8 million Malaysian babies born from 1 January 2018 to 31 December 2022. The 200 units will be credited automatically in the unit trust funds managed by Amanah Saham Nasional Bhd after the registration process is completed by their parents or guardian.

TAWAS was launched in 2008 as part of fulfilling Pakatan Rakyat Selangor’s manifesto promise. Between 2008 and 2011, RM588,391 was spent on advertising and promotion for TAWAS but less than 20 percent of newborns (60,972 out of 313,706) in Selangor were registered by the end of 2011.

The Selangor state government had no choice but to extend the registration deadline to allow for more participants but as at 22 July 2014, only 159,953 registration was collected.  The total number of live childbirths in Selangor was 421,652 by the end of 2012. By end of August 2017, TAWAS only managed to get 280,568 registrations.

TAWAS started off with funds amounting to RM13.5 million but the state government has had to spend RM22.87 million annually on TAWAS despite getting only 19.4 percent registration.  Why is there a need to spend so much on so few participants?

The Auditor-General reported that TAWAS, which was formed under the Menteri Besar Selangor (Pemerbadanan) through Yayasan Warisan Anak Selangor (YAWAS) failed to submit documents of issuance of Fixed Deposit Certificates (SST) between YAWAS and AmBank to the auditors.

There is no standard operating procedures (SOP) to fix a deadline for the issuance of SST to the participants from the date the registration was made or was approved. Audit checks found that there is no record of actual of issuance and receipt of actual SST to and from participants.

The TAWAS system only provides information on SST that had been prepared by AmBank, furthermore even YAWAS does not have detailed records on the interests received for each of the SST issued,” the report added.

ADAM50 is managed by Perbadanan Nasional Berhad (PNB) which has been managing funds such as Amanah Saham Nasional, Amanah Saham Bumiputra and Amanah Saham Malaysia.  The 200 incentive units and all dividends received on this initial amount of ADAM50 can only be redeemed when the child reaches 18 years of age.

Pakatan cannot even handle a far smaller fund efficiently and it wants to compare itself to a single corporation that handles funds in excess of RM265 billion.  Where has all the millions of Ringgits pumped into TAWAS gone to despite not getting the number of participants it had envisaged in 2008?

The Return of Petrol Subsidies

I won’t even go there. Everyone knows the removal of subsidies is so that it could be chanelled to the target groups instead of providing everyone, even foreigners, with subsidised petrol.

The Pakatan budget plans to subsidise only cars and motorcycles below 1,000cc. Only the Perodua Kancil and Perodua Viva would fit into the given category. How would the petrol pump know what cars are below 1,000cc and which ones are 1,000cc and above?

Other Pakatan Budget Jokes

While the BN government strives to lower taxes Pakatan’s alternative budget plans to introduce, on top of the 16 percent SST, an Inheritance Tax, Capital Gains Tax and increase Personal Income Tax to make up for the loss of income through the abolishment of the GST. Yet the pantywaist Pakatan have the cheek to cry foul and claim that the BN’s budget is oppressive.

So I will leave it up to you to decide whom to choose come GE14.

Defence: Challenging Times Ahead

The 18th Chief of RMAF flanked by his Deputy and Commanders at a press conference after delivering his Prime Directives
The 18th Chief of RMAF flanked by his Deputy and Commanders at a press conference after delivering his Prime Directives

I want all of us to work together to see how best can we meet our objectives even with budget constraints,” said the 18th Chief of the Royal Malaysian Air Force (RMAF), General Dato’ Sri Hj Affendi bin Buang TUDM to the officers, men and women of the RMAF after delivering his Prime Directives as the new Chief of RMAF.

General Affendi did not mince words when speaking to the audience about the tough times that the RMAF will face. “We must ensure that our assets and people are prepared and competent to undertake these challenges without compromising the integrity of the sovereignty of our nation, and at the same time be able to service the general population in times of need,” he added.

General Affendi thanked his predecessor General Tan Sri Dato’ Sri Roslan bin Saad TUDM who has just retired for leaving a solid foundation for the former to work on to ensure that the RMAF remains relevant to the nation.

General Affendi then outlined the focus areas of his Prime Directive – Preparedness, Effective Maintenance Culture, Magnificent Human Capital Development, Technological Migration, Excellent Management Culture and Welfare.

Stressing especially on human capital development General Affendi said that trained next generation air force’s (AF-NG) personnel need to possess traits like intelligence, analytical, robust, IT-savvy, forward thinking and innovative. For this to be achieved, competency-based training and assessment (CBTA) will be given to all levels of personnel.

Speaking to reporters after the ceremony General Affendi stressed that CBTA will complement real-life competency requirements, especially for the front-line pilots whose skills need of certain competency-level.

The budget constraints will no doubt hamper us from carrying out many things. However, the RMAF has been thinking outside the box and have been adapting to the situation by emphasising on technology such as the use of simulators to complement actual flying for the pilots. This would allow us to maintain our levels of skills and readiness even with a dwindling budget,” he said.

At no time will the RMAF allow for anything that would cause to undermine the sovereignty of the nation. That is the reason we exist and that is our main objective,” he said in reply to questions on budget constraints as well as the development in the South China Sea.

On the question of the floods in the East Coast of the Peninsular, General Affendi said the RMAF is closely monitoring the developments. As of yesterday, a EC-725 helicopter has been deployed to the Gong Kedak Airbase to assist with flood relief operations if needed.  More helicopters will be deployed depending on how the situation develops.

RMAF EC-725 helicopter in action during the floods in the East Coast in 2014
RMAF EC-725 helicopter in action during the floods in the East Coast in 2014

On LIMA ’17, General Affendi said that the planning had commenced a year ago and the RMAF is committed towards providing the best air show.  Foreign air display teams have been invited. However, there is no confirmation from any of the teams invited as of today.

On the question of assets procurement General Affendi stressed that although there is a budget constraint the Government has allowed the RMAF to plan for assets procurement including the Multi-Role Combat Aircraft.  These assets would be procured once the budget is there.

Earlier, a handing-over and taking-over ceremony took place for the Air Support Commander and Air Operations Commander posts.  Lieutenant-General Dato Paduka Wan Normazlan bin Che Jaafar TUDM took over the Air Support Commander post from Lieutenant-General Dato’ Hj Abd Mutalib bin Datuk Hj Ab Wahab TUDM who in turn took over the Air Operations Commander post from Lieutenant-General Dato’ Sri Ackbal bin Hj Abdul Samad TUDM who is now the Deputy Chief of the RMAF.

General Dato’ Sri Hj Affendi bin Buang TUDM who is also the first RMAF Chief from Sarawak was given a guard of honour comprising of three RMAF officers and 104 other ranks from the RMAF Regiment led by Major Mohd Syafik bin Saadun TUDM.

General Affendi saluting the RMAF colour
General Affendi saluting the RMAF Regiment’s colour

Laughter Is The Best Medicine

Ignorant? Stupid? Or agent provocateur?
My late brother underwent a brain surgery in Sydney four years ago this month because the congenital condition called arteriovenous malformation was the largest any neurosurgeon had ever seen here. I was there for about two weeks to encourage his post-surgery progress.

One morning as I walked from the hotel across the street to the hospital I saw a man, evidently recovering from a keyhole prostate surgery standing outside the hospital building smoking a cigarette. He was from Ireland and was in Sydney for a holiday when he had to undergo an immediate surgery.

He asked me what I was doing there and where am I from. When he heard the name Malaysia his eyes widened and said, “Good God! I would have gone to Malaysia for this surgery if I could. It costs a bomb here. My sister met an accident in Malaysia and was in a government hospital to undergo corrective surgeries and it was dirt cheap and good too!

It costs RM1.00 for a person seeking outpatient treatment to see a doctor, and RM5.00 to see a specialist. The medicines are given for free. Surgeries would cost a bit more. My daughter underwent an appendectomy and that cost me less than RM100.00. No doubt she had to be in an open Class 3 ward but the pre and post surgery care was better than in most of the private hospitals I have been admitted to.

A foreigner would have to pay a lot more. Even then it would still be cheaper than seeking treatment at a private hospital in Malaysia. My former maid fell and broke her forearm and I was forewarned that it would cost me a lot to send her for treatment at a government hospital. It cost me about RM1,200 if my memory serves me right to have her undergo surgery to have her broken bone screwed into place.

The Full Paying Patient is a program that allows someone who could afford such luxury, or has a good medical insurance scheme, to obtain virtually personal medical care at a government hospital at a very competitive price. Not only that, if you or those close to you suffer from cancer, there is a National Cancer Institute that provides treatment at very affordable price.

Among other initiatives that have been taken by the government is providing Human Papillomavirus (HPv) vaccination to 13-year old schoolgirls and young women nationwide for free. Mind you, each injection costs RM600.00! And Malaysia is among the first countries in this region to implement such a program.

I am also baffled by complaints by fellow veteran servicemen about the lifetime allowances given to athletes who excelled during the Olympics and Paralympics in Rio de Janeiro recently. What the veterans never realise is that apart from the monthly pension that they receive (for those who served until pensionable age) the 85,000 veterans receive free medical care for the rest of their life and that definitely costs more than the RM3,000 that is given to less than twenty athletes. Imagine the cost the government has to fork out as a token of appreciation for services rendered.

In the latest 2017 Budget announced by Prime Minister Najib Razak today the government continues to put importance to health of the veteran servicemen and the rakyat‘s. RM55 million have also been allocated to help veterans handicapped during the counter-insurgency periods. RM25 billion have been allocated for the upgrading of hospitals and government clinics, provision of equipment for cardiology treatment, and the operation of Klinik 1Malaysia, mobile Klinik 1Malaysia, government clinics and also rural government clinics.


On top of that RM110 million have been allocated to open up private haemodialysis centres and to assist almost 10,000 people who cannot afford medical care.


Now who says that the government does not care for the well-being of the rakyat? A certain nonagenaric has-been politician even said the government has no money to help the rakyat. Probably due to his age he has forgotten that his medical bills for the repeated treatments at the National Heart Institute is all paid for by the government of Malaysia led by Najib Razak.

As the Malay saying goes: “Kufur Nikmat.” Which is why I often laugh at him nowadays.