Saturday, 28 December 2013

Common Sense NOT Consultants/Advisors is badly needed by Ministers,MPs & Aduns

"The public needs to find the money to pay the increased tax. Obviously it would be easier if the percentage is low, or spread over a longer period"
Tun Dr. Mahathir

On the recent price hikes and possible toll hikes coming to greet us into 2014, here is a reminder to the clueless Najib BN Gomen AND the clueless state Gomens of PAS, PKR and DAP of the effects of these price hikes to the people of Malaysia, an excerpt from Tun M's awesome blog post:

..."11. Government often waste money because it is not too concerned about the returns on its expenditure in whatever form. For example has a contract been given to the best offered price – though not necessarily the lowest. Every year the Auditor General reports on wastage through improper procedures and carelessness. Usually not much is changed so as to benefit from the Auditor General’s criticism. There is no doubt that much money can be saved if the AG’s criticisms are taken seriously. Even changing procedures can reduce costs.
12. If the Government is interested in reducing the cost of governance, it can do so and perhaps quite substantially. For example it can reduce the cost of electricity by switching to LED for street lights. The savings would be more than 50%. The subsequent reduction in the amount of electricity to be generated will reduce subsidy on fuel for power. But this has not been done by Government. The initial cost may be high but the savings will mitigate this.
13. With regard to taxes, the effect of the increase should be studied very carefully. Is it really true that the percentage fixed cannot be changed. It must always be remembered that increases in tax must contribute towards increases in the cost of living, the cost of doing business, the reduction in profitability and for the Government reduction in corporate tax on profits. Once a long time ago the Government was losing tax on goods brought in by travellers to Singapore simply because it was difficult to determine whether the costly watches, pens and jewellery items were bought in Singapore or worn by traveller when he went to that tax-free country. The Government decided to remove taxes on luxury goods. As a result tax-free shops sprouted in Malaysia and the Government collected more through corporate tax from these shops than it ever collected in import duty.
14. In another instance the government reduced corporate tax gradually from 45% of profits to 26%. More business was done and the collection in corporate taxes increased tremendously. Another case is the tax-free incentives for investments. With this investments increased. Indirectly the government could collect from income tax on executives. The nasi lemak eaten by workers increase the businesses of the rice wholesalers and the Government will collect corporate tax from them.
15. The public needs to find the money to pay the increased tax. Obviously it would be easier if the percentage is low, or spread over a longer period.
16. If the percentage increase is really necessary, cannot it be introduced in stages. For example the increase in electricity charges is fixed at 15%. That is a big jump. It will upset the cost of production of goods which all use electricity, some at a high percentage. Contracts which had already been made will result in losses and this in turn will reduce corporate taxes on profits .
17. Cannot the increase be in stages eg. 6 % per year for 3 years or longer. The losses on current contracts would be minimised. Future contracts would take into consideration the increases. There would be time for “cost down” and increase in contract prices.
18. At 6% per year for 3 years the rate would increase by 18% eventually instead of 15% now. But a 6% increase in the second year would be on 106% of original price and in the 3rd year would be on approximately 113% of the original price, therefore more than 18%. If this is too high, the yearly rate of increase can be reduced to 5%.
19. Clearly the Government would be getting more than the 15% of the current price. It will not really lose anything despite the delays in the increases.
20. Yes, Government needs more money with the passage of time. But with due consideration for the cost to people and business, the Government would really examine the tax rates to be introduced. It will not hurt the Government too much but it will gain a lot of goodwill from people. They might even remember in the next election...."
I sure miss Dr. Mahathir as Prime Minister, those were the good old days, no demos, no talking nonsense about race, no talking nonsense about religion, no apartheid demands by Dong Zong to have only Mandarin speaking students and staff in Chinese vernacular schools, no UMNO leaders who are apologetic of their own race and religion. Yup, Those days, All of us just wanted Malaysia and Malaysians to succeed.

Nowadays we have a PM who thinks Consultants and Labs and his wife can solve problems for Malaysian and Malaysia. We also have two ex-convict who went on to become Chief Minister of Penang and another becoming a DAP appointed Leader of the Opposition, both are only interested to paint an ugly face of this blessed country. 

Too bad lah that when Tun Dr. Mahathir left the PM's office 10 years ago, he also too along with him 'Common Sense' thinking. 

10 years after his retirement as PM, I believe the grand old man at 88 years  has more Common Sense then all the present YAB, YB Ministers, YB MPs and YB ADUNs combined.

God bless Malaysia.

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