Subsidy cuts for the rakyat, but not the IPPs

'If Najib is sincere in ameliorating our economic woes by cutting down subsidies, why is he not doing the same to the crony-infested IPP industry?'

Najib defends move to slash subsidies

BornInM'sia: Only two million workers pay income tax? This is because of BN policies that has driven away a lot of people with high earning capacity to other countries to be substituted with low-earning labourers.

The nation's talents were made to feel unwanted in this country - look at the recent Public Service Department scholarship fiasco that repeats year after year.

At the same time, financial capital has also been either driven away or siphoned off to other countries. Without sufficient new investments to create high income employment, how do you expect to increase the number of taxable workers? The problem is created by you and BN.

SusahKes: Two million taxpayers are subsidising the majority? Then what about Petronas' RM19 billion in profits foregone for selling gas at below market price to the independent power producers (IPPs)?

Najib, you have also failed to mention that these two million taxpayers are also burdened with subsidising Proton. What about the bailouts using Petronas and EPF money?

In a truly market-run economy, removing subsidies would be the correct move. But does Malaysia have such an economy? When you don't have open tenders, when you don't open your IPP contracts to scrutiny, when you continue to allow rent-seekers, when you waste public funds by building white elephants, then what market economy are you talking about?

Let's be honest - when the Umno government provided subsidies, the raison d'etre was not so much to help the poor but to hide Umno's inefficiencies and looting. Now that the shit has hit the fan, you want to cajole us with economic theories. By the way, in my books, the only economic theory I can assign to your name is "I help you, you help me".

Onyourtoes: Dear PM, the unsustainability of Malaysia's fiscal position is not due to subsidies alone. The size of government is too big compared to our GDP, and the government wastes too much on unproductive projects/programmes.

Subsidies are easy to introduce but difficult to remove. So your government should have been more circumspect.

Subsidies come about because the government thinks it is smart to control the market. You introduce all kinds of price controls and import mechanisms which create lots of distortions in the market. You think you can control it but the reality is you can't.

The subsidies that you have provided have largely gone into waste. For example, you provide fuel subsidy for fishermen. But the subsidy is abused and lost through arbitrage and corruption. But now if you remove the fuel subsidy for the fishermen, the price of fish will go up even though the subsidised fuel was never used to catch fish in the first place. Can you see the irony of subsidies now?

Don't control the economy too much. Your officers are not smart enough to do all these. Instead, make sure there is always enough competition in the market and the price will take care of itself. Again, I don't expect your officers in the Treasury, Domestic Trade and Consumer Affairs Ministry and 'Economic Plundering Unit' to understand what I am saying.

Quigonbond: I'm astounded Najib brought up the fact that two million taxpayers pay for the rest of Malaysians. Clearly, this demonstrates the failure of BN government to create a highly productive society.

Anyway, that's a non-sequitor argument as far as cutting subsidies to food items are concerned. It is not the taxpayers that Najib has to worry about, it is Petronas being required to sell gas to IPPs (independent power producers) on the cheap, letting the IPPs rake in billions of profit. Petronas could have made more money and paid more taxes, which the government can use to subsidise necessities.

There's no way that the IPPs, after making all these money, will channel the same amount of tax back to the government, as they would have, with their creative accounting, spun off their profits to other costs or park under some offshore jurisdictions which are not taxable.

Cala: Najib says something but do something else. The real trouble with Malaysia has to do with its adoption of a 'developmentalist state' paradigm in the last 40 years after the May 13, 1969 incident. But such a state-led economic development policy cannot continue forever, as to do so the economy will be captured by rent-seekers as happened in many Third World nations.

Two issues beg further discussion. First, if Najib is sincere in the way he wants us to believe that he is ameliorating Malaysia's economic woes by cutting down subsidies (through the TNB rate- hike), why is he not doing the same to crony-infested IPP industry?

Second, why is he ignoring the importance of resurrecting the much desecrated institutions (judiciary, civil service, police, etc) in order to strengthen institutional capacity for greater efficiency in the delivery of public goods?

Traj: In a true well-managed economy, subsidies should indeed be removed. But before we reach that stage, leakages, corruption, wasteful spending, white elephant projects and so on should be gotten rid off and a clean and trustworthy police, judiciary, MACC and Election Commission are put in place.

BN/Umno can never achieve any of the above. For 53 years, they have gotten used to sucking the nation's blood. Najib is all talk and no guts. Either his wife, Rosmah Mansor, has her hands around his neck, or at the other times, it is the Umno warlords. He is surrounded by a bunch of incompetent ministers who make me feel ashamed with their incoherent arguments.

Nazri Abdul Aziz, Hishammuddin Hussein, Muhyiddin Yassin, Rais Yatim; my God, Malaysia is doomed with this bunch of useless, brainless leaders. Najib, for his part, has become an expert in uttering the right words in public, but his actions are completely opposite and his intentions insincere.

Anonymous: Najib says avoid excessive expenditure. Why then build a new palace for the king and another 100-storey building, PKFZ, and so many other white elephants? What a hypocrite - he speaks one thing, and then does another.

StevenForMalaysia: Najib is the No 1 public funds waster. He throws away public money to organise a 'defend Putrajaya' youth rally, gives money here and there for votes, spends on mammoth projects to enrich himself and his cronies, and commits many countless sins.

And yet he still has the thick skin to advise others. - Malaysiakini