Gov’t giving money: What’s the deal?

What kind of government sends out the wrong social message in order to win itself popularity and support?

COMMENT

By Kee Thuan Chye

Speaking as a layman, I’m aghast that the government is giving out so much money these days, as if there’s lots more where it’s coming from and our country’s financial tomorrow is sound and secure.

When I look at other countries in the world that are facing hard economic times and consider that the global outlook for this year is cloudy, I’m amazed that our government is so spendthrift.

It has given, under its BR1M (Bantuan Rakyat 1Malaysia) exercise, RM500 to each household that earns a monthly income of RM3,000 or less.

It has given cash aid of RM100 to every schoolchild, from Year 1 to Form 5.

It has given book vouchers worth RM200 to every university, college, matriculation and Form 6 student.

The total bill arising from all these must be astronomical.

And these are just the straight-off cash handouts. There is also the newly launched Sara1M (Amanah Rakyat 1Malaysia) scheme open to investors whose household income is RM3,000 or less.

This is just another money-dispensing scheme in disguise. If you don’t have money to invest in it, you can take a full bank loan of RM5,000 to buy the maximum units allowed and still be guaranteed a return of RM50 a month.

This is made possible because the government guarantees each investment of RM5,000 a monthly dividend of RM134. If you use your own money, you get to keep the whole dividend. But if you take the full loan, you get to keep RM50 each month after paying the bank interest of RM84. This means that you don’t have to put in any money but you still get RM50 every month for doing nothing!

The government has given out RM100 million to the banks selected to hand out the loans. That RM100 million comes from the nation’s coffers, which means it is the people’s money.

Salary scheme for civil servants

Much, much more money will have to be forked out when the government’s proposed Public Service New Remuneration Scheme (SBPA) is eventually implemented. This will reward the country’s 1.4 million civil servants with a pay rise. As proposed, those below Grade 54 will receive increments of between 7% and 13%.

But those in the upper levels, from Superscale C and above, reportedly stand to get thousands of ringgit each in monthly increments. Way, way more than one could have imagined.

That is apparently why the Public Service Department (PSD) did not publicise the details of the SBPA on its website this time, unlike in previous exercises.

That is also why most of the civil servants are unhappy with the new scheme, and the government was prompted to delay its implementation for a few months to let Cuepacs (Congress of Unions of Employees in the Public and Civil Services) sort it out with the PSD. Under the current proposal, it seems some employees in the lower levels would be getting a pay rise of only RM10, while the disparity between the upper and lower levels is more than 1,000%.

Why does the government want to give the senior civil servants so much more money? While it may be understandable that the lower-income earners need assistance to cope with rising prices, it doesn’t make sense to give the high-income earners a bigger financial boost. Are they in need of assistance to sustain a richer lifestyle?

So what was initially intended as a plan to please the civil servants and make them think well of the Barisan Nasional (BN) government has turned out to be a problematic issue. A move calculated to win favour for BN has somewhat backfired.

[SBPA scheme was cancelled by Prime Minister Najib Tun Razak yesterday following a major opposition by the civil servants. They will now enjoy an improved version of the current Malaysian Remuneration Scheme (SSM).]

This might well show that attempts to gain the people’s support by giving them goodies are not always the most foolproof. They are at best merely populist, which means their effects are short-term.

Besides, even though the government drums it into the recipients that the handouts come from it – for instance, by making BR1M beneficiaries collect their RM500 directly from BN leaders and government officials – those who are not so easily duped are aware that the money actually comes from the rakyat.

After all, the money in the government’s treasury doesn’t come from the BN’s coffers but from taxes paid by the people. Even if the money comes from Petronas, it’s still the people’s money. That being so, the knowing recipients don’t feel obliged to vote for BN at the next general election.

Easy come, easy go

They also know that the money is meant for the country’s development, not for shoring up support for the ruling party. As it is, if Malaysians are to believe what Institute of Economic Research (MIER) Distinguished Fellow Mohd Ariff recently warned about the state of our economy, they might not feel that the government’s handouts are such a good idea.

According to Mohd Ariff, the government’s borrowings hit 53.1 per cent of the country’s GDP (Gross Domestic Product) in 2010, but its revenue is growing too slowly. As such, he feels that if the government continues to borrow more than it earns, our national debt will hit 100 per cent of our GDP by 2019.

It may be that the recent handouts did not depend on borrowings, and that the government had actual cash to spare, but it still has to be asked if the move was prudent.

Shouldn’t the cash have been saved for more important concerns and future rainy days?

And what about the values being propagated through giving people money without their having to do anything for it?

Look at the result. Some students, after getting the RM200 book vouchers, put them up for sale on Facebook! Easy come, easy go. There might also be private sales going on that we don’t hear about.

That’s the kind of mentality the government is instilling in Malaysians by giving them freebies. It bears parallels with the subsidy mentality that the government should instead be trying to change.

It is akin to the mentality that accepts and condones rent-seeking. It is the mentality that makes businessmen who obtain government projects easily, use the money that they are allocated to purchase things for their personal use rather than for the projects themselves. It is the mentality that produces NFCs – Non-productive Feckless Creatures.

This negative value has been extended to the young, to those as impressionable as children entering Year 1, who were each given RM100. This is insidious. They should instead be taught that nothing comes free, and that rewards come with hard work.

Seeing through the ulterior motives

What kind of government sends out the wrong social message in order to win itself popularity and support?

This is the kind of government that seems to only know how to use money unscrupulously. Just as it used money to get documentaries made to repair the country’s image and have them aired on the BBC (British Broadcasting Corporation).

Minister in the Prime Minister’s Office Nazri Aziz told Parliament last November that the government spent about RM90 million to “repair our image” and after that, Western leaders became more receptive to Prime Minister Najib Tun Razak.

That’s a lot of the people’s money being used over just three years (from 2007 to 2010) to win Western favour for Najib. If I’d had a say, I would have objected to that expenditure.

And now the worst of it is, the BBC has come out to apologise for airing these (and other) documentaries – because the company that made them, FBC Media, did not declare that it was paid money by its clients.

FBC made eight documentaries on Malaysia and was paid a whopping 17 million pounds by the Malaysian Government. With the BBC’s apology, Malaysia’s image has actually been tarnished. What repairing are we going to do next?

The lesson from this is that when a government uses money, especially the money of the people entrusted it by the people, it should use it morally and responsibly.

If it does not, it is not a government for the people. In which case, the people should see through its ulterior motives and stop giving it support.

Kee Thuan Chye is the author of the book “No More Bullshit, Please, We’re All Malaysians”, which is available in bookstores now. This article first appeared in the March 2012 issue of the Penang Monthly.