Why I’m not fond of Rafizi’s plan

The idea of abolishing the PTPTN seems noble, but the execution doesn't seem to add up.

COMMENT

Yes, I am talking about the dissolvement of PTPTN and the free education plan that PKR strategies director Razifi Ramli talked about during the recent debate with Umno Youth chief Khairy Jamaluddin.

Now the reason why I call it Rafizi’s plan is because it seems that this whole gig is a one-man show, seeing how silent the other parties are when it comes to this gargantuan task.

With DAP more capitalistic than socialistic these days and PAS which seems to be more interested in muzakarah more than anything elese, it seems like, or at least the perception is that Rafizi had to came out with a last-minute plan to be somewhat credible to support a statement made by his boss, the de facto leader of PKR who more often than not regurgitates random promises in the euphoria of a political ceramah.

Now this assumption is not made without basis seeing how this plan was never mentioned in the Buku Jingga as Khairy pointed out. Nonetheless I commend Rafizi for at least trying to present a sort of mechanism rather than simply promising the moon and stars as his boss often did.

Now Rafizi argued the way things are going and looking at the fact by which the amount of debt a student had to carry upon graduation and seeing how this number was growing, there needed to be a revamp in the education funding mechanism.

He argued how other countries were facing financial meltdowns due to the weight of debt carried by their citizens and the inability for them to service these loans, seeing how the education debt was growing day by day there should come a time when the debt burden was so big the market would default hence creating a meltdown, seeing that perhaps in the near future we might encounter something similar to the subprime mortgage crisis which the US faced.

To avoid this, it seems, was to free the current generation from the evil clutches of loans. The government or in this case the Pakatan Rakyat government would introduce free education, abolish all of the current and past debts and provide subsidies to the private education sector hence ensuring that students would not have a significant burden of debt once they graduated. After all, according to them, free education was the right of every Malaysian.

It seems noble but…

It seems noble but somehow it just don’t seem to fit. Let me put this in another perspective. Let’s just say a young man would like to acquire a car so that he could commute around town. To do this he would have to take a loan with a bank and repay it in installments of seven years.

But seven years is a long time and many things could happen in seven years, fearing that this young man might not be able to service this loan in the future and not wanting for him to carry such a big debt early in his life, it would be best if he could get the car for free, but as we know, nothing is free and someone would have to bear the cost of buying this car in cash and that’s usually the parents. Unless the parents are filthy rich people, do you think it’s wise for them to spend their life savings this way? Wouldn’t that impact the livelihood of the whole family?

In this case, the government is the parents and the savings or the source of the money would be the government coffers which would directly impact the economy. So when you spend a large amount of money to avoid a crisis that might happen in the future, perhaps rather than solving it, all you are doing was to ensure a financial crisis now seeing how you callously spend a large amount of your budget to pay a large debt in one go.

Even worse than the analogy I just gave, at least in the case of buying a car it is a one time purchase, on the other hand this free education and massive subsidies is an ongoing thing and seeing how our population is growing plus the effects of inflation, the cost that the government needed to bear would increase annually and wouldn’t this trigger an even bigger financial meltdown?

Subsidising private education

Then of course we have the plan to subsidise private institution fees so that it would match those in the public institutions. Now for a moment put yourselves in the shoes of the owner of a private institution of higher learning. Say you’re the owner of a private college, seeing at how your primary goal was to make profit (after all this is a business venture) and now seeing that the government was subsidising most of your fees making it more affordable to the masses, wouldn’t it be logical to increase the amount of student intakes each semester?

After all it’s affordable and since the government was bearing most of the cost, wouldn’t it be great to have more intakes which would directly increase my profit. I would find creative ways to introduce new courses and faculties and would even lobby the idea that by doing so I am contributing to the nation by giving opportunities to more Malaysians to tertiary education.

What does this mean then? Well to put it plainly, the government would then have to increase the amount of money spent on subsidising the industry annually hence increase in cost as time goes by, market mechanisms and correction aren’t in place because the government had intervened in this way.

Then of course there’s the case of merit and productivity, the current mechanism ensures that students who work hard, those who do well would be rewarded by having their loans turned into scholarships. Now if everyone was promised and assured of a free education, where is the motivation to get a first class honours upon graduation, what’s the point of studying hard in school when every other average bloke was ensured of a free ride?

Take for example this, who would want to take a JPA medical scholarship and be bonded to work for the government for eight years when you get free education which was similar to a scholarship and without having to be bonded to anyone. You might as well study at a local university, get that medical degree and then migrate to a developing country, getting higher pay in a higher currency. And the only way for us to fill in the shortage is to offer higher salaries to not only match the international market demand but to also hedge the difference in currency value.

Rafizi pointed out that as an accountant he had calculated all this and that the numbers that he came to conclude – Malaysia could undertake such a project. However, I find that the numbers seem to be more convenient rather than exact, especially since most of the numbers were based upon assumptions and projections.

In many cases, the shortage of funds or the retort that he gave were along the lines of “When we take over, we would get rid of corruption hence the government would save gazillion of dollars hence we could afford all this.”

The problem was that when it comes to politicians, words and promises aren’t really that solid, seeing at how his de facto leader seemed to forget all about Sept 16 and the throngs of promises that went down the drain. Action speaks louder than words and since having control over the state government surely you could prove to the rakyat your worthiness.

Selangor should be able to offer free education via Unisel a university controlled by the state government in terms of policies, budget and even the management. If you keep throwing excuses and blaming the previous government for your inability to prove your point, then we could argue that you might do the same thing when you take over the federal government, that you would then scrap this whole grandiose plan of yours and simply put the blame on BN.

Action carries a lot of weight and as Khairy pointed out, if you can’t even keep your promise of providing free kindergarten education when taking over Selangor, what makes you think people are going to buy your promises this time around.

Zaidel Baharuddin is Mr Right, Mr Right Wing that is, electronics engineer by day writer by night, Frank Sinatra fanboy all day long, catch me at WirawanWeb.com, lipassepi.blogspot.com or follow me on twitter via @Sinatra_Z. He is a FMT columnist.