'Slashing car prices will cause unemployment'

Malay Vehicle Importers and Traders Association (Pekema) chief Zainuddin Abdul Rahman has said that Pakatan Rakyat's plan to phase out excise duty on cars, should it come to federal power, will result in mass employment.

This, he said in a Berita Harian report today, is because those working for local automakers will lose their jobs as they fall behind foreign automakers.

"It will contribute to the rise in unemployment as the local automotive industry will not be able to compete if the plan is executed abruptly," he was quoted as saying.

He added that this would also result in lost of revenue for the country and impede aspirations to become a developed nation by 2020.

"With the abolition (of excise duty on cars), the country will lose around RM7 billion a year which could have been used to upgrade infrastructure, education and assisting low income groups," he was quoted as saying.

PKR strategy director Rafizi Ramli (right) who had first announced the plan had argued that the local car industry would still have a competitive edge as all car prices would be reduced proportionatelyonce the excise duty is done away.

He had also contended that Prime Minister's Department's increase in expenditure since former premier Abdullah Ahmad Badawi's time coupled with the pre-election goodies handed out for the first six months of this year, far exceeded the cost to abolish the excise duty.