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Saturday, September 29, 2012

Qucik glance BN budget vs PR budget


It has been number crunching nerd's dream week as both Barisan Nasional administration and Pakatan Rakyat shadow administration unveiled their respective budget within a day between them.
There is so much to talk about when one put both of them together. I limit myself for the moment to comment on Vision, Cost of Living and Crime and Safety aspects.

versus

Vision:
Pakatan Rakyar:
3 strategic thrust to combat deteriorating standard of living of all Malaysians, combating rampant corruption and patronage
1)      Increasing disposal income
2)      Building Entrepreneur class and promoting constructive competition
3)      A just society with dignity and pride
BN:
Focus on the expected short term goodies and no structural transformation in sight despite Economic Transformation being the daily rallying call

BN would rely on the tax break such as
•Three-year tax holiday for tourism companies handing 750 foreign tourists and 1,500 local tourists.
•10-year tax holiday for Tun Razak Exchange companies, expected to attract 250 companies related to finance sector 

So much for 1Malaysia concept - special tax rate for finance industry major players converging in a piece of real estate.
It is proven that tax break alone is not enough to attract foreign investment and talent. Otherwise Singapore would not have beaten Malaysia to become the financial hub of South East Asia. Whereas constructive competition promoted by Pakatan Rakyat would attract foreign investment as evidenced by the new vibrancy in Penang since 2008
On the contrary, PR’s budget advocate for removing rent seekers, lower cost of business and living by addressing excessive fats in toll collection, broad band expenses, water and electricity facilities.
PR’s budget exhibited much more apparent transformation and structural reform signals compared to BN. The existing concessionaires no doubt represented a major obstacle for reform and transformation of substance.

Cost of living
BN continue to mimic PR’s initial concrete gesture of returning excess cash to the needy (such as Penang’s RM100 gift to elders). The difference is that BN finance the handout by deficit budget whereas PR distributes from surpluses.
BN has upped the competition with more handouts such as:
•One-off payment of RM1,000 for army veterans who served for at least 21 years, where 224,000 will qualify.
•RM200 rebate for smart phone purchase for those aged 21 to 30 years.
•Half price Kommuter fares for those earning less than RM3,000 a month.
• RM500 cash for households with combined income of RM3,000 or less
•RM250 cash for unmarried individuals who are 21 and above and earning RM2,000 and below
•One-off payment of RM100 for each primary and secondary school student
•One and a half month civil servants bonus, disbursed in three months.
The above one off goodies is merely pre-GE gig. A water tap which can be turned on and off according to the whims and fancies of a person who can call or postponed GE at spur of a moment.

PR has moved beyond that. It’s budget advocate raising income for all Malaysians. Increased income would free the people from depending too much on hand outs and work towards social justice and more equitable share of wealth of nation.

Its aim is more long term and addresses structural weakness that trap Malaysians either in a mid-income trap or non-income tax paying existence level (soon to be addressed by BN via all encompassing GST once it retains federal government ship)

PR’s budget calls for universal minimum wages of RM1,100 across the board. This is superior to RM500 once or twice every 50 years.  Senior citizens will get annual bonus of RM1,000; probably diverted from payments to rent seekers into the hands of our parents and grandparents who contributed their best years but now trapped in cost of living levels unimagined in their heydays.
PR also look to free Malaysians from monopolies created by BN that distort cost of livings. For cost of food, PR seeks to dismantle Bernas and encourage state governments adjust land policies to ensure land for agriculture purposes.
PR identified 4 key public utilities that needs to be restructured to lower the cost of services to the nation’s economy and people i.e. electricity generated by IPPs, water concessions, toll concessions and broadband services.
RM3.9billion is set aside to remove the toll scourge from the rakyat while Unfair Public Contracts Act would be enacted and an independent Public Contracts Commission would be formed to review lopsided concessions and agreements that are deemed to be against public interest.
Once the 4 areas are addressed, only then PR would look at the fuel subsidy issue.
The structured and rational approach laid out by PR completely refutes BN’s accusation that PR has no vision to govern. Existing structures that erode the people’s purchasing power and alternatives will be abolished.


Safety and Crime
Apart from massaged statistics and advertisements, BN’s budget professed the following tools to tackle crime:
•RM591 million for crime prevention
•1,000 motorcycles for the police neighbourhood patrol unit.
•Additional 10,000 volunteer police
•496 CCTV in 25 local councils
•RM10,000 grants for neighbourhood associations for patrols
•New uniforms for 300,000 Rela members
•Incentives for companies that install security systems
•Additional 150 staff for Malaysian Anti-Corruption Commission (MACC)
The key points are more money being spent (going by the usual trend, another crony enrichment scheme) and instead of utilizing existing police forces to the fullest, the people are asked to come forward as volunteer police, neighbourhood association patrols and Rela members. That is why there is greater police presence during Bersih peace assemblies, candle vigils etc compared to known crime hotspots. 

PR’s budget stated that in 2005, only 24.9% out of 6,661 Police Criminal Investigation Department (CID) was investigating officers (IO), numbering at 1,660. In contrast, the Special Branch had 6,026 staff of which 59.4% or 3,578 were IOs. In other words, the number of police officers assigned to investigate opposition figures, NGOs, civil activists are twice the number of those looking at rape, robbery, murder and other criminal offences.

PR advocate restructuring of the PDRM by relocating police from administrative tasks to crime investigation and prevention role as well as re-tasking General Operation Force from combating insurgency (long since ended) to constabulary presence in crime hotspot. This amounts to better utilisation of existing resources.

Unlike BN who intend on increasing RELA members, PR is of the view that only qualified and professional police should be entrusted with this role. By the same token, it justifies tax payers’ money whereas BN require us to pay more taxes and contribute more as RELA, volunteer police or neighbourhood association patrols
The above observation is just a brief snapshot impression of the respective budget. One is long on the usual deficits funded initiatives with no serious attempt to address its hard core over spending addiction, and it is worth noting that the annual Auditor General’s report is not released until after the budget is released. Incomplete information is presented for debating.
The other side of the political divide however, provided a clear and practical alternate to reform with substance and real intention.
My vote is casted

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