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Thursday, February 28, 2013

A manifesto that hoodwinks voters


http://www.nst.com.my/polopoly_fs/1.226485.1362065490!/image/image.jpg_gen/derivatives/landscape_454/image.jpgPeople in a peaceful rally against the Selangor government for failing to provide preschool allowance as promised in the 12th general election manifesto. Selangor menteri besar has stated that a manifesto is not a promise.

NOT COST-EFFECTIVE: It's baffling why Pakatan is insisting on emulating bankrupt countries

Tun Dr. Mahathir Mohamad, NST 
PAKATAN Rakyat has unveiled its manifesto.  It is all about reducing government revenues and increasing spending.
This is to be achieved by lowering taxes, reducing the number of taxpayers by raising tax-free allowances, doing away with tolls, and more.
On the other hand, the salary bill will be increased because of an increase in minimum wage, there will be free education for everyone and roads and highways will be built and maintained.
With 1.1 million employees, the government's salary bill is very big. By increasing the minimum wage to RM1,100, not only will those drawing less than the minimum wage get an increase but those earning more must also be given a wage increase to maintain their status as superiors to those below them.
The salary scales of all grades will have to be increased in order to do this. It is not about raising the salaries and wages of those earning below the minimum wage only. This will be in addition to the RM2 billion because of the recent rise of the minimum pay to RM900.
The cost of education will also increase by more than RM2 billion because of free education.
The repair and maintenance of highways will also run into several billions of ringgit.
Currently, the cost of petrol subsidies is about RM18 billion. If petrol prices were to be lowered, then several more billions of ringgit will have to be added to government subsidy.
On the other hand, revenues will decrease by several billions of ringgit with taxes lowered, the number of people paying taxes reduced and highways made toll-free.
Revenues will also decrease as higher wages for the business sector are bound to reduce profits as well as the taxes paid to the government. Some businesses may have to close down or move to other countries. There will be less investment, both foreign and domestic. And more unemployment.

At one time, the manufactured goods sold in Malaysia carried European brands. Today, they are almost all from Japan, Korea and China. Except for German cars, all the motor vehicles on the roads are from Asian countries.
For decades, the Europeans and Americans have been increasing wages and providing perks to their workers. The prices of their products increased accordingly and could not compete in the market. They lost the market.
But they keep increasing their high cost of living. Today, they are facing an irreversible financial crisis. Greece, Spain, Portugal and even Italy are on the verge of bankruptcy or have become bankrupt. Even Britain and France are in financial trouble.
The United States is also in deep financial crisis. It faces the need to reduce government spending (sequestration) or increase taxes.
Sequestration will mean less money for education, healthcare and defence. The number of teachers would have to be reduced. Even the control towers at some airports would have to cease operations. Military bases, weapons and personnel would have to be reduced. An austerity programme will slow down growth and increase unemployment.
Like the Europeans, the Americans also do not like to reduce their spending. They refuse to pay more taxes. In fact, the rich are demanding tax reduction.
The financial crisis in Europe and America is basically because of overspending. Until they cut back on their spending and increase taxes, their economy will not recover.
Pakatan's manifesto advocates the very things that have bankrupted Europe and America.
If Pakatan is responsible, it should work out the cost. It is not too difficult to do this as government employees' salaries as well as developmental and maintenance needs are known.
We know the number of people who will get a pay increase; we know the cost of maintaining educational and healthcare institutions; we know the cost of maintaining roads and highways; and we know the cost of development.
Instead of merely commenting, economists and financiers should work out the mathematics. Then, the people will understand what the manifesto really represents.
But, on the other hand, Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim has said a manifesto is not a promise. Obviously, Pakatan is preparing to renege on its manifesto.
This is not surprising. In Selangor, the Pakatan government has failed to honour its promise, including providing free water and allowance for single mothers.
Pakatan's manifesto is obviously meant to hoodwink the electorate.

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