When ministers speak of value, and we pay the price

Federal Territories Minister Datuk Seri Tengku Adnan Mansor (right) is of the opinion that City Hall is doing property owners in the city a favour by revaluing their properties and putting a higher assessment rate. However, he misses the point. – The Malaysian Insider pic, November 23, 2013.What do you make of a minister who says that he is doing you a favour by taking more money from you? And you don't have a say on how the money will be spent?

This is what Kuala Lumpur property owners are facing now, less than six weeks before 2014 starts and the Kuala Lumpur City Hall imposes higher assessment rates for properties in the 243 square km Federal Territory.

The proposed rates have risen as much as 300%, but some property owners who pay RM20,000 annually now face a bill of at least RM100,000 a year in upscale neighbourhoods such as Mont Kiara and Jalan Duta.

Segambut MP Lim Lip Eng has also furnished evidence of conflicting rates for a property in the city, one that is up 540% and the other 886%.

"Meaning the while proposed assessment readjustment valuation system is in a mess," he said in an email to The Malaysian Insider today.

But if you listen to Federal Territories Minister Datuk Seri Tengku Adnan Mansor, City Hall is doing Kuala Lumpur property owners a favour by revaluing their properties and putting a higher assessment rate.

"You must remember that it is not the rate but property value which was not increased in the last 21 years.

"Well, to me, I can increase the value by just 0.1% even, but it is the property owner who is of concern here," he said in Kuala Lumpur today.

He misses the point. The Malaysian property market is a free market and it is up to the buyers and sellers, plus the bankers and valuers, who decide the property prices. Not the government.

Property values do not determine the assessment rates. Assessment rates are made up of two variables: the annual value of the properties and the percentage tax rates decided by the local council, such as the Kuala Lumpur City Hall.

Not having raised the rates for 21 years or not revaluing the property in that time should not be a reason for such a hike in rates. If anything, City Hall must have better reasons to ask for more money.

After all, it is a government body. It has decided not to listen to elected MPs or even consult stakeholders or property owners before raising the rates. It is also not accountable for what it is spending the money on.

How does the government or local authorities expect property owners to go along with the proposed rates when there is no rhyme or reason to it? Can a minister just say he has the property owners' interests at heart and expect to get away with it?

Or that the local authorities can spend the money without much accountability except to the minister, rather than the people of Kuala Lumpur? Perhaps a mea culpa later when the Auditor General puts up his report and condemns them for wastage or not following procedures?

The situation in Malaysia is no different than other countries in the world where authorities expect the people to trust them in an era of financial scandals. The problem is nobody does.

Columnist Hugh Muir from the British newspaper The Guardian put it succinctly today when he wrote, "Governments govern with the will of the people, but they govern effectively with the trust of the people. What to do in an age where trust has gone?"

The Kuala Lumpur City Hall needs to give a better reason than not raising rates for the past 21 years. And Malaysian ministers need to know that their words carry no weight or worth these days.