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Tuesday, June 9, 2015

Najib: GST not to bail out failed gov’t ventures

BR1M, not only popular as critics concede, but will cushion impact of GST on the people especially the B40 (bottom 40 per cent).
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KUALA LUMPUR: Critics of Prime Minister Najib Abdul Razak’s administration continue to make the claim that “with better financial management, GST need not be imposed on the people”. They also claim that by introducing GST, the government was actually asking the people, including those not in the tax bracket, to bail out failed government ventures.
Elsewhere, the critics while conceding that BR1M was popular, said that it wasn’t something the government should implement. “It’s far better to educate and train people for higher-paying jobs when incomes would increase substantially in return for work done,” Najib noted critics as saying.
He was taking to his website to address the GST and BR1M issues in two FAQs. “The successful GLCs offset the ones that are not doing well. Not every GLC can do well all the time. The question of using the GST to bail-out the GLCs that are not doing well, does not arise, and in fact we have introduced 11 cost-cutting measures in the public sector under the 11th Malaysia Plan (2016-2020).”
The bulk of the GST will be returned to the people and he cited as examples, the 11MP allocating RM5,000 to RM10,000 per house in rural areas for repairs, and the focus on the B40 (bottom 40 per cent) to increase household income to RM5,000 by 2020. “Education does increase productivity but BR1M was also needed,” said Najib in turning to a related issue. “It’s a form of targeted subsidy, a social safety net, and an economic measure.”
He called on former Prime Minister Mahathir Mohamad to stop insinuating that the government doesn’t train or educate people. “All of our economic measures in the past, current and future including the 11MP was about increasing productivity through education and training.”
The thrust of the GST, he resumed, was to broaden the revenue stream and to avoid high-reliance on revenues, and not to bail out failed government ventures. “Had GST not been implemented, the fall in the oil price recently could have sent us into an economic crisis.”
The business community and foreign investors, he claimed, remained optimistic in the wake of GST as the country now had a more diverse revenue stream and strong fundamentals.
Again, he conceded that not all GLCs were doing well but there were also those – the G20 GLCs – who had total shareholder return of 12.6 per cent per annum from 2004 to 2005, beating the KLCI’s 12.2 per cent per annum, and having market capitalization growth at 3.2 times i.e. RM133.8 billion in 2004 growing to RM431.1 billion in 2015.
“Total net profit increased from RM9.9 billion in 2004 to RM26.2 billion in 2015.”

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