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Tuesday, February 14, 2017

"No Income Nation" Comes To DBKL Staff ! ABOLISH THE GST LAH !

Some DBKL staff drowning in personal debt: Ku Nan

Bernama - 14 February 2017
DBKL staff retain only RM50 of salary after debts, said Ku Nan

over 1,200 DBKL staff have high monthly debt obligations

so little income, they can't pay living expenses

caught cheating, falsifying salary slips to qualify for higher loans

taken so many loans, loan (payments?) equivalent to monthly income

And then here comes Ku Nan's stupidity  :

FT Ministry will assist solve their financial problems

by getting lower interest rates, extending term of loans

DBKL settle their debts first, make periodic deductions from salary

this has not been finalized -- Bernama

My comments :  With all due respect to the DBKL staff, what is so special about them that Ku Nan suggests using taxpayers funds to "settle their debts"? 

How about school teachers, hospital ambulance drivers, policemen etc? Should the gomen 'settle all their debts" as well and then potong gaji over a longer period of time? 

Get lower interest rates from who? Ah Long Babuji and Co? 

It is basic banking practise that higher risk borrowers pay higher interest rates and lower risk borrowers pay lower interest rates. As I said before this kabilah is very DNA challenged.  

This did not happen in Malaysia BEFORE the disastrous GST was implemented. Just abolish the GST.

To all you gomen morons and prepaid monkeys let me repeat a simple Standard Four calculation about the real effect of the GST. (Some of you idiots were cursing and laughing at me when I said exactly the same thing just before the GST was implemented. Well you can eat crow now).

Without GST

Say the factory price for some products is RM100. This is what the wholesaler pays the factory.

Then the wholesaler put a 10% profit margin and it became RM110. This will be the price offered by the wholesaler to the retailers.

Lets say the retailer added a 20% profit and sold it to the consumer for RM132.00  

So from factory to consumer is a RM32 margin payable by the consumers.  Without any GST. 

Now lets add 6% GST

Now there is 6% GST. Start from the top again.  So the wholesaler has to pay the factory RM106 for the same amount of product.

Then the wholesaler marks up his profit of say 10%. So his selling price becomes  RM116.60.   

Then the wholesaler adds again GST at 6% and the wholesaler's price to the retailer becomes  RM 123.60

Then the same retailer marks up the same 20% profit. The price to the final consumer becomes RM148.32. 

But wait a minute, there is that  GST 6% again and so the price to the consumer becomes RM157.21 for the same product.

In this simple example (which is very real) after the GST, from factory to consumer  the margin payable by the consumer is RM57.21.

With GST the increase in the retail price is RM157.21 - RM132 = RM25.21  or 19%.

This is using a simple three node supply chain (factory, wholesaler, retailer) with a 10% markup at wholesale and a 20% markup at retail.  

If you have the time you can try other rates of markup.  In the jewellery business, Poh Kong the market leader adds a 24% mark up on gold price alone, but they "absorb" the GST. He he. 

In this example the consumer pays 19% extra with GST.

All the "netting off"  bullshit is a backroom operation between the business people and the customs department.  That does not involve you the consumer. 
There is a simple reason for this. When you buy goods from your wholesaler, you have to pay him extra 6% now, today, this morning, in your face and  using your real money.

Then the product sits in your premises waiting for a customer. A customer could purchase it today, tomorrow, next week or two years from now. I dont know. 
In the meantime it is your capital (as a business) that has been used to pay that 6% GST to the gomen.   You are burning your own capital to pay that 6% GST.

And you  cannot  'get back'  that 6% until the product gets sold, which as I said can be today, tomorrow, next week or next year. 
So who is going to cover the cost of that extra capital?  It is a huge opportunity cost for you as a business. Who is going to pay for that? 

Not the Social Welfare Department. It has to be the consumer.  So the businesses "pass through" the costs of the GST to the consumer. The consumers  pay extra.

The consumer bears all these 'compounded' GST costs.  

So you are a DBKL staff earning say RM2000 per month.  
You can barely survive on RM2000 per month in KL. 
The whole RM2000 will be gone in no time.

But you are not buying goods worth RM2000 anymore.  
19% of your RM2000 goes DIRECTLY to the gomen in the form of the GST.   
That is RM380.  
Your actual purchasing power is RM1620 only.

You have been hit by a 19% pay cut (in the simple and very real scenario above).

If you are a person who consumes a lot of GST items, your actual pay cut will be more.

If you live by non GST purchases alone (kangkung, ikan kembong) then your pay cut is less.
The wage earners, especially the DBKL staff who are almost 100% Malays,  get hit the most because their salaries are fixed. 

The GST is killing them first.
Please ABOLISH the GST. 
The people are becoming poor. 
The Malays are becoming impoverished.

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