Nor Mohamed's economic logic: No wonder we are not far from BANKRUPTCY

Nor Mohamed Yakcop said, getting rid of taxes for cars would reduce national revenue by RM7 billion which could affect infrastructural development, especially in Sabah and Sarawak, and in the interior of the peninsula. The nation will experience economic instability and many will go bankrupt if the price and excise duty of vehicles are reduced.

I hope Nor Mohamed Yakcop is reading the right economics manuscript. As an economic advisor to the government, Nor should acknowledge the burden of private vehicle price and excise duty on consumers.

Years of supporting the national car policy has been futile so far. Apart from creating unnecessary burden to the people and crippling the public transport system through deliberate neglect, there's little benefit to the local automotive industry.

Proton was given the opportunity to become a respectable regional player but it is finding itself increasing difficult to even survive locally.

We have to ask the government when it intends to review the national car policy or scrap it entirely? Like the NEP, should the government continue to subsidize and protect the local producer? It is long overdue that the national car producer should be asked to stand on its own feet. Being competitive and innovative is the only way for Proton to survive and thrive, not through continuous protection.

It is time for the government to stop being penny wise but pound foolish. Half of our petrol subsidy goes to private vehicles.

According to a report, Malaysia's huge fuel subsidy bill, estimated at RM20 billion last year, is overdue for an overhaul. While reforms are imminent, few expect any of it can happen until the general election (GE) is over.

Recent reports indicated that Malaysia's fuel prices are the second cheapest in Asia, and the 10th cheapest globally.

The low fuel price, which also keeps down the price of everyday needs like electricity and transportation, helped keep inflation rate at subdued levels.

While this might show that Malaysia's strategy to shield its citizens from the harsh reality of expensive fuel had worked, economists warn that running a huge subsidy bill is not sustainable over the long run.

Reckless grants, subsidies and expenses are going to bankrupt us. Reducing taxes for cars and reducing petrol subsidy at the same is going to help us to correct the economic imbalances. It is pertinent for the government to stop protecting crony companies and businesses.

It should focus on providing a better public transport system so that we can use our energy sources on more productive means.

Nor Mohamed Yakcop's economic remedy is a recipe for disaster. It does not make sense to suggest that reducing taxes for cars is going to bankrupt the country. If this is true, the 12.5 billion ringgit PKFZ would have brought us down. What about the Auditor General's report on leakage and poor governance? What about the RM26 billion lost to corruption yearly?

We need better economic advisors and possible better leaders to lead the country. The quality of top executives are appalling at the moment.

-http://khookaypeng.blogspot.com