Fiscal Prudence through fuel price hikes?

The way the government explains the increase in fuel prices has all the hallmarks of arrogance. They simply explained the fuel price hike away by saying the savings made thereof  will be channeled to rural areas. And why the rural areas? Because they have been neglected after 56 years of independence. It’s as though the alleged savings made from the withdrawal of subsidies will immediately and miraculously elevate the standard of living for our rural folks. They won’t until the stealing and robbery stops.

If we want to reward rural voters, then let’s reduce spending in urban areas. Start for example by eliminating the MRT which will gobble up more than RM50 billion of our money. Discontinue some parts of the mega project and channel what’s not spent into rural areas. Discontinue the river of life project because it’s going to be enjoyed by urban dwellers.

We haven’t actually arrived at a specific price of the MRT project. It could be more than RM50billion. Or we can reduce the subsidy given to corporations. The subsidy on flour for example isn’t enjoyed by households and those who earn RM1500 per month. There are 40% of them in this country. Flour subsidy is enjoyed mostly by the bigger flour millers such as flour milling outfits owned by Robert Kuok group and Syed Mokhtar. Eliminate the flour subsidy and the government saves about RM60 million a year. Next reduce the subsidy to the IPPs who selling power to TNB and in the process bleeding TNB. Eliminate all these tax incentives given to businesses such as Lynas and the government gets more money to channel to rural voters.

What are even more discomforting are the patronizing answers given by BN leaders explaining why the subsidy on RON 95 and Diesel is taken away. RON 95 is used by more people than RON97 since it’s cheaper. It is reasonable to assume that RON95 users are owners of less expensive cars and therefore can be further assumed to be lower income earners. Paying 20 sen a litre means more money out of pocket and reduces disposable income. Having to pay more for fuel and a range of goods in the consumer basket means higher cost of living. It will certainly be harder on the pockets. A rise in diesel price will lead to an increase in the cost of goods and services by all users of diesel. Transport companies will increase their fare; Utility companies using transport to ferry their fuel of choice will also have to increase the price of their products and services.

It’s a politically incorrect way to reduce fiscal deficit. Almost always the first to be maligned will be the ordinary folks who are quickly numbed by all sort of condescending rationale to absorb the increase.

Let us wait how the rural folks will be rewarded. But let’s not forget that 75% of our population lived in urban and semi urban areas.

It’s simply a heartless trick which the government plays on us. When confronted, the government’s incompetence is always excused by saying it’s for the rural folks. For years we have suffered fiscal deficits and they were explained away as necessary to carry out welfare programs for the needy and poor. What is the percentage of our yearly budget that is actually used for this purpose? Is it significant enough to explain and justify our fiscal deficits?

Save money by cutting off mega projects that siphon much needed financial resources from the government. Stop for example the project of supplying 500,000 laptops proposed by a retired UMNO politician from Penang. Stop the RM 1.2 billion communications project demanded by one of the royal households in Malaysia. All the money the government need to pay for these projects can be used to reward rural folks can’t they?

Posted by sakmongkol AK47