Motoring policies that are on the money

 

Finally, we have a government minister who is more economic and global savvy than many of his elected colleagues and who has shown himself to be a leader.

Finance minister Tengku Zafrul Aziz has allowed tax-free car bookings to be valid until March next year. It would have been a difficult decision because there is no precedent in Malaysia to fall back on.

“Overall, I think it’s the best interim measure that the government can provide,” said an auto industry chief who declined to be named.

“The supply chain situation is still very hard to predict. His decision reflects his appreciation of the global problem and the predicament of car buyers who have booked their cars but haven’t received them from manufacturers who can’t get stock of components,” he said.

“His decision will spur the growth of the industry and the government will not lose out in terms of total tax revenue. This is a big win for consumers, the industry and of course, the nation.”

Cutting the back-order queue

Of course, there were the critics who said this out-of-the-blue solution would lead to abuse such as backdated orders and speculation.

“Already happening in the showrooms of German brands. People book premium cars using the name of their mother, son or daughter, hoping that they can sell and transfer their bookings later. Or that by January or February, they will receive their cars and transfer them with zero mileage.”

Most of these criticisms of back-order abuse can surely be addressed by an audit of the payments trail.

Other clarifications by Customs should dictate that car bookings are non-transferable; that car bookings are model specific and cannot be changed unless that specific model is no longer in production.

Now that Tengku Zafrul has shown his mettle, we hope that he will be tasked to address the big elephant in the room, the need for an energy policy relevant to global decarbonisation goals. Along that journey, there must be a re-set of the ballooning land transport fuel subsidy.

How to solve fuel subsidy problem

There have been many suggestions towards the fuel subsidy, ranging from “thank god that the government has enough money to subsidise fuel prices if not blood will flow in the streets” to “there must be an end to handouts”.

While government studies show that 80% of fuel subsidies are enjoyed by the M40 (middle-income) group and above, the problem is how to give the subsidy only to those who should receive it.

A solution is urgently needed. The finance ministry projects the fuel subsidy to grow from RM11 billion last year to RM28 billion this year.

This fuel subsidy also encourages corruption of uniformed services by fuel smugglers.

A senior government official from the international trade and industry ministry who visited Shanghai four years ago and observed the level of tracking based on facial recognition, suggested that today’s technology including artificial intelligence could solve the problem of subsidy targeting.

RM200 a month fuel package

“Vehicle licence holders should be entitled to RM200 a month of fuel priced on a free-float basis. This would help motorcyclists and small-car owners. Those who own bigger cars will benefit up to RM200 while fuel consumption beyond that will not be subsidised.

“The issue of correct identification and accurate subsidy-targeting is a non-issue if we are willing to use facial recognition to practically implement a minimum abuse fuel subsidy system.

“And if a motorcyclist or a Kancil owner chooses to sell his RM200 monthly free float of fuel, consider that a direct cash subsidy,” said the senior government official.

Although documentation would be an issue and would be costly, he said, it would save the country a lot more money in the long term.

“Imagine also the effect on hydrocarbon pollution. When fuel is expensive, people will naturally start to conserve fuel.

“Richer car buyers will choose more fuel-efficient vehicles. Petrol-electric hybrids and zero-emission vehicles then will be a logical choice and the nation’s decarbonisation targets will be more achievable,” he said.

Could that be the beginning of an environmentally aware and socially balanced energy and land transport fuel policy? - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT