Why the Subsidy Cut Will Become a Political Burden for BN?

The government may be trying to justify the subsidy cut for oil, gas and sugar as something essential and crucial to fuel economic growth. However, a lack of well thought out implementation plan is not going to convince many that the subsidy cut is going to help us become a high income economy in the near future.

There are several things which the federal government had overlooked and does not show any sign of willingness to address them:

1) Wastage & a lack of financial accountability. The government cannot rationalize its subsidy cut without first addressing its own financial prudence.

A member of parliament, Liew Chin Tong, argued that the Prime Minister’s Department’s allocation for 2010 is a whopping RM12 billion, not RM4 billion as reported in the media. He said that the parliamentary reply to his colleague Taiping MP, Nga Kor Ming, revealed that RM3.9 billion was allocated to the PMD for its “operations” in 2010. But he seemed to be withholding another piece of information already in the public domain. Under a separate category of “development”, the PMD received RM 8.238 billion. Thus, the total budgetary outlay for the PMD in 2010 is RM12.1 billion, as revealed by the Federal Budget Estimates.

This is a very shocking number. Why would a PM's department be hoarding so much public allocation? How does he intend to use the allocation? What are the KPIs? Is there any financial/allocation guidelines spelled out by the Treasury to ensure that there is no misused and abuse of public funds?

Without observing a strict financial prudence in his government, the PM's decision to cut subsidy will not be met with a good reception. It will lose him votes among the Malay voters too.

2) Another BN MP, Ong Tee Keat, wrote in his Facebook while it is necessary to reduce subsidy there is a greater need for the government to go after those who misappropriated public funds e.g. PKFZ. There are other similar projects which are causing a huge financial headache for the government. The unscrupulous action of approving dodgy projects especially those awarded to cronies or companies linked to politicians is not going to be well received by the public. A lack of action from the government to tackle these issues and to bring the culprits to book is giving it a bad reputation of trying to protect its cronies.

3) The government continues to take the people for granted by announcing an abrupt increase of petrol, gas and sugar prices. The Malaysian public abhor such tactic. The government is accountable to public opinion and it should have given us a timetable for a gradual subsidy reduction.

4) Recently, the Ministry of Human Resource launched a training scheme for unemployed graduates and touted the programme as a move to realise the NEM's aim to make Malaysia a high income country by the end of the decade. It hopes to increase the per capita income from USD7k to USD15k by then.

This statement shows that the government does not have a clue or a plan on how to help enhance the income of Malaysians. The training programme, if any, is a short-term plan to help rectify a flaw in our local tertiary education system. We have persistently produce low quality graduates which cannot fill the skills gap in the economy. The higher education ministry and the government should sit down and plan out a comprehensive review and revamp of the entire education system.

It is laughable for minister, Dr. S. Subramaniam, to claim that this programme can help to create higher paying jobs for the graduates. What can a 3-6 months training programme achieve what a 3-4 years university education cannot do?

5) What Najib need is good solution providers and implementers and not spin doctors. It does not matter how the price increase is depicted on local newspapers or how local editors are willing to put a twist on the issue by calling it a brave decision. It is brave indeed for a lack of plan for the PM to go ahead with the subsidy reduction.

At the end of the day, the call for Malay unity can only help UMNO this much in order to reverse the coalition's fortune.

The beat of an empty stomach regardless of race sounds the same. Soon, more Malaysians will realise that it does not matter which race based party is ruling the country. What is more important is who can help lift this country out of its doldrums.

straight talk
24/07/10

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