Reworking The Budget

Rumours coming out of UMNO folks in Pahang say the PM will step down by June 2015.  This has no relationship to this news but Pahang MB Wan Adnan is not  a Jibby boy at all.  This is the second time I am hearing "rumours from inside UMNO". The first rumour I heard (about this) was from people working under the Onion Dome itself. There is a picture of the Onion Dome in my first book 'To Digress A Little'. 

Anyway to blow my trumpet again (saja lah nak bagi sakit hati kat golongan tu) the New Straits Times called me three days ago and interviewed me about my views on restructuring the Budgt 2015. My comments appeared in an infographic column on pg 3 of the NST yesterday.  (I cannot find NST's archives on their website). I thought I was a PNG (persona non grata) with NST but they called anyway. Surprise.

I believe the Budget totalled over RM300 billion. The restructuring has not really reduced this expenditure.  RM5.5 billion has been cut. That is less than 2% of the Budget. Big deal. Some of these funds (RM3.3 billion) have been redeployed. So the net reduction is RM2.2 billion - less than 1%. That is all. 

The NS has been postponed, saving us RM400 million. But what about Permata's RM700 million?  

Then the PM's boys are going on a trek to the South Pole  (Menjelajah 7 Benua or something - it came out in the Utusan). Is that program still on? Kalau pakai duit bapak dia ok lah. Tapi kalau bapak dia tak ada bulu pun habis nak pakai duit siapa?  

Looking at The Star's front page snapshot, the RM3.3 billion reallocation is as follows:

RM893 million for flood mitigation. How much of that will really mitigate and how much will go into Jin Jeragas' pocket?

RM800 million to repair roads, schools and hospitals. More sink holes there. Porsche Cayenne and Nissan Murano akan laku. Folks do you know that the Prada shop in Pavillion has exceeded their monthly sales target for December? Their target was RM5 million. Bukan semua orang kena banjir.

RM500 million rehab work. This is more hazy already. 

RM500 million loan guarantee to be administered by Prokhas Sdn Bhd? Who the hell is Prokhas? Anyway let me wish Prokhas Gong Xi Fa Cai. Ang Pow has come early. 

RM500 million for SMEs. This is good. Rehab all the batek factories, keropok lekor factories, kicap factories etc. Get the local economy back on its feet. And do it quick. But there will be black holes here as well. Mesin RM3 ribu jangan masuk invoice jadi RM10,000. 

RM200 million to Tekun dan Amanah Ikhtiar. I say brader, isnt that the outfit where that fellow bought 'high end cars'? Lepas itu kena investigate tapi tak kena apa pun? Elok lah tu. Dapat lagi duit RM200 juta.

Here is something really weird. A tariff hike for TNB will be deferred. Tariff hike? I say, harga minyak dan gas sudah jatuh macam tergolek di Genting Highlands. There should be a tariff cut.

The Star says 'cost absorbed'. By whom? The gomen? If no tariff hike, does that mean the gomen compensate TNB thru the backoor? Like 'no toll hike' so the toll operators claim compensation from the gomen anyway ! !

Treasury Sec Gen Irwan Siregar says that a 30% decline in oil prices would reduce net export receipts of LNG by RM20bil. But the oil price has crashed 50% since June 2014. That means our export receipts are even lower. Ok we can understand that.

That is because gas prices have also collapsed. Thats why our LNG (err..LNG means liquefied natural gas ok) earnings have dropped RM20bil.  So how or why should TNB tariffs go up in the first place? More than half of TNB's power generation is from gas turbines. The rest are coal fired which is even cheaper - because coal prices have also collapsed.

Why should the gomen "absorb" any cost? If at all let Petronas and TNB absorb the costs. They are both GLCs. Dont burden taxpayers funds.

Irwan Siregar says that since 2014 Malaysia is a net importer of oil and petroleum products. (Alamak Abdul Wahid Omar says in a WattsApp message that Malaysia is a net exporter).  Who is correct? Irwan the Treasury Sec Gen or Wahid Ibn Waraq who says our median income is a few billion Rupiahs or something like that.

Ok Irwan, but please note that Petronas is taxpayer owned (aka a gomen company)  and Petronas contributes about 40% of gomen revenue DIRECTLY. That makes a very big difference to the gomen's cashflow.  The economy as a whole will benefit from cheaper oil (and gas too, despite TNB and Petronas behaving strange) but the gomen's own finances will suffer.

RM1.6 billion cut in supplies and services, epecially overseas travel, events and use of professional services. No more con-sultans? Really? Unnecessary door gifts, gft packs and cenderahati at every single event and half an event?

RM300 million shall be cut for purchase of non critical assets like software and office equipment.

In my interview with the NST I also said that the gomen should cut opex or operating expenditure. No salary increase or extra bonuses this year for Civil Servants. All Ministers and MPs take a paycut. Its symbolic.

I also said spend money wisely. Stretch every Ringgit because that will create the maximum multiplier effect in the economy. For example between a bus station and a masjid, build the bus station first and cancel the masjid. The bus station creates more spinoffs and multiplier effects in the economy than the masjid.  The bus station will promote inter city movement of people and goods. The masjid may produce a jihadi warrior.

I also said that Bank Negara must not increase the interest rates. Zeti is still pondering and waiting for the right ilham. Well Ma'am do listen to what I am saying here. Please not now ok.

Pull back taxes. Remove the 30% RPGT. It is strangling the property sector. Bank Negara should ease up end finance loans and housing loans so that the backlog of unsold properties can move faster. Please put on your thinking caps.

Cut income tax a little and postpone the GST from April to say another 18 months. Thats what Japan has done.

The idea to suspend EPF contributions is good. Even just for six months will put plenty extra cash in peoples' hands and in the economy. Suspend employee contributions only, not employer contributions. Employees no need to pay their 11% EPF for six months but employers must continue paying. Folks I am an employer myself.  We employ staff.  An extra 11% salary for them for six months will be a lot.

Yes I did say that make hiring maids easier.  Maids ease up family burdens and create extra times for families to run small businesses and enterprises.  This is important.

I also said that make things easier for the rich and the business people to start a business, to expand their businesses because they will create new jobs and opportunities. In times of economic crisis seek out the business people.  Lower taxes, exemptions, reduce red tape, open up new areas in the economy etc.

RM3.3 billion has been allocated for flood relief. That is a lot of Porsches, Pradas and Muranos.