Politics and business seem to be badly mixed up nowadays, with politicians blatantly doing business and businessmen playing politics. But there is such a thing as real politics and real business.
Real politics is when the government sets about pursuing policies that champion the interests of the nation and the well-being of the general public. The government is the politicians and the civil servants. Politicians are supposed to come and go while the civil servants are supposed to be professional and know their stuff. But when ignorant politicians push policies down to inept civil servants to implement or when they listen to inept advice, we have an economic disaster in the making.
The current episode is bad politics killing off real business. Nowhere have I seen such an eagerness of a government to destroy the underlying foundations of an economy. The government seems to be at war with real business. Giving the benefit of the doubt, policies may be good but the mishandling of their implementation is a sure way to destroy the dynamics of real business.
The GST is a case in point. This is not my favourite topic, but the more I hear the more I am unhappy.
1. The GST is now justified on the ground that we are undertaxed as per the GDP compared to other countries. The blame goes to the black economy and therefore the indirect attempts to capture all transactions in the economy. But for all I care, the GDP number may have been blown up to show that the economy is doing better than it actually is by inflating on the growth of the services sector. And if we realise that the most incentivised sector of the economy is the financial industry with virtually zero tax on any profit made in the stock market, then that is a big chunk of the tax gone. There are no taxes on foreign investments, and the government even gives grant to foreign firms to invest here. So now real business must be properly taxed. At the same time, the government is trying to encourage entreprenuership through start-ups when even existing businesses are struggling to survive in the current environment.
2. The government is very happy to take the GST money from real business even when the invoices are not properly made. But it does not allow claims on the same ground. Is the government a money sucking machine? The government is incompetent to run the GST, being implemented without proper preparation. However the government is going to justify itself, for sure, the GST is a downer on the economy. How the strong will surely survive, I pity the small firms that cannot withstand the burden of having to cope with having to deal with the GST, and administrative as well as the tax cost.
I have applauded the government's policy on restricting foreign workers in the country for several reasons: It is time to move up the value chain. It is time to treat foreign workers here properly by paying them decent wages and offering them decent social services. It is time to take stock of the foreign workers we already have here, rather that importing more. There should be a comprehensive registration of all individuals residing in this country. It is time to ensure that foreign workers are healthy as many are employed in the food and beverage industry.
What happened? Well, real business has real problems registering their workers. End of business and end of story. The civil servants continue to enjoy their take-home pay and go on long training and long leave. (I think the annual leave of civil servants should be cut to 20 days a year and their annual training to not more than 3 days a year.)
Real business is usually small business. I don't think you can nurture young entrepreneurs when the environment is set to kill anyone struggling to make ends meet. The black market exists because not very well educated people are trying to cope in an unfriendly bureaucratic environment. I am not championing the black market. I am calling for a competent and efficient civil service.
I am of course by the racism in real business, when politics is involved in the business world. The government should champion all businesses for the national good. To have government departments championing racism is a bad sign. (I won't comment on religion.)
Politicians play politics, businessmen make money. That the right order of things. It should not be politicians making money and businessmen playing politics.