You know I had had my misgivings over the GST all the while. There are of course very good reasons for being apprehensive.
a. GST is a transfer payment, like all taxes. It does not boost the economy, if it is really used to plug the whole in the public budget. But if the government then went on a spending spree, the spending spree will boost economic activities (although not quite if they are mostly foreign in origin). By getting deeper into debt, it violates the original intention of the imposition of the GST of reducing the budget deficit. The argument then went on to talk about a reduction in the debt/GDP ratio which is quite another thing.
b. The GST by itself at 6% does not sound like much, as had been argued by critics here before. But it was argued here that this will lead to an escalation of prices; not purely because of the 6% but because the imposition of the GST is a desperate measure to try to stop a sinking ship. Added by the expectations of higher US interest rates and the reversal of quantitative easing, the outflow of fund which led to further ringgit depreciation exacerbated an already bad situation. The shit hit the fan.
c. Do we zerorise the GST when we want to abolish it? Well, abolishing it means no more GST as an idea, not 0% GST. Sometimes, it's hard to find good English in this part of the world.
When you have an economy that had been focused on the unequal distribution of the petroleum windfall, you know that you are setting up the economy for a long-term reduction in economic efficiency. So much of the policy errors are being disguised by pouring money to gloss over the cracks. Contracts are no more being enforced; they can be renegotiated because of cost overruns and what not. This is paying good money for bad and incompetent work.
It would suggest that by the way we are going to unroll previous policies, which basically is to reexamine and then probably dump bad projects, things are going to slow down while we are trying to do spring cleaning. We need to brace ourselves for a time of quieter activities. The traffic seems to be fairly quiet, for a start.
I am sure most people feel a sigh of relief now that a certain thorn has been removed from our side. After that will be the healing process, of the politics as well of the economy. I am not too sure whether the same old medicines can be used for new diseases. But like the new digital economy we are all immersed in, we should be quite used to disruptive changes. While these are interesting times, let them not be a time of the disruption of the good old peace. God bless us all.
5 comments:
One can't be too sanguine prices will drop much within next month and across-board because GST effects are accretive down the supply chain and sellers have invested in tax-collection systems being paid by installments but now to be moth-bailed. Zero-rating it only is wise for once the real horror of the national, sovereign and GLC accounts are unearthed, it may have to be revived to save public services. But all the same, better it out of the way for the moment which hopefully will spur consumer sentiments and abate household suffering sooner or later.
Except it will be more likely later once Finance reveals the depth of damage of the treasury coffer to which must also be added a new high-security complex - to house the thousands of leeches who have over the years while in power bled the national and state coffers until blue-black or shall we say purple-red.
Meanwhile, still on the political ropes are some issues. One, upon Umno's president resigning, Umno youth leader Khairy immediately said Umno must be revived if only for 'race, religion and country'.
So did he forget hardly a day later what he extolled when he offered the suggestion that Umno may want to consider opening its membership to non-Malays? Safety in numbers by racial definition so as to now seemingly appear benign politically is what has contributed to the mess caused by Umno and looked the other way by other Barisan component members.
After all, if Umno can be multi-racial, it would have been a Malaysian party from the very beginning. He was probably gaming that even if multi-racial in composition, Umno will still remain Malay-majority by base membership - and thus can continue with its race-religion mono-lithic agenda for all the concerns its new non-Malay members may show about what it will be doing about country.
Secondly, he added that Umno can play a role of checks-and-balance. Now that's rich even for an Oxford-trained kid. How can a party which has not exercised checks-and-balance on its members besides destroying the integrity of all the institutions mandated to protect checks-and-balance arrogate to itself the role to check-and-balance the new government?
If he clarifies that Umno would be eminently qualified to do so since it has experience in cheating, lying, stealing and bullying, then why are its perpetrators not in jail by now for obstructing and breaking the rules of law?
And that is why, three, one must also next be especially vigilant against the likes of the Johor MB who has appointed an Umno-associate to be his private secretary. Since this MB was picked one out of three by the Johor blue-blood, likewise. Who should otherwise also redeem himself by prevailing the Pahang blue-blood to ask if the Pahang MB has since last week cut off his ears as a boast Bentong won't be lost to Pakatan. Integrity, the new principle, innit by now?
2/2
When one listens to all those oaths of swearing in the new MBs that were broadcasted, they contain good principles that reflect true concern about integrity, honesty, and other moral and ethical precepts. So how the dumbfk has all those principles been overturned by one and all in and above the last administrations? Don't they believe what they profess?
Which comes to four - why is it only now that PAS is asking about the Pastor and the others? What happened to its tongue and conscience barely weeks ago? Too busy taking new limousines for spins, izzit?
So we have two full states and some assemblies populated by cunning and opportunistic hypocrites in mentally dishonest and jurassic garbs - buyers, beware for every second until five years from now. Believed in once, none again evermore. Let that be the price to pay by those who speak with forked tongues. As for the hoi-polloi in Kelantan and Terengganu, syurga's can't be built on stilts of hypocrisy, human or otherwise. Others will make up for lost time; you? standby observers, one hopes not.
Five, those Barisan components should sell off their assets, donate them to charitable causes like education, and disband in a shower of national appreciation. You have suffered enough-is-enough for too long. Rest and go for a holiday. But first treat the gut for all the bile accummulated for so many years not being able to go against the Malay supremacy of Umno and its mono-racist NGOs, GLCs, etc.
Which comes to NGOs like Perkasa which has come out to say the Finance Minister post must not go to a non-Malay. Are they suggesting it should go to a Malay like all the terms before until we today not only have 1MDB and the Felda-Sontakh deals, but also a list so long it rolls out like toilet paper from Putrajaya up to Perlis down to Johor and across to Pahang, Sarawak and Sabah?
Talking of which, seven, didn't Ghani Patail play a role to hush the financial scandal exposed by HK on Musa Aman? Let's see some rule of law here and in Sarawak.
Time to end at eight; if one can credit some of one's remaining years, let me put two in for Mahathir to finish his last job to save the future of the country for the next generations. He needs the stamina and foresight.
Oh we won on the ninth. So, ninth - this font type sucks! Blurry to read, imperfect when perfection has been expected. Sigh, change is the only friggin' conscience. Let's hope there is no heart-wrenching surprise in EPF's exposures. Can't even afford a cheap coffin, you know.
Ah, sixth missing. Open investigations on the rm100 million blown by the Sports Ministry helmed by Khairy.
Conscience, constant. What's the difference these days?
i say sixth is delivering BTN to the graveyard. Or imposing english as medium for maths and science. Great stuff Walla. You should open shop to train the kids without experience looking for high wages. I be first to register for long distance learning.
Now that the malaysian gestapo is no longer in power, I look forward to more posting from economic policy blog.
Cheers
Glad you're back, James.
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