On the surface, the 2011 Budget sounds rather bombastic. Mega projects have made their way into in the budget i.e. MRT project worth more than RM40 billion, a mega 100 storey tower, Warisan Merdeka, worth some RM5 billion, Sungai Buloh development worth RM10 billion, eco-nature resort in Sabah worth RM3 billion, freeze of toll scheduled toll hike charges for the next five years which is going to cost the government a few billion ringgit.
The total budget is almost 3% higher than the 2010 budget. A bulk of the total budget goes to operations @ RM162.8 billion. A meagre RM49.2 billion is allocated for development.
The main issue is the failure of the government to restructure the burgeoning civil service sector of some 1.3 million strong. Without restructuring the civil sector, curb excesses in public expenditure, creating tougher guidelines to curb unnecessary spending in public sector, and introduce an open tender system for all public procurement, there is no way the government will be able to reduce budget deficit and spend more on development.
The burgeoning civil sector is a prime example of the government's failure to grow the private sector, help to create more jobs and opportunities in the private sector, and reduce government's burden of having to employment for Malay graduates and school leavers.
The government cannot ignore the need to observe austerity. A leaner and meaner government should use and adopt the ICT to improve and enhance its service delivery. Public sector is not a welfare department.
Unfortunately, not much has been set aside to assist the SMEs which represent more than 75% of total registered businesses in Malaysia. Big infrastructure projects do not necessary create more jobs for the locals. We need a comprehensive strategy to improve the local economy e.g. manufacturing, services, retail, F&B, tourism, hospitality, creative, cottage industries and others.
Instead of spending so much of PNB money to build a mega tower, more resources should be allocated for actual urban renewal. What is the point of building a mega tower when its surrounding consists of old & worn out buildings, collapsing infrastructure and narrow roads which will be choked with more traffic congestion after the mega tower is ready?
What about second tier town/cities such as Ipoh, Penang, Seremban, Kota Kinabalu, and others?
The construction of a mega tower will not help small & medium businesses to gain access to more affordable rented space. Property rentals have escalated in the city centre and have driven many small businesses and retailers out of business.
Warisan Merdeka would probably ended up hosting more GLC clients such as PNB, Khazanah, EPF and Sime Darby who would be arm-twisted to rent the empty spaces. Is Warisan Merdeka a symbol of Najib's mega ego?
Where is a comprehensive public transport plan? We have been asking the government for one since the Mahathir administration. A comprehensive public transport strategy covers not only MRT but a variety of transport systems which are affordable and flexible to service different needs.
I am not sure how the government can help to increase income per capita when there is no mechanism or plans to help the people to earn more. Talk is cheap. Numbers only look good on paper. It is without a doubt that increasing income per capita is a good strategy to make Malaysia's small local market and low consumption power more attractive to local and foreign investors to invest in the country. But how can the government achieve this objection without focusing on SMEs which employed more than 60% of Malaysian workers? Mustapa Mohamad said the money will eventually trickle down to SMEs. This is such a weak assumption.
The government has provided tax discounts, guarantees and loans to home buyers especially civil servants but it has not solved the source of the problem - growing property bubble and high property prices. A lack of affordable homes may drive many people away from city centres. Lower consumption power is attributable to home and car mortgages.
Spending on mega infrastructure projects to pump prime the economy is not the right economic remedy for Malaysia.
Looks like it is Mahathir era all over again. Without focus on intangibles, processes, models, mindset, work ethics, education quality, etc. it is without a doubt that this budget will fail to help turning Malaysia economy around.
Looks like the Idris Jala prophecy - that Malaysia may go bankrupt in 9 years- might turn out to be self-inflicted one.
16 comments:
Dear Khoo
Your observation on the lack of tax/business incentives for the SMIs in this budget is spot on. Najib's assumption that Federal revenue will increase in 2011 - based on improving economic conditions - is naive, to say the least. The global economic condition is still in the doldrums; yet this budget assumes, in a simplistic manner, that the economy will turn around. What are the revenue drivers? How are they being enhanced, eg will a big tower bring back our oversea work force? How is the supply chain link being improved? Awarding big contracts does not equate to an improved quality of services - only people like Ng Yen Yen, Shahrizat and those with cables - will be smiling from ear to ear. If 75% of registered businesses are SMEs, or if 60% of our Malaysian workforce are employed by them - then what incentives are being given to help them maintain their revenue generating activities? How is a RM5b tower going to help your local SME improve his business condition? How is having a bloated civil service going to help the SME entrepreneur in reducing his processing time at government departments? Najib - by setting aside RM162b for civil service operating expenditure, is basically saying, "This government would continue to fund excesses, inefficiencies and wastage". Wastage because, as any SME operators would tell you, try and live with the waiting time for license applications etc and other processes necessary to run your business. Najib's budget proves to me yet again, my suspicion: We don't have the right team helming Putrajaya.
Like many very tired work-to-death employed city folks, we are NOT interested in any super building,bridge to outshine the rest of the world-we are more educated than NgYYen and most ministers who said if other country can have it why not us having it even bigger(sigh).All we need is enough sleep, cheap food on the table for our kids and elderly parents to eat,a simple clean flat to live in,little crimes,clean longkang,clean public toilets,lesser jams,cheaper white bread....is this too much to ask?But you give us super highways,super bridge,super buildings while all toilets/drains remain as dirty- none of what we asked for.I give up!
kkp, when a leader suffers from confidence deficit syndrome, as he has been tagged with such unflattering names as henpecked, mou choon toi, flip-flop etc, the only way to boost his ego is to build the grandest phallic symbol he can dream of.
again you are spot on that this budget is neither transformative nor visionary. it continues on with the umno warlord tradition of dishing out moo-lah to the cronies through mega projects, and dream beyond hope that it trickles down to the masses. he never learns that this formula has not worked for the last 30 years since the nep, as this crony capitalism breeds inefficiencies as it fattens the few and impoverishes the masses. income disparity widens and without a growing middle class, where is the spending power to drive a high income economy?
well.. you guys vote for it,so don't complain !!! suck it up..
ask chua soi lek lor. he gave thumps up. ask Koh of Gerakan. He gave toes up.
ask Kit Siang. He gave up lor.
ask me, a man on the street. Nothing for me lor again.
MEGA TOWER
Mega project who will benefit. If the is not transparent of awarding the project. You should know who ????.
Don't worry when Malaysia goes bankrupt in 2019 as we have Warisan Merdeka to lelong and Sungai Buloh development to house the whole population!!
We also do not have to worry about public exam as PMR has been abolished. Instead, BIASED school-based assessment ensure all students achieving straight ASS (Note: this is the plural spelling of too many A, so I decided to coil it with two SS after the "A")!!!
Let's embrace the new dawn for Malaysia. The dawn of bankruptcy and demise :)
The 100 storey Warisan Merdeka will be "owned" by the chosen 100 politicians and each of them will be able to collect rental!!!
Khoo I think Malaysia will go bankrupt earlier than 2019.The world economic crisis is far from over.Next year 2011 will probably gets worst.Tourism and Investors $$$ will be hard to come by.Which developed country depended on mega projects, like a twin tower or 100 storey building to sustain growth??
"Style mau kala tidak apa"
The big spenders are going to have a field day , along with the cronies waiting hungrily on the side lines.
Trying to leave his mark on the nation, the PM resorts to Mahathirism to promote Najibnomics - wasting on big pretigious unholistic projects.
Are we on the road to bankruptcy? Maybe the GE13 could fortell.
You failed to mention that the ultimate aim is the opposite of what it says ?
PM tries to follow Dr.M footstep by creating another icon during his reign.
If it is a 100 storey "Warisan Rakyat" which is a 100 storey apartments for the Rakyat, I will fully support it. But, since it is going to be for commercial only, why not build 200 storey ? The reason being if you build 100 storey now, the next PM will build 120 storey to surpass you and the following PM will build 150 storey to surpass his predecessor and never ending. So you build 200 storey now, it can last you for a few tens of decades.
100 storey tower to be rented out for swiftlet farming, a world's first. Eco-correct because sustainable, bird's nest also earn good export $$$$. Export the bird's poo to countries with chemical fertilizer phobia and again earn export $$$.
What about connecting the 100 storey tower with a cable car directly to Genting Highlands- an engineering world's longest and first, a sure tourist attraction.
What about make one wall of the tower a rock-climbing face- world's tallest and without a safety net.Those foreign maniacs will surely visit M'sia in droves.
Have elevators to bring cars up to the top most floors- then another world record ,highest parking space in the world.
Wow, I should work for the gomen, I had singlehandedly suggested 4 world records for Najib to boost his name. Fat Hope lah.
These guys have ego as high as the sky. Our PeeeeeM and his so called economic advisers have caught the disease of that now senile half dead mamak kutty. Only, the highest, longest, biggest are all these bums care of,leaving most of the rakyat dumb and clueless.
This is Bolehland.
Dear All, do slowdown and ponder at Hong Kong's economy. Their income per capita may be high but prices of their basic necessities are sky-high. Income gap among the rich and the hardcore poor is widening by the day. We should elect a govt who is capable of increasing our purchase power instead of blindly chasing the 'high-income' tag.
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