I hope Nor Mohamed Yakcop is reading the right economics manuscript. As an economic advisor to the government, Nor should acknowledge the burden of private vehicle price and excise duty on consumers.
Years of supporting the national car policy has been futile so far. Apart from creating unnecessary burden to the people and crippling the public transport system through deliberate neglect, there's little benefit to the local automotive industry.
Proton was given the opportunity to become a respectable regional player but it is finding itself increasing difficult to even survive locally.
We have to ask the government when it intends to review the national car policy or scrap it entirely? Like the NEP, should the government continue to subsidize and protect the local producer? It is long overdue that the national car producer should be asked to stand on its own feet. Being competitive and innovative is the only way for Proton to survive and thrive, not through continuous protection.
It is time for the government to stop being penny wise but pound foolish. Half of our petrol subsidy goes to private vehicles.
According to a report, Malaysia's huge fuel subsidy bill, estimated at RM20 billion last year, is overdue for an overhaul. While reforms are imminent, few expect any of it can happen until the general election (GE) is over.
Recent reports indicated that Malaysia's fuel prices are the second cheapest in Asia, and the 10th cheapest globally.
The low fuel price, which also keeps down the price of everyday needs like electricity and transportation, helped keep inflation rate at subdued levels.
While this might show that Malaysia's strategy to shield its citizens from the harsh reality of expensive fuel had worked, economists warn that running a huge subsidy bill is not sustainable over the long run.
Reckless grants, subsidies and expenses are going to bankrupt us. Reducing taxes for cars and reducing petrol subsidy at the same is going to help us to correct the economic imbalances. It is pertinent for the government to stop protecting crony companies and businesses.
It should focus on providing a better public transport system so that we can use our energy sources on more productive means.
Nor Mohamed Yakcop's economic remedy is a recipe for disaster. It does not make sense to suggest that reducing taxes for cars is going to bankrupt the country. If this is true, the 12.5 billion ringgit PKFZ would have brought us down. What about the Auditor General's report on leakage and poor governance? What about the RM26 billion lost to corruption yearly?
We need better economic advisors and possible better leaders to lead the country. The quality of top executives are appalling at the moment.
8 comments:
Leave business development plan to NON Politicians Like AIR ASIA "BOLEH"
Higher taxes under whatever guise will hurt the spending power of the public and eventually slow the economy.Because it causes inflation.How can lower taxes caused bankruptcy.To whom.The public or politicians and their cronies.
This idiotic stooge doesn't understand the economics of business.A dumbass armchair warmer he is.A makan gaji buta crony of the lower class talking crap.
the answer my friend is blowing in the wind..bob dylan..or rather print more money lah..siri baru..aka new series of malaysian currrency..the timing is so inpecible..near the election..print more money..so that more money can be thrown as bait..yummy yum yum..mayb u can write on why malaysia should introduce new series of the ringgit now..\
With bad and corrupt leaders, Malaysia is going BANKRUPT in Wealth and Morale very very soon.
I remember reading about abolishing import duties for cars 3 years ago, by this guy sinner saint something.
I feel Sin Tax all together should be abolished or reduced drastically, why should one segment of the population be penalised for its choices/lifestyle???
Without proper data for comparison and analysis, how can the public decide or vote for or against any reduction or exemption on duties?
Re-engineering is about making decision which are relevant as time changes, don’t you think so?
We are a oil producing nation, where do we stand in the poll with other oil producing on prices at the pump?
To agree or not to any duties abolished/reduced without proper data is futile.
I am glad that finally the issue of unnecessary car taxes are in the spotlight. It is a waste of taxpayers money because we actually get nothing from it. On top of the AP and excise taxes, we still pay exorbitantly for road tolls and above all of this we pay road tax!
It is actually pointless claiming that we have one of the cheapest fuel in Asia because it does mean things are cheaper in Malaysia. Let me give you an example. If you take the bus from KL to Hatyai, Thailand the cheapest ticket you can get is RM 50 (usually between RM 50 - 60). From Hatyai the busses fuel up at slightly more than RM3 for a liter of diesel but they can still provide tickets for RM 40 for the travel from Hatyai to KL! You have to ask what is the point of having one of the cheapest fuel in Asia. Even basic product prices from food to clothing in Thailand is either cheaper or the same as Malaysia. All this without Thailand providing fuel subsidy for its citizens.
Just imagine what will happen to the Malaysian economy if they reduced the fuel subsidy now even by 20 sen and maintained those useless domestic transport taxes. I imagine we will have the worst inflation in South East Asia despite having the cheapest fuel in the region. Go figure!
If national car is scrapped tomorrow:
Temporary loss of jobs for those involved.
Followed by related industries and supporting businesses i.e. dealers. Business has to be closed or owner must figure out how to compete and survive fast.
Huge resources is freed up from the ex-industries and businesses. It is not a zero-sum game.
More efficient allocation of resources will start to take place, i.e. labors, plants, land,etc, which is more market oriented. Old assets will be liquidated or whatever, for better used.
Previously prop-up industry only hinder the proper used of resources and usually at the expense of other industry or area, i.e public transport system.
Short term, short fall of government tax revenue but to be off-set by loosening of government burden, i.e bail out purpose that cost money through borrowing.
People disposable income is increased substantially due to the saving from lower car tax or imported car price which is far more efficiently manufactured.
Petrol price could go up due to lesser subsidies. But if you can save RM20k buying a cheaper car, it easily enough to cover the additional cost of petrol price increment for almost or longer than the usable car life.
Second hand car dealer will suffer to clear the old stock but only in short term because new cheaper car will eventually replaced the market. IT simply means we will have cheaper new car and second hand car market as well. There is a lag time but it will happen eventually.
Conclusion, freed up resources is undergoing a process of reallocation via the most efficient used that is determined by profitability. But it is not without any pain at the beginning.
Aku xbegitu ingat, nyanyuk betulku tetapi siapa yang kehilangan berbillion ringgit dalam usaha main pasaran wang dan juga merampas pasaran timah?
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