Tuesday, October 02, 2012

Budget 2013: A Dilemma for Malaysians

By now we are already familiar with the items/goodies contained in the newly announced Budget 2013. Here are some of my concerns:

1) Education

The government has allocated RM3.7 billion for vocational training. This is a step in the right direction. To be successful, tertiary education (or paper qualification) can provide a head start but a good skill can provide a stable career opportunity. The government needs to rethink the current craze to simply produce more graduates but many of them have to send back for retraining in order to be employable. Some of these undergraduates would have done much better acquiring skills in vocational institutes.

The government must rethink the implementation of PTPTN (higher education loan) scheme. It has offered 20% rebate for those who intends to pay up within the next year and 10% rebate per annum to those who make timely payment. It is quite obvious that BN is taking the middle path in trying to respond to Pakatan's pledge for free education. However, the budge has not addressed a few critical issues.

First, the need to realign the PTPTN scheme. Priority should be given to students studying in the public tertiary and vocational institutions. At present, more than 46 % (and growing) of total tertiary level students are enrolled in private institutions. More than 540 private colleges have been established to take advantage of the PTPTN scheme. As result, there is a growing sense of over commercialisation of our tertiary education leading to over capacity, poor delivery and too profit oriented. On the flip side, public institutions are facing serious problem of running optimally and meeting their potential capacity. There are almost 60 universities in the country and more than 100,000 unemployed graduates too. A serious review of the PTPTN is a must before it sinks the whole tertiary education system and a great number of private institutions too. The BN government is issuing RM3-4 billion worth of bonds a year to fund the scheme.

The elephant in the room continues to be ignored. The government has not been able to address the issue of PPSMI. Apart from the budget provision for teachers' training, what is the right strategy to restructure the education system. Our education policy has always been about medium of instruction. This is definitely a wrong approach. The government needs a policy which ensures that our students get the best learning environment, contents, curriculum and delivery system.

Ironically, while the government is talking about creating 1 million jobs through its ETP initiatives there's a shortage of skilled labour in Malaysia. Brain drain is a major issue the government has been able to address apart from the creation of Talent Corp which has yet to show its full capability and ROI.

We need a world class approach to determine the scope, context and methodology of our education blueprint. At present, the disparity between those who can afford a good education and those who can't is way too wide. The government has not shown any interest to improve the quality and standards of public education in the country.

2) Human Resource

Malaysia is running its 14th year of budget deficit and yet it is acting like a rich nation. Its people shun blue collar jobs in retail, F&B, hospitality, manufacturing and agriculture sectors. Employers do not want to pay for better trained staff but preferring untrained and unskilled foreign labour. Do not be surprised if unskilled and semi-skilled foreign labour make up more than 20% of our total labour force of 12 million.

For many years running, the government has not been proactive enough to solve this issue. Wage rate is obviously one of the reasons locals are shunning these jobs. However, we should not allow this problem to continue. How is the government going to fix the problem?

The government has announced additional handouts to the group earning less than RM3000 a month. The one-off handout is only a temporary measure. To many, the sum is way too small to help out in any meaningful way. In short, the government should look at the labour situation and enhance jobs creation. It should put the money to better use.

Additional bonuses and allowances were given out to civil servants and pensioners. Again, these payments are not tied to KPI or performance. If any, these handouts are only contributing to additional operating cost for the government. The government should aim at paying better salary to a streamlined and efficient civil service and not a bludgeoning one.

At present, the economy is not creating enough good quality jobs and not paying enough to retain brains and skilled workers in the country. Employers are not willing to invest on technology or human resource because it would contribute to lower profit margin. As a result, we the consumers are the ones who suffer.

3) Cost of living

If you are a working adult above the age of 30 and earning slightly more than RM3000 a month, you are probably the most neglected group in the country. The government has failed to provide any effective remedy to respond to rising cost of living. BRIM 2.0 has been broadened to include more than 4.6 million people but this is tax payers' money including those who are barely making more than RM3000 a month. Tax reduction of 1% of the lower taxable income bracket is not going to alleviate their problem if cost of food, accommodation, transport, medical and education keep rising. There is a policy vacuum dealing with the acute rise in cost of living.

A lack of attention and assistance to this group of people is going to push out even more skilled and educated workers from Malaysia to other OECD countries.

We need a comprehensive solution not short term handouts!

4) Regional integration

Malaysian companies are slow at capitalizing on regional opportunities. Countries such as Singapore, Japan, South Korea, UK and US are actively looking for opportunities for their companies. We have spoken to a number of investors from the region. The common feedback is Malaysian companies are slow movers.

The government needs to do more to help our companies and businessmen to reach out to the region and capitalize on growing opportunities in the region. At the moment, only fairly large local companies have the resource and capacity to reach out on their own. The entire foreign office and trade mission structure has to be revamped. The government sends a trade officer who can't speak mandarin to China and has to appoint a politician to assist him. This is not a very smart move. It is not only ineffective but costly to us.

The Finance Ministry is eager to find out why Singaporean companies are willing to pay more compared to Malaysian companies. The issues I have raised above do give the government ample hints on what went wrong. We need a mindset change from the government. The racial profiling and affirmative action DNA must be replaced with a truly 1Malaysia DNA which takes a broader view to solve issues and formulate strategy for Malaysia.

Can the BN do it? What's your input on Budget 2013?


1 comment:

Anonymous said...


Lets get the imbeciles out .
ABU is the way to go.