Much ado about nothing - The Malaysian Insider
October 3, 2012 ― After all the hoopla in the preceding weeks about the government’s annual Budget, there is a strange feeling of it having been to all purposes a bit of a non-event. Even the near hysterical tone of the “spot on” theme of The Star’s coverage of the Budget last year was replaced this time around by an almost factual tenor in the reporting of the Budget in the same newspaper.
It’s almost as if the prime minister was unable to either take the radical measures demanded by most economists or the equally radically populist measures demanded by his coalition given that that the general election is around the corner. It all came out a bit half hearted.
Government revenue growth projections are almost flat, subsidies are largely intact, there are no real efforts to rein in the deficit except by hoping for better GDP growth next year, the GST was not even mentioned and corporate tax rates are unchanged. Clearly this was not a year for hard measures to either stimulate private investment or reduce government spending.
On the other hand, even measures that would have been welcomed as lightening the middle-class burden such as lowering the individual income tax rates or increasing exemptions on income tax, substantially increasing the real property gains tax (RPGT) rates to curb speculation in the mid-level property market or even extending the cost of living allowance to the private sector have not come to fruition.
In many ways, the continuation of the cash handouts to various groups betrays the BN’s assumptions about the political maturity of Malaysian voters. They may not be wrong. After last year’s BR1M handouts, the prime minister’s popularity showed a marked uptick for a period of about three months. The political arithmetic seems to be that the average voter is so overwhelmed by gratitude in the face of a cash handout that a rise in popularity of the ruling coalition and consequently votes in the election immediately after are assured.
But the problem with repeating handouts or bonuses to civil servants is the law of diminishing returns. In the case when these begin to be seen as commonplace, the level of gratitude is the obvious casualty.
Even if the obvious irrelevance of such handouts in enhancing national productivity or welfare is ignored, big news measures such as reducing excise on cars or even abolishing the PTPTN would have had a much bigger impact on the government’s popularity.
In any case, this was the last real chance for the incumbent government before the elections to showcase statesmanship over politics, leadership over short-term populism and inclusivity over divisiveness. An opportunity it seems to have completely ignored.
An opportunity to replace race-based politics with a needs and merit based approach, an opportunity to come down hard on institutionalised corruption and nepotism, an opportunity to shift government expenditure to a developmental agenda rather than one keeping an already bloated civil service happy, an opportunity to reform an education system where only the wealthy can access world class learning and an opportunity to promote gender equality over entrenched patriarchies.
The cost of inaction on all these areas is a much larger story than the one on a Budget that ostensibly tried to please everyone but will genuinely please very few. In a world growing more competitive daily, narrow partisan agendas using race and religion intent on distracting Malaysians from the drastic measures required to move to a high income nation may prove ultimately suicidal, even for race and religion to thrive.
If this Budget is actually seen by the rakyat as a panacea for all its ills and the government rewarded accordingly, then it is truly a nation very easily pleased, deserving of the policies it lives under.
It’s almost as if the prime minister was unable to either take the radical measures demanded by most economists or the equally radically populist measures demanded by his coalition given that that the general election is around the corner. It all came out a bit half hearted.
Government revenue growth projections are almost flat, subsidies are largely intact, there are no real efforts to rein in the deficit except by hoping for better GDP growth next year, the GST was not even mentioned and corporate tax rates are unchanged. Clearly this was not a year for hard measures to either stimulate private investment or reduce government spending.
On the other hand, even measures that would have been welcomed as lightening the middle-class burden such as lowering the individual income tax rates or increasing exemptions on income tax, substantially increasing the real property gains tax (RPGT) rates to curb speculation in the mid-level property market or even extending the cost of living allowance to the private sector have not come to fruition.
In many ways, the continuation of the cash handouts to various groups betrays the BN’s assumptions about the political maturity of Malaysian voters. They may not be wrong. After last year’s BR1M handouts, the prime minister’s popularity showed a marked uptick for a period of about three months. The political arithmetic seems to be that the average voter is so overwhelmed by gratitude in the face of a cash handout that a rise in popularity of the ruling coalition and consequently votes in the election immediately after are assured.
But the problem with repeating handouts or bonuses to civil servants is the law of diminishing returns. In the case when these begin to be seen as commonplace, the level of gratitude is the obvious casualty.
Even if the obvious irrelevance of such handouts in enhancing national productivity or welfare is ignored, big news measures such as reducing excise on cars or even abolishing the PTPTN would have had a much bigger impact on the government’s popularity.
In any case, this was the last real chance for the incumbent government before the elections to showcase statesmanship over politics, leadership over short-term populism and inclusivity over divisiveness. An opportunity it seems to have completely ignored.
An opportunity to replace race-based politics with a needs and merit based approach, an opportunity to come down hard on institutionalised corruption and nepotism, an opportunity to shift government expenditure to a developmental agenda rather than one keeping an already bloated civil service happy, an opportunity to reform an education system where only the wealthy can access world class learning and an opportunity to promote gender equality over entrenched patriarchies.
The cost of inaction on all these areas is a much larger story than the one on a Budget that ostensibly tried to please everyone but will genuinely please very few. In a world growing more competitive daily, narrow partisan agendas using race and religion intent on distracting Malaysians from the drastic measures required to move to a high income nation may prove ultimately suicidal, even for race and religion to thrive.
If this Budget is actually seen by the rakyat as a panacea for all its ills and the government rewarded accordingly, then it is truly a nation very easily pleased, deserving of the policies it lives under.
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