Wednesday, March 18, 2015

No to GST

Malaysia’s The Sun newspaper today has veteran UMNO MP Tengku Razaleigh Hamzah (left) on its front page imploring the government to defer the implementation of the Goods and Services Tax – supposed to come into effect on April 01, 2015 – in view of the “critical” state of the economy and public funds.
 
But the picture is incomplete. It is not merely about the economy and/or the government. It is about Malaysians and we are the most affected – us ordinary folks who may not be able to handle the added strain on our finances.
 
The Federation of Malaysian Consumers Association (Fomca) yesterday warned the public to brace for a hike in the prices of goods and services when GST comes into force. In fact, many of us are feeling the pinch because businesses have already raised their prices. Why is the government blind to this?
 
Razaleigh is right when he said: “The reasons for GST implementation should not be kept a secret”! But I fear the government are no longer listening. His speech was too little, too late and post-GST, we are all going to suffer big-time.
 
Malaysians are already bearing heavy household debts – and his question of whether GST will benefit the country or is just to pay interests to creditors and bond holders is academic because we all know the answer, don’t we?
 
As it is, at the end of 2013, Malaysia’s household debt is valued at 86.8% of the country’s GDP – which is ranked as second highest in Asia – and this is a substantial increase from 60.4% of GDP in 2008 (The Star Online, November 22, 2014).
 
Plus government debt, which is currently at 52.8% of GDP. This means Malaysia has one of Asia’s highest debt-to-GDP ratios which is just below the self-imposed limit of 55% (The Malaysian Insider, November 06, 2014).
 
Source: Webpage http://www.tradingeconomics.com/malaysia/government-debt-to-gdp, accessed March 18, 2015.
 
And yet, Prime Minister Najib Razak who also holds the finance portfolio, played down worries over Malaysia's high debt levels and maintained that they would not lead to an economic meltdown.
 
The voices of dissent against GST are growing louder. Mahathir Mohamad (left) has been vocal, saying Malaysians are not ready to be taxed by Najib’s GST. In fact, he told them that they must oppose GST.
 
PR too are not in favor of it. As Selangor Menteri Besar Mohamed Azmin Ali said the government should focus on addressing the wastage of public funds and corruption – and adding that this could possibly provide more funds than GST.
 
But Najib doesn’t care! He cannot relate to you and I. That’s why he and Rosmah are a match made in heaven. They are two peas in a pod because both of them enthusiastically embrace extravagance. All they want is to live a life of luxury and bask in all manner of comfort.

 
 











If Rosmah has her RM1,200 hairdo and a burgeoning collection of Birkin bags and whatnot, Najib refuses to lag behind – so he bought himself a jet, an Airbus ACJ320 – bringing the current tally of jets owned by the government to seven – using taxpayers’ money, of course.
 
MP Rafizi Ramli tallied up the costs of Najib’s latest acquisition. Among the costs, not including operational costs, the Malaysian government is to pay an upfront deposit of $20 million (or RM65.22 million, basing on the exchange rate in December last year at RM3.261 when the deal was signed and sealed) and the remainder as monthly instalments for the next 15 years – that should amount to $679,984 or RM2.217 million monthly. As such, the total costs, including service fees (RM1,055,195.40), would arrive to a staggering RM465,411,952.58. Rafizi also pointed out that the Malaysian government would still be subject to currency fluctuations during the whole repayment period and therefore, the final costs would definitely be much higher than currently estimated.
 
Coming back to GST, let me say it again. This country is not ready. Period.

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