Category: Poverty

Petrol price – subsidy, levy or free float?

Blog reader Sam Gopal has this to say:

Anil,
You have been advocating strongly for a STRONG and WORLD CLASS public transport system. At this very time you are asking the Government to lower petrol prices. Lowering petrol prices will only make the public go back to using their cars even more. I think the push is for the Government to maintain a levy of petrol and then use this MONEY effectively to IMPROVE PUBLIC TRANSPORTATION system. Lets not jump into the bandwagon and simply oppose for the sake of opposing.

On the other hand LGE is making ludicrous demands of giving RM6,000 per family using PETRONAS money. Seriously, why can’t he talk about using this money to improve public infrastructure? The very thing China is doing, pumping in USD600 BILLION plus to improve infrastructure, and not handing out money to its citizens just like that, where ther is NO Return On Investment, except paying for more imports with this sort of money handed out.

To clarify, I am not advocating a total peg to the market price. So while a price of around RM1.50/litre might be the real market price price based on the current global market price for crude and the historical trend (as Penang CM Lim Guan Eng has suggested), it might not be prudent to use that price. A price reduction, yes (to provide immediate relief for people affected by the slowing economy), but not a total free float.

I believe in the long run, we need to tax fossil fuels, which are a polluting, non-renewable resource. This could take the form of a small levy to invest in renewable energy (solar, for instance), public transport and other conservation projects. Such a levy should accompany immediate significant improvements in public transport – but so far, all the past promises of improved public transport have not materialised. This levy must go into a special “green fund”, which must be carefully and transparently managed.

Only problem is I don’t think it’s possible to have such a transparently managed fund under this administration; if the fund is not managed properly, the money could so easily be squandered in dishing out inflated contracts to cronies, as we all know. It is risky to talk about pumping in billions into infrastructure when we know there are many “leakages” along the way. Public spending should be for the widest possible public benefit and not just to profit some big-time crony contractors.

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High crime rates? Nah, just change your perception…

First, when the price of petrol was hiked, they told us to “change our life-styles”.

Now, when the crime rate appears to be high, they are telling us to “change our perception” of crime…

… and all will be well.

Najib was saying that our perception of worrying crime rates should be viewed in perspective: apparently Malaysia has lower crime rates than Japan and Hong Kong.

Maybe it was just my perception that my apartment was broken into last year and my personal belongings stolen.

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Time for fuel prices to come down

Latest: Pump prices will be reduced by 10-20 sen from Wednesday

Isn’t it about time local fuel prices are lowered in line with global prices? After all, we haven’t seen much improvement in our public transport with all those government subsidies we were supposed to have saved, have we?

With global prices now down to US$80-85/barrel, our policy planners should reduce prices to ease the effect on the lower income group. A 20-sen reduction would be reasonable for now, bearing in mind that global prices could fall to a more realistic range of US$60-80 in view of the likely slump in global demand.

It was a blunder to have raised the price so drastically in the first place, when all the signs were that the recent price uptrend was the result of excessive speculation.

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Budget Day: Go on, change your lifestyle

Change my lifestyle? Who me? - Urban poor in a kampong in Penang Island

Here they go again, telling you to change your life-style:

Malaysians Should Change Lifestyle To Manage High Oil Prices

KUALA LUMPUR, Aug 29 (Bernama) — It is important for Malaysians to change their lifestyle to help bring down the consumption of non-renewable energy while measures are being implemented to alleviate the hardship arising from cost-push inflation, the Ministry of Finance (MOF) said.

I am not sure what the pakciks and makciks in the kampongs, long-houses, estates, orang asli settlements, low-cost flats and urban pioneer settlements will make of this. And let’s not forget the migrant workers crammed 20-to-a-house. They are certainly not the ones cruising the roads in their Mercs or BMWs and spending RM10 on a cup of latte.

Here’s a response from Justin Choo:

Anil

Makciks and Pakciks, kampongs and long houses, may be far away in the rural areas. You have not mentioned the retired people like me. No more active income. Some still got to feed grandchildren. I live a very, very simple lifestyle. No smoking, no drinking, no gambling, no womanising (too old lah, and also not rich!), always stay at home, eat small breakfast, and two simple meals a day, drive an old red “taxi” Proton Saga, and wear shorts and T-shirt, and slippers. What lifestyle to change? The only change is upgrade! Eat the most sumptious cuisine in fine-dining style? Savour fine wines and caviar, birdnest soup, abalone with scallops, baked lobsters drenched in the finest red wine. Fly to New York, Paris and London for shopping, etc…. How nice.

Let’s see the Ministers leading by example and dumping their petrol-guzzling cars, with all the escorts and outriders, and taking public transport everyday.

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Anwar slams govt for overcrowded general hospitals

Anwar speaking in Seberang Jaya last night

Anwar has sharply criticised the federal government for overcrowded general hospitals such as the one in Seberang Jaya.

He said he was responsible for the construction of the hospital more than a decade ago. “But look at the state of the hospital today,” he said during a ceramah in the midst of low-cost flats in Seberang Jaya last night. “It is so overcrowded and I feel sorry for the poor folks there.”

The rich and the better off have the option of seeking immediate treatment in private hospitals but the poor have no choice but to wait at government hospitals. “If they need heart surgery, for instance, they might have to wait for eight months,” said Anwar. “But by the seventh month, they could have dropped dead.”

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New housing on Penang Island aimed at the wealthy

So how can low-income workers afford to buy homes?

There is real shortfall of affordable housing in Penang, especially on the island.

On the other hand, developers have been falling over themselves to build high-end condos and houses for the upper-middle class, the rich and wealthy foreigners, who are also grabbing choice real estate on the island. For example, at Hillside in Tanjung Bunga, wealthy foreigners are snapping up prime property.

House prices are expected to rise further with the rise in the cost of building materials. But when these new houses and condos are completed, who can afford to buy them? Will we end up with a glut in high-end housing?

What happens to all those factory workers, security guards, and small business owners who cannot afford houses on the island? In the past, they would go for cheaper houses on the mainland, even as far as Kulim and Sungai Petani in Kedah. But with higher oil prices and shrinking real incomes, it doesn’t make economic sense to commute such long distances to work. To make matters worse, if workers were to drive to work via the proposed second Penang bridge, their expenditure on toll and petrol charges – for the bridge segment of the commute alone – could come up to RM500-800/month.

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Superficial “populist gestures are like free meals”

Ever since the new PR government took over Penang, we have seen several populist measures introduced. On the face of it, these measures appear good. Rather than squandering funds or handing them over to cronies, benefits in cash or kind are actually handed to the rakyat. So I agree, it is better than handing them over to the cronies.

But I have a couple of reservations. These are one-off payments that don’t bring lasting benefit. They are also superficial – in that the sums handed over to each of the rakyat are too negligible to make much difference to their lives. It’s like handing bags of rice to the poor. Once the rice is finished, what then? It feels good to hand over goodies to the poor, but once we have handed over these goodies, which are used up in no time, what happens? We invariably forget about the poor – until the next occasion we start feeling generous and charitable again.

Each allocation for superficial populist gestures carries with it an “opportunity cost” – which means it deprives the state of funds for more meaningful future projects that would really empower the poor. Such projects would include affordable housing for the poor, scholarships for poor students, affordable higher education, access to affordable quality health care, literacy programmes, skills training and loans for small businesses.

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38% of households struggling to make ends meet

According to the latest household income survey, the following are the percentages of families in the various monthly household income brackets.

Household monthly
Percentage
income range
of families



< RM 1000
8.6



RM 1001 – 2000
29.4



RM 2001 – 3000
19.8



RM 3001 – 4000
12.9



RM 4001 – 5000
8.6



RM 5001 – 10,000
15.8



> RM 10,000
4.9





100.0
Source: Figures presented by Senator Amirsham A Aziz, Minister in the Prime Minister’s Department, in response to a query in Parliament by Dr Jeyakumar Devaraj, MP for Sungai Siput

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Gloomy outlook for Malaysian economy

Today I was chatting with someone who owns a few stationery shops in Penang and I was told that “business is down” because prices have gone up. Later in the evening I chatted with the cashier at a petrol station and he told me that sales volume was down.

So it doesn’t take a genius to figure out that we are in for some gloomy times ahead especially with a global economic slowdown expected in the second half of the year.

I culled the following from various analyst reports on Malaysia:

  • Global economic slowdown 2H 2008
  • Slowdown in Malaysian exports to US and UK (esp electronics)‏
  • Trade surplus will narrow
  • High commodity prices support palm oil, oil exports
  • Fiscal deficit could soar to 5% of GDP in 2008-2009
  • Possible fiscal pump-priming
  • RM1.5 billion to subsidise rice farmers
  • More imports of rice from Thailand
  • Delay in large infrastructure projects

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Where has all the tsunami money gone?

Still waiting for proper homes

Tanjung Bunga fisherfolk still waiting for proper homes

When the tsunami slammed into our shores, claiming scores of victims, many Malaysians donated generously in cash and in kind. But, four years later, a dozen fisherfolk in Tanjong Bunga, living in a “temporary” longhouse, are still waiting for alternative housing. Where has all the tsunami money gone, they wonder.

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