Electricity tariffs have been hiked by an average of 7 per cent because the government says it cannot afford “subsidies”. But Proton has been enjoying “research grants” from the government.
So who is subsidising whom in the case of Proton?
Source: Proton Annual Report 2010
* Note in the Annual Report 2010
The Government of Malaysia, as part of the Second Stimulus Package under the Ninth Malaysia Plan had within the ambit of the National Automotive Policy (‘NAP’) granted in 2009 a Research and Development (‘R&D’) grant to Perusahaan Otomobil Nasional Sdn. Bhd. (‘PONSB’), a wholly owned subsidiary company. One of the objectives of the NAP is to provide support and incentives to enhance competitiveness and capability of the automotive industry through the development of the latest and more sophisticated technology. PONSB, being a full fledged automotive manufacturer has complied with the requirements and had been allocated funds in the form of a R&D grant.
During the financial year (2010), PONSB has recognised R&D grant income amounting to RM143,688,000 (2009: RM80,656,000) based on R&D expenditure that did not meet the capitalisation criteria, as set out in the Group’s accounting policy (Note 3(d)(iii)).
For the quarter ended 31 March 2011:
Source: Proton's quarterly report to Bursa
Notice the difference in terminology: When it comes to government/public funds for essential services to the rakyat, they call them “subsidies”. But when it comes to government funds provided to the corporate sector, they call them “support”, “incentives” and “grants”.
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Financial supports given to Proton benefit a select group of politically well-connected bumi stakeholders, while subsidy for electricity trickle down to lower price for ordinary Malaysians( bumi and non -bumi), no doubt it is better to eliminate subsidy than to cut supports for the present ruling elite.
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Agree fully.
That’s why we should not buy a Proton car.
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Proton is in trouble.
OSK Research Sdn Bhd has downgraded its call on Proton to “sell”.
The fair value for its stock has been downgraded to merely RM2.
http://star-motoring.com/News/2011/Proton-faces-negative-reaction.aspx
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