Tuesday, October 27, 2009

A response to the 2010 Budget

The Budget 2010 that was announced on Friday, 23rd October 2009 is overall a good budget, especially under this challenging economic condition. The Budget deficit will be reduced from 7.4% to 5.6% and there are no higher taxes. Generally, it does not burden the rakyat and is business friendly. I had the opportunity to gather some professionals for a brainstorming session on the budget and below are some essences of the discussion that I would like to share.


Real Property Gain Tax (RPGT)

The 5 percent Real Property Gain Tax (RPGT) as announced in the Budget 2010 will be effective from January 1, 2010.

It is seen as a counter-productive move in encouraging real property investments among local and foreign investors and less attractive compared to other countries that offer lower RPGT or no tax than Malaysia.

Goods and Service Tax (GST)

The time has come for the Government to seriously consider the implementation of the Goods and Services Tax (GST).

The Goods and Service Tax is more equitable compared to the sales and service tax. However, appropriate measures must be taken to ensure that the implementation of the GST is properly done.

The country’s oil and gas industry although contributing 40 percent of the government’s revenue will continue to drop in future and the GST could be another source of revenue to the government.

The GST has been implemented in many countries. You pay for services and goods. Hence, it is more equitable. Educating the rakyat and ensuring its proper implementation is important. There is a lot of red tape involved in its implementation. Hence, GST should not be introduced in haste.

Green Technology

In view of the current problem of global warming and climate change the PM Najib has announced a fund of RM1.5 billion soft loan in order to provide assistance to companies dealing with green technology and hopefully help to reduce carbon foot prints for the nation.

Apart from the tax exemption on the Green Building Index (GBI) certificate and the RM1.5 billion fund, the government should also consider implementing plastic bag tax. Many plastic bags are non-biodegradable and it causes great harm not only to the environment but also to the human beings. Countries like Ireland has passed a plastic bag tax in year 2002 and within weeks, it showed 94 percent drop in plastic bag usage.

The government should consider implementing before the plastic bag tax an educational program on reducing the usage of plastic bag. There should also be a tax for non-environment friendly practices such as usage of Styrofoam containers. Green taxes will also spur technological innovation.

As for the green technology, there are foods for thoughts by an environmentalist as follows:

1) Energy and water efficiency

· New Green Building Indexed building should result in 40 – 60 percent less energy and water usage.

· The rain water should be recycled and reused via inbuilt technology in the house via storage tanks (underground) and etc.

· Solar panels and photovoltaic cells to generate electricity and heating power

· Wind power whenever possible

2) Indoor environment quality

· Using good architectural design for better natural air flow and directional placing of buildings;

· Use of non-toxic paint and materials and environmental materials.

3) Sustainable building and development

· Using GBI buildings and more eco-friendly and energy efficient buildings.

· Cheaper and more eco-friendly low cost homes.

4) Usage of renewable and recyclable materials

· Using wood materials or waste materials using old tyres for retention wall and more cooler energy efficient homes (smart and cool homes)

5) Using new technologies

Quick build system that is 1/3 less cost, e.g. solar energy, green power, biomass power generation, sewerage systems that generate power, recycle water (drinkable) and produce fertilizer.

SME

The SME is an important component in the engine of growth in the country. Hence, there is a need for continuous support from the government in the form of soft loan or grant for SME entrepreneurs. Although there is a special funding under the stimulus package, the government should introduce a system for SME owners to be able to purchase their own factories rather than paying for the renting of the factories.

There should be more grants so that the entrepreneurs could:

1) Upgrade their equipments;

2) Acquire new technologies;

3) Expand the capacity and productivity of their factories and products and;

4) Research and technology.

Right now, we are told that the yearly fund allocated have often been fully utilized before the year-end.

Creative Industry

A total of RM200 million of fund is allocated for creative industry. This is the first time that such allocation is given. However, the amount of fund is inadequate since there are many fields in the creative industry. The creative industry has great potential and if the government wants to develop the service industry to achieve 65% of the GDP by 2020, then the creative industry is one field that holds great promise. We need to overcome:

1) Internet access problem;

2) Content development problem

Often, you notice the film industry and advertisements in the electronic media have to buy content from overseas. There is little support from the local community and the government for the development of local content in the creative industry.

As for performing arts, there should be room for people who are creative and space for the freedom of expression. If a minority of people likes to impose their own values on local and foreign artists, then we can forget about developing performing arts in Malaysia.

A grant of RM50million for branding is grossly inadequate. Right now, SME can apply for grant when they do promotion overseas as part of their branding exercise. If they do not have a strong local brand name, then no way can they compete overseas. Hence, there is a need to identify the top 30 local brands and establish a strong local brand with government assistance, then only they are ready to go overseas.

There is a lot of red tape in applying for these grants. Hence, the procedure to apply for the grant should be simplified.

Security

Security is a big issue in this country. This is one reason why we have suffered a drop in our competitiveness. We welcome the RM1billion funding to beef up security. However, having extra patrol car and better equipment will not ensure better security. It is the security personnel’s professionalism, dedication, right attitude, less corruption and abuse of power that will improve the security in this country.

Minimum Wage

It is disappointing that the minimum wage issue was not mentioned in the 2010 budget.

I have mentioned in the blog before that Malaysia needs a minimum wage policy for certain sectors that have potential for growth. It will increase productivity and efficiency as producers or employers will have to make these adjustments. Workers will have to change their attitudes towards work and increase productivity to be employed. Malaysia will not be dependent on cheap and low skilled foreign labour to drive its economy.

More than 90 % of countries have legislation regarding minimum wage but Malaysia is not one of them.

There are about 3.5 million foreign workers in Malaysia. Last year, foreign workers remitted RM18 billion to their own countries. If minimum wage is implemented, this amount of money will not flow out of the country. It will definitely boost up local consumption.

5 comments:

呉 和豪 said...

Rakan seperjuangan Dato Seri Dr.Chua Soi Lek

Teknoloji Hijau Kunchi Pnerokaan Perigi baru.

Sungguh gembira utk mengetahui yg pentabiran Krj Malaysia tak ketinggalan, tak da tidur ada sedar
tentang perkembangan dunia senatiasa.
Saya berpendapat Rakan Seperjuangan saya Dr.Chua Soi Lek boleh memainkan peranan untuk menarik pelabur ke dalam bidang yang ada kena mengena dengan Teknoloji Hijau, kerana beliau orang yg ada ambil berat dgn pengekalan dan penjagaaan alam sekitar dalam blognya

Isu Isu Emission of Co2, Kesan green house,pencemaran udara air, kekurangan makanan sebagai adalah isu global.
Saya berharap Negara kita boleh memainkan peranan yg penting dlm pembangunan teknologi hijau sebagai sumbangan kpd dunia.Kalau masa Tun Mahatir Twin Tower didirikan , Projek Bakun dimulakan, ,Tun Pak lah Projek Iskandar di cadangkan .Dato Seri Najib pun boleh lakukan sesuatu yg outstanding dgn memulakan usaha dlm penyelidikan Vertical Farming yg boleh menjadi pemantin dlam Pembangunan Teknologi hijau untuk Malaysia dan dunia seluruh. Negara kita mempunyai kelebihan dlm hal ini, infrastucture yg cukup ,bebas dari bencana yg serious , cuaca ikhlim yg sesuai, saya berharap Dato Seri dan kementerian kementerian yg berkenaaan ambil berat tentang vertical farming.Untuk membawa Malaysia

Education is the main key for advancing Malaysia towards High Income economy
i)considering using English as a medium of instruction at high school (Form 4 and Form5)
ii) Should continue the Look East Policy (Learn from Korea , Japan and Taiwan .
iii) Learn from India , encourage more students to go to India for further study
iv) Vocational educational policy need to be improved to lessen dependence on foreign skill worker.
v) Improve infrastructure in rural area avoid influx to city ,which may weaken our social capital
vi) Provide training to fisherman on fish breeding .Encourage fisherman to breed fish
Apart from that we have to adopt a different strategy as far as power usage is concerned
Encourage manufacturing firm to adopt a power saving measure in their operation, power factor correction bank , using lighting of lower watt consumption , using solar auxiliary source, extend the of JETRROPHA
High income economy alone is not suffice , our biodiversity and cultural diversity need to be value added to conserve our social capital

呉 和豪 said...

To all bloggers
Berkenaan dengan Ekononomi Pendapatan Tinggi (Higher Income Economy) , penekanan mesti lah Diberikan kepada kemampuan utk rakyat untuk mempunyai rumah , kereta , hidup selesa dan sejahtera bukan nya penakanan pada pendapatan wang. Setengah tempat pendapatan tinngi tetapi penduduk duduk dalam keadaan yg tegang , ini tak sihat. Ekononomi Pendapatan Tinggi mestilah juga di ukur dari segi kehidupan , tahu cari duit , tahu enjoy , tahu jaga manusia , alam sekitar , gemari keseniaan dan kebudayaan .Ekonomi pendapatan wang bukan diukur berdasarkan kpd pendapatan wang.

TheLamer99 said...

翻譯翻譯 !!! 菜伯伯的紅毛太利害了 -,-"
本小狗自認讀書少, 看不懂 XD~~

不過話說回來, 菜伯伯我覺得你們除了應該關照SME之外, 更加應該關照打工一族 !!

雖然很多人會說, SME 或得提升之後, 員工工作環境素質, 收入會得到響應的改善..

其實實際情況並非如此, 很多 SME 老闆在獲得SMIDEX 的好處之後並沒有直接讓員工受惠 !!

反而是老闆的汽車房子越來越大, 員工卻窮到10要買一台 viva 都沒有能力 !! 而且我指的是已經服務多年的老員工..

由於目前找工作的風氣都需要文憑, 很多上了年齡的員工都被老闆吃得死死 !!

Low C. W. said...

Imagine of the population has increase over the past 10 year but the monorial system remain the same coverage. Every year so many million spent here and there from the budget but just can't see any amount go into extending the monorial coverage, perhaps we should set the KPI to measure the improvemnet of monorial coverage !

aku dr amin said...

finally you get back what u have lost. gud luck dr

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