Too Good To Be True....But all a BLUFF

The MB haram story : Below is too good to be true. 5 months as CEO of the Perak State government, BN led government was able to bring in investment of RM9 billion for Perak. Wow.

Perak BN govt announces whopping RM9bil investment

IPOH, June 10 — The Perak Barisan Nasional government has delivered on its claim that the state’s investment climate was still robust with the announcement of an enormous RM9bil venture to be undertaken by a South American multinational corporation.

Mentri Besar Datuk Seri Dr Zambry Abd Kadir said today that the investment, which was to set up an iron ore distribution centre for Asia in Perak’s Manjung district, could possibly be one of the state’s largest to date.

“We have already reached the final stages of discussion and we estimate to sign the agreement by next week. We hope everything will go according to plan,” he said after meeting with the company’s representatives in his office here today.

Zambry said that the company was one of the world’s largest in the metal and mining industries and had a market capitalisation of more than RM100bil.

“They have chosen Perak because they say we are the gateway into Asia,” he said. “Furthermore, with our natural port, we have direct access to international waters.”

Zambry said that the RM9bil investment would be for the project’s first phase and the company would pump in a further RM5.6bil in the second and third phases.

“There will also be a total of at least 1,800 direct and indirect employment opportunities for our locals.

“Besides that, the company has also given its word that the project would have a positive spill-over effect for Perak with the creation of more downstream economic activities,” he said.

The centre, added Zambry, would be used to process imported iron ore into pellets before they are distribution across Asia.

“It will also be the company’s second largest such distribution centre after its base in South America,” he said.

A 1,300-acre site has already been earmarked for the project in Manjung, he added.

On the possible negative effects the project may have on the environment, Zambry said that both the state government and the company had taken note of that.

“The company is equally as concerned about environmental impact and has given its word that there would not be negative effects.

“In fact, the built-up size of the centre itself will only take up one third of the total acreage reserved for the project. The remaining land will be used as a buffer zone,” he said.

Meanwhile, Zambry hinted that this was not the last of the many foreign investments in the state.

“As I have mentioned before, I will be announcing them one by one. “There will be many more to come,” he said.

Recently, Zambry announced that the state had amassed some RM700mil in investments over the past three months.

He had also given his word that the BN government was investor-friendly and had promised the people that the current political instability in Perak had not negatively affected the state’s investment climate.

Now this is the truth.... What a shame. Lembu punya susu, sapi punya nama. What a stupid CEO

Zambry puts RM9 billion Vale deal at risk

By Leslie Lau

Consultant Editor

KUALA LUMPUR, June 11 – Datuk Seri Dr Zambry Kadir’s announcement yesterday of a whopping RM9 billion investment in Perak was premature and could jeopardise the deal with Brazil’s Vale, the world’s second largest mining company.

The Malaysian Insider understands the Vale’s management has not even received board approval. Perak DAP chairman Datuk Ngeh Koo Ham also slammed Zambry for what he described as a publicity stunt by the Barisan Nasional (BN) government.

Vale could also face censure from the New York Stock Exchange (NYSE) where the company is listed over the premature announcement, even though the Perak mentri besar did not name the company.

Zambry said yesterday that the investment, which was to set up an iron ore distribution centre for Asia in Perak’s Manjung district, could possibly be one of the state’s largest to date.

Sources told The Malaysian Insider that the company had been in talks with the Pakatan Rakyat (PR) state government for nearly a year before yesterday’s announcement by Zambry.

This was confirmed today by Ngeh, who was a senior executive councillor in Datuk Seri Nizar Jamaluddin’s PR administration, which is still locked in a battle in the courts over control of the state.

“It must be put on record that the said company was in negotiations with the Pakatan Rakyat Perak state government before the latter was immorally, illegally and unconstitutionally overthrown by BN.

“I hope the BN state government will not be continuing its policy of announcing many multi million or billion ringgit projects to paint a good picture of the government,” Ngeh said in a statement today.

Zambry also claimed yesterday that the talks with Vale were in the final stages and that an agreement was set to be signed next week.

However, The Malaysian Insider has learned that Vale has no plans yet for any definitive announcement.

Sources in New York also confirmed that the company had been originally in talks with Nizar and had only recently met Zambry.

It is understood that there are still a number of hurdles to sealing the deal, including land approval and other matters.

Ngeh, who had been a party to the earlier talks with Vale, also posed a number of questions for Zambry regarding the deal.

These include concerns over whether the land in Manjung had already been converted for industrial use from its current tourism use status, and whether an Environmental Impact Assessment (EIA) report had been completed.

There are also question marks as to whether an agreement for the acquisition of the 1,300 acres of land in question had been completed and whether the plot was state-owned or privately held.

“The Perak Pakatan Rakyat Government has a policy to announce the implementation of projects only if it has been finalised and ready to take off as we hold firmly to our principle that the people must not be misled.

“Many have lost money investing in lands surrounding projects announced by BN which did not materialise,” said Ngeh.

GO DAP... welcome Teh Chi-Chang

TOP FINANCIAL ANALYST IS DAP LATEST RECRUIT By Debra Chong

KUALA LUMPUR, Oct 25 — In a comfortably worn blue-collared T-shirt, beige slacks and a hefty backpack slung over one scrawny shoulder, Teh Chi-Chang looked more like your average University Malaya economics undergraduate than the mighty economics consultant that he most assuredly is.

At only 37, the Ipoh-born, taichi-loving Teh is the new economics advisor to DAP secretary-general Lim Guan Eng, replacing Petaling Jaya Utara MP Tony Pua who now has his hands full dealing with national publicity.

Teh's responsibilities are two-fold: to advise the secretary-general on macro-economic policies; and to act as a human resource centre to the party on all economic matters.

Two weeks ago, he conducted a workshop to brief the DAP MPs on the current global economic situation and how it translates to the domestic scene. It was sort of an Economics 101.

"They come from different backgrounds. Most don't have a good grasp of economic terms. Being able to communicate concepts clearly is key to the success of an economic policy as well," he said.

He said: "You can have sensible ideas but if you cannot convince the people, there is no point," and added: "Hopefully it will lead to better policies that enable us to go forward."

Asked if he thought poor communication was one of the reasons for the government's failure to promote economic growth, Teh snorted. "I don't think they are even trying. They are avoiding the issues completely."

Invariably, the discussion turned to the current heated 2009 Budget being debated in Parliament. The former financial analyst, a graduate from the University of Warwick and Cambridge University, was full of criticism against the government's proposed Budget. As expected of a professional, he remained cool-headed and was able to express his objections in a clear and precise manner.

"As analysts, we also start our estimations based on the most current information available," he said.

"The Budget debate is academic," Teh stated. "The government needs to go back and revise on the oil prices."

To sum up Teh's argument: The government's main source of revenue is based on its oil and oil-related exports. If the cost per barrel is high, then the pile of money in its account would be great. However, the price of oil has dropped drastically since the Budget was released 1½ months ago, effectively reducing the amount of income available for spending.

"The problem is the government is practising an expansionary fiscal policy just like they did during the good times," he sighed.

He likened the current gloomy economic situation to a person who has just lost his job.

"There is no more income and you have to rely on your savings. At that point, you have to prioritise your expenditure. What are the necessities and what are the luxuries?" he asked.

Teh suggests that the government focuses on plans that improve on local infrastructure such as drainage and roads and postpone extravagant projects for example the high-speed broadband and overpriced military purchases such as the RM2.3 billion Eurocopters.

"You can postpone it three, four years. While defence is a very important aspect of a nation's security, I highly doubt that anyone is going to invade Malaysia any time soon," he remarked drily.

He urged the government to encourage domestic spending rather than rely on foreign spending. With the entire world hit by an economic glacier, he was doubtful that foreign investors would bother coming in at the moment. They too had to prioritise their survival.

At any rate, what foreign investors looked for are political stability and an efficient government, Teh emphasised.

"Don't get caught up in Anwar's politics," he cautioned the Barisan Nasional government. He pointed out that the BN seemed to forget it only needs eight seats to get a two-thirds majority in Parliament while the opposition Pakatan Rakyat needs 30 more to claim a simple majority.

"It's simple mathematics," he laughed.

He also advised the government to show reason and competence.

"Competency is not shown when the Home Minister says a person was arrested for her own 'protection'," he said, referring to Datuk Syed Hamid Albar's explanation over the recent detention of a Chinese press reporter under the pre-emptive Internal Security Act.

Teh started his new job in September. Prior to that, he was the Asia-Pacific equity research director for utilities and media at Citigroup, one of the world's leading financial institutions. Before that, he was head of equity research for Malaysia. And before that, the executive director and country head of research at Hwang-DBS Vickers Research.

It makes one wonder, what on earth had happened to compel this wonder boy to give up a lucrative career for a position in an opposition political party.

Teh shrugged. He had been an analyst for 15 years. No matter how attractive the promotion, in the end, the work was the same.

"You only have one life and there are so many things to do," he remarked.

As an analyst and a taxpayer, he had been appalled by the government's reckless handling of the economy. The results of the March 8 general election had shown him that others felt the same. He wanted to play a role in bringing about a change.

He contacted Tony Pua and was impressed by the latter's grasp of economics despite being a lay person. Likewise, Pua was impressed by Teh's "impeccable credentials" and urged him to take an active position in the party.

Teh resisted. He wanted to help improve the economy, not play politics. It was not until he met party workers, especially the staff at DAP's headquarters that he was inspired and humbled.

"What struck me was how dedicated the people were at DAP. It was an eye-opener. You know they are not doing it for the money. They are doing it for a cause and a belief."

The Alternative Budget

Just the important points on the just-revealed Pakatan Rakyat's Alternative Budget for the country. The source of this is from Malaysiakini

• Pakatan anticipates a decrease in government’s revenue by 11 percent to approximately RM157 billion as against the government’s projection of RM176 billion due to the drop in commodity prices as well as a decline in GDP.

• Suggestion for a 15.5 percent reduction in government’s operational expenditure to RM130 billion, as opposed to the government’s proposed amount of RM154 billion. In reducing operating expenditure, Pakatan assures it will however make no reduction in government salaries.

• Pakatan believes that a RM10 billion substantial savings is feasible simply by reducing corruption and mandating open-tenders for government procurement.

• Pakatan believes the budget deficit to be 3.0 percent, down from the estimated 3.6 percent for 2009, based on the revised calculation of revenue and allocation for expenditure.

• Education, public transportation, health and housing were chosen as the four areas to be benefit from substantial increases in development expenditure. The allocation for education to be increased from RM8.4 billion to RM11.8 billion in 2009, RM3 billion for housing development as opposed to the government’s RM1.4 billion and RM3.5 billion for improving security.

• Set up the Independent Police Complaints and Misconduct Commission (IPCMC) and re-allocate approximately 30 percent of the police officers from administrative departments to crime-fighting.

• The approved permits for imported vehicles are suggested to be auctioned to highest bidders in order to generate an estimated additional RM1.75 billion to government’s coffers.

• Renegotiation of “exploitative contracts” in toll concessionaires and the independent power producers for a lower cost of services to all Malaysians and savings for the government.

• A temporary reduction in employee contributions to the EPF from 11 percent to nine percent for a period of one year to increase disposable incomes. This would inject nearly RM2 billion of disposable income into the economy for domestic spending.

• Liberalising taxes and import duties on inputs used for the production of food, final goods and farming.

• The formation of a pricing mechanism which is more responsive to fluctuations in market price for crude oil.

• The enactment of a national competitiveness policy and take steps to reduce the “unfair market power” held by state-created monopolies”.

• To revitalise the SMEs sector, it is proposed that the tax rate for SMEs on their first RM500,000 chargeable income be reduced to 18 percent from the current 20 percent. A new partial tax exemption threshold is also proposed and to set at RM200,000 and taxed at 12 percent.

• A review for mega project costing more than RM1 billion to assess their socio-economic viability, affordability and intended impact on national development and employment.

• All government contracts to go through public tender. A saving of at least RM5 billion per annum is estimated to be achieved from this.

Small State with Big Debt (RM1.10 BILLION) - the Malacca Dilemma

I did said during the last general election ceramahs that the state debt to the federal government is at 2006 is RM1.05 billion. Note it's BILLION. I did also say that our state is small but having extraordinary big debt. It is definitely not a CAT (Competent Accountable and Transparency) administration.

My prediction for 2007 debt to rise is surreal. I am no prophet but base on reports from the Auditor General reports any reasonable man would be able to do a variation. A 4.3% rise or a RM1.10 billion for 2007. The debt was due to mega projects in Malacca which the Auditor General's Office had warned in their report at page 46 of the report which states (in Malay) I quote:

"Secara keseluruhannya pihak Audit berpendapat kewangan Kerajaan Negeri adalah tidak begitu kukuh dan hanya dapat menampung perbelanjaan jangka pendek. Kerajaan Negeri hendaklah mengurangkan tunggakan bayaran balik pinjamannya dan mengkaji semula pelaksanaanprojek-projek mega selaras dengan arahan Unit Perancangan Ekonomi, Jabatan Perdana Menteri. Kerajaan Negeri juga hendaklah mengelakkan perbelanjaan pembangunan yang tidak dibajetkan..."


With that in mind, the state government MUST strictly adhere to the EPU directives and not simply spend the unnecessary. With the many unnecessary "spending "projects such as the beautifying of the Malacca River (s0-called Venice of the East), Menara Berputar, Eye of Malacca, MITC projects under PKNM etc, I think there will be a time where Malaccans will continue to suffer with such unnecessary spending by our present state government.

Congratulations DAP for coming up an alternative budget for all Malaysians.

For the benefit for all, here below the brief budget :

DAP 2009 Budget Brief

A. Introduction

The DAP 2009 Malaysian budget brief focuses on the twin challenges of global economic slowdown and our high dependence on oil and gas resources.

(i) Expected Global Economic Slowdown

The International Monetary Fund has announced that there was a 25 per cent chance that global growth would also slump to below three per cent in 2008, which is equivalent of a world recession. The IMF said global expansion over the last several years had rapidly dwindled due to financial turmoil created by the ongoing sub-prime mortgage crisis in the US.

In this crisis which started in 2007, lenders offered loans to higher-risk borrowers who were unable to pay their mortgages when interest rates went up. It has been estimated that this crisis in the US could spawn total losses of $945 billion.

As a result, housing prices in the US are sliding downward very rapidly resulting in a major stress on the US financial system.

Warren Buffett, often regarded as the world's wealthiest man, said the US economy is still in a recession and unlikely to improve before 2009. Optimism among US Chief Financial Officers have plummeted with three-quarters of them predicting a recession at some point during 2008 and nearly 90 percent say the economy will not rebound until 2009.

Therefore, Malaysia's economy cannot be expected to escape unscathed from the global turbulence. The challenge for Malaysia's 2009 budget is hence how to soften the impact of the global economic slowdown and at the same time cushion its impact on the lower and middle income segments of the rakyat.

(ii) High Dependence on Oil & Gas Resources

Based on the latest figures provided by Petronas, Malaysia's government today is even more heavily dependent on oil and gas revenue than ever before. For 2008, oil and gas receipts is expected to contribute in excess of 40% of the Government's revenue, exceeding 37% the year before.

This is a worrying trend in the light of oil reserves which will last for only another 2 decades and Malaysia becoming a net oil importer by 2011.

The relative increase of the oil and gas dependence versus contribution from the other economic sectors effectively means that the rest of our economic activities have not grown by much, if at all. The all-important manufacturing sector which contributes to in excess of 30% of our economy, and employs 30% of our workforce, is expected by Bank Negara Malaysia to grow by a shocking 1.8%.

This also provides the basis for the fact that the rakyat do not feel any richer despite proclamations by the Government that the economy is doing well, as the rise in income from oil and gas sectors has not filtered down to the masses.

(iii) A Budget based on Competency, Accountability and Transparency (CAT)

The DAP Budget will serve as a distinct departure from the current administration's New Economic Policy (NEP) where racial factors plays the dominant role.

The underlying rationale and approach to our Budget is the “Malaysia Economic & National Unity Strategy” (MENU) which will be based on competence, accountability and transparency (CAT). MENU is a policy to bring about national integration through just and equitable economic policies where the poor, regardless of race, religion or creed are given priority. In Malaysia's context, where the bumiputeras comprises the majority of the poor, particularly those from East Malaysia, they will be the largest beneficiaries of our MENU strategy and its programmes.

At the same time, it is imperative for the Government to build new capacities for the future to ensure that our productivity increase is more than sufficient to replace declining contribution from the oil and gas sector. We will also need to strengthen our social security system to ensure that the poor, less fortunate and under-privileged are not left behind in our pursuit for excellence. The wealth of natural resources on our shores must be shared equitably to make sure that everyone gets to benefit and taste the fruits of our land.

In implementing CAT policies, we must shake off our habit of designing world-class blueprints, only to fail miserably in their implementation. The DAP will put in place a robust system to improve productivity and competitiveness of the government's delivery system.

B. Budget Allocation Overview

Finally, we will utilise responsibly all fiscal measures and tax instruments to ensure that the country does not bury itself in debt and to avoid expenditure on mega-projects which are unlikely to bring significant benefits to the population. Our policies are designed to make ourselves competitive relative to our neighbours as well as to nurture dynamic innovative and entrepreneurial Malaysians.

We are anticipating a small increase in government revenue of approximately 3%, largely driven by oil and gas revenues but limited by a decline in corporate taxes to RM154.5 billion. However, we intend to maintain budget expenditure to RM177 billion as per the Government's budget 2008.

However, the allocations for operational and development expenditure will be restructured to increase the efficiency and effectiveness of government expenditure. Operational expenditure will be reduced from RM129 billion to RM120 billion or a 7% reduction. On the other hand, development expenditure will be increased from RM48 billion to RM57 billion or an increase of 19%.

Reductions in the government operating expenditure which has ballooned by more than 43% since 2005 will be achieved through strict enforcement via the policy of competency, accountability and transparency. The effects of such policies will create greater expenditure savings over the next few years.

Savings from reductions in operating expenditure will instead be channelled towards development expenditure which will have a greater economic multiplier impact. The major beneficiaries of the increase in development expenditure in the DAP Budget 2009 will be the education, transportation and health sectors.

As a result of financial prudence, increasing the effective utilisation of the Government's revenue, the Government will be able to reduce its budget deficit from its estimated 3.1% in 2008 to 1.4% in 2009, without compromising its ability to pump-prime the economy in a weak global economic environment.

C. Key Policies

1. Protect Oil Revenues

DAP intends to legislating the use of oil and gas revenue to ensure that a substantial portion of the revenue is spent on education as well as research and development to build the necessary economic capacity for Malaysia, to ensure that the increases in productivity and innovation will more than compensate for the expected decline in oil revenues.

It is proposed that a minimum of 30% of oil and gas revenues be invested in human capital and research and development, while another 20% be used to strengthen the social security for Malaysians who are in need.

A further 10% shall be locked and invested in a oil stabilisation fund in the shape of the very successful Norway's “Petroleum Fund” managed to protect the needs of our children and future generations to ensure that the economy will be able to withstand shocks to the system, especially when oil revenues run out within 2-3 decades.

Legislating the utilisation of funds will also prevent the misallocation of resources to bailout failed projects or other non-productive sectors ensuring transparency and accountability.

2. Investing in Education

RM45 billion accounting for 25% of the 2009 Budget will be allocated for education and training. The focus of the expenditure will be to enhance the qualitative elements of education instead of the quantitative elements. Of 100 new schools to be built, 25 and 5 will be Chinese and Tamil schools respectively to resolve the often severe overcrowding faced by many of these schools.

In addition, teachers will be given an average of 20% increase in pay-scale in order to attract some of Malaysia's best young talents to join the teaching force. This measure to arrest the decline, and increase the quality of teachers who are responsible for the education of our young ones. This increase in pay-scale is expected to cost approximately RM200 million for the 330,000 strong primary and secondary school teachers.

3. Creating An Efficient Transportation System

The development expenditure for transportation will be increased by 122% to from RM6.7 billion to RM15 billion to develop an holistic, efficient and convenient public transportation system for all congested urban city centres in Malaysia including the Klang Valley, Johor Bahru, Melaka and Penang.

This measure will seek long term solutions towards reliance on private motor vehicles ownership rate in Malaysia, which is among the highest in the world. Besides increasing the productivity of Malaysia's workforce, it will at the same time relieve the burden of the middle and lower income groups in the light of rising inflation as a result of significantly higher petrol prices.

A blueprint for the “Valley Circle” rail network will also be developed to improve inter-suburban connectivity, by-passing the congested Kuala Lumpur city centre.

4. Renegotiating Unfair Contracts

The Barisan Nasional Government's policies of guaranteeing highway toll concessionaires as well as independent power producers (IPPs) extraordinary profits with grossly unequal contracts with little or no risks to the latter are the clearest cases of the Government failing to protect public interest.

The impact of these policies are increasingly felt today with rapidly rising toll rates and energy prices. It is hence imperative that the Government renegotiate these contracts to protect the interest of the public within a 6 month period.

In the event whereby no significant headway is made in the negotiations, it is proposed that the Government move to acquire the assets of these entities. The resultant savings will then be passed on to consumers or be diverted to other public interest projects, such as the public transport system.

5. FairWage & Malaysia Bonus

As part of DAP's philosophy, no person or community in need, irrespective of race or religion will be denied the necessary government assistance. In line with this, the DAP will implement “FairWage”, a policy which serves to improve the livelihood of low wage earners above the age of 35, which will at the same time incentivise employers to provide increased employment opportunities.

The FairWage system represents a total reengineering of our existing social welfare systems, and ensures that the most needy within our society will receive the most assistance from the Government. The following provides a summary of what FairWage entails.

1. To increase that take-home pay, workers will contribute a lower rate to the EPF. For with pay below RM900 per month, employee contribution to the fund will be waived while for those with income of not more than RM1,400 per month, the employee's contribution to EPF shall be reduced from the current 11% to 5%.

2. To make them more employable, employers will reduce their rate of contribution to the EPF. For workers above the age of 35 to 55, earning between RM900 to RM1,400 per month, the employer contribution shall remain at the current 12%. For those earning less than RM900 per month in the same age group, the employer contribution shall decline to 10%.

3. To compensate for the above, the Government will give workers FairWage income supplements to achieve a higher level of income. For workers aged 45 and above, receiving monthly income below RM900 per month, they will receive an annual income supplement of RM2,400. For those workers above the age of 35 earning less than RM1,400 per month will receive RM1,600 per annum. An additional 10% on top of the income supplement shall be applied to those who live in the Klang Valley, Johor Bahru as well as on the Penang Island to cope with the higher cost of living.

Of the supplement, a quarter shall be in cash form, while the balance will be channelled into the EPF accounts. By channelling a larger portion into the EPF, it will help the workers save for their future needs.

Separately, a “Malaysia Bonus” of up to RM1,200 will be granted to Malaysians with income not more than RM3,000 per month.

Also, in order to assist the elderly above the age of 60, many who are having problems making ends meet, those qualified will enjoy an the “Senior Malaysian Bonus” of up to RM1,000. These bonuses are channelled into their respective EPF accounts.

The FairWage policy and Malaysian bonus will cost approximately RM9.3 billion to administer. It is part of the proposed programme to share the fruits of the nation's wealth, particular from the oil and gas sector with all Malaysians in need.

In the longer term, more assistance programmes will be carried out in this grant-based mechanisms which are means tested instead of via subsidies which are distortionary in their impact, and often disproportionately benefiting the wealthy.

6. Open, Competitive & Transparent Tenders

It part of our MENU strategy that all Government contracts should be tendered in an open, competitive and transparent manner, in line with our CAT philosophy. All qualified companies shall be provided with equal opportunities to secure Government supply contracts and projects.

To prevent overwhelming disruptions to the current system, this policy which is free from race-based requirements, shall be implemented on a gradual basis, commencing with projects or supply contracts sized above RM10 million for 2009. In view of the challenges brought by globalisation, all tenders shall be made competitive, open and transparent by 2015.

Assuming a conservative 10% savings is achieved via this CAT-based system, this will result in absolute savings in excess of RM5 billion per annum in conjunction with quality improvements on the Government's operational expenditure alone.

7. Open, Competitive & Transparent Auctions

Again in line with DAP's CAT philosophy, besides procurement, all sales of state assets, award of licenses and special rights shall be conducted via open, competitive and transparent auctions. All state land for example, must be alienated and sold under a competitive bidding system to ensure highest returns for the state.

In addition, as a part of our new source of revenue as well as to negate the rent-seeking culture, the approved permits (APs) such as those currently issued for free by the Ministry of International Trade & Industry to a select pool of “businessmen” shall be auctioned to the highest bidders instead.

Based on an estimated 70,000 APs issued per annum and a conservative RM25,000 market price, the auction will provide an additional RM1.75 billion to the government coffers.

8. Seeding Creativity & Innovation

The transformation of the Malaysian economy into one that is knowledge-based will not succeed without the critical ingredient of innovation and entrepreneurship. Therefore it is proposed that the Government set up a new RM250 million seed fund, STARTUP where we will act as a matching co-investment fund with reputable private investors who will assist in the mentorship of the start up companies.

To encourage private investor participation, losses incurred by such investments shall be tax deductible from the investors' individual or corporate income tax. To further boost entrepreneurship, start-ups shall enjoy full tax exemption on their first RM200,000 chargeable income for each of their first 3 years of assessment.

9. Revitalising Malaysian SMEs

Small medium enterprises constitutes approximately 99% of all enterprises in the country. However, their proportionate importance in terms of tax contributions to the Government has clearly declined with the increased dependence on oil and gas revenue.

With substantial increases in the cost of raw materials as well as steep increases in the price of fuel and electricity, many Malaysian SMEs are facing difficulties in maintaining competitiveness.

To revitalise the SME sector, and to assist many SMEs whose counterparts in many countries in the region enjoy significant tax advantages, it is proposed that the tax rate for SMEs on their first RM500,000 chargeable income be reduced to 18% from the current 20%.

In addition, a new partial tax exemption threshold will be set at RM200,000 and taxed at 12%. This means that a SME with a chargeable income of RM900,000 will be taxed at an effective rate of 18%, in line, particularly with its competitors across the causeway in Singapore. This measure will help make Malaysian SMEs to be more competitive and at the same time attract more SMEs to set up business in Malaysia, creating more employment opportunities.

10. Restructuring Personal Income Taxes

DAP is proposing a 1% reduction of the top tax bracket to 27%. More importantly however, there will be a revision and a simplification of the progressive tax brackets which will result in significant reduction in taxes by all.

Most importantly, to assist Malaysians to cope with the rise in living expenses, particularly in urban areas, the first RM15,000 chargeable income will become tax exempt, with the subsequent RM15,000 taxed at 7%. Currently, only the first RM2,500 is tax exempt while the next RM2,500 is taxed at 1%.

Based on the new tax structure, a married worker with RM3,000 pay per month, a full-time housewife who looks after 2 young children will pay no taxes, whereas under the previous tax structure, he will be expected to pay between RM55 to RM445 depending on his insurance premiums and medical expenses for his family, including parents.

11. Introducing Green Taxes

The rate of global climate changes is accelerating and it has become absolutely necessary for Malaysia to play its part in protecting the environment. Hence, a “Green Tax” is to be implemented in 2010 whereby a “carbon tax” is charged at RM25 per tonne of CO2 equivalent, with the exception of methane emissions from the agricultural sector as well as special exemptions for carbon intensive businesses which adopts global best practices on emissions.

In addition, a 5% severance tax shall be imposed on the extraction of metals and forestry products in the country. However, companies which secure certification from The Forest Stewardship Council (FSC) accredited certification bodies will be granted the severance tax exemption for promoting responsible management of the forest.

12. Increasing Women Workforce Participation

Women will also benefit significantly with the proposed extension of paid maternity leave from 60 to 90 days if they have worked for at least 180 days prior to delivery with the employer. Their pay for the 3rd month will be shared equally by both the employer as well as the government.

This together with other complementary measures such as increasing childcare facilities in the workplace will play their role in strengthening the bond between the mother and child, promoting strong family values, while at the same time, encourage more women to join the workforce.

As at 2004, Malaysian women participation in the work force stands at 47.3%, significantly below that of our neighbours, Singapore and Thailand at 53.9% and 64.2% respectively.

13. Reviving the Information Communications & Technology (ICT) Sector

When the Government launched the Multimedia Super Corridor (MSC) project 10 years ago, it promised to make every effort to grow and support local MSC status companies. However, despite the rhetoric, the Government being the largest consumer of information technology services in Malaysia has not given preference to these companies.

It is therefore important that in this proposed budget, Malaysian MSC status companies be given specific preference in tendering for the Government IT-related contracts to help nurture these companies into successful regional players.

14. Participation of Civil Society

Finally, this budget represents a budget which seeks active involvement from the civil society. Instead of attempting to tackle all issues on its own, which the government will not be able to competently and effectively, sizeable grants will be made available to specialist non-governmental organisations (NGOs) to promote, educate and run various social causes and programmes.

RM240 million has been set aside as partial or full grants for NGOs to pursue environmental causes, eliminating poverty, promote healthy living, managing women issues or assisting the disabled, to be disbursed over the next 5 years.

A Threat?

Is Najib issuing a threat? Saying in a press conference that the government will withdraw the fuel rebates if the people don't appreciate it. I think he really look stupid issuing such statements. The Star reported that he appeared to be annoyed. My guess is day by day, the Prime Minister-in-waiting seats gets hotter. I remember in the 90s the Deputy Prime Minister seat is the hottest and many DPM fell, started with Musa Hitam (now Tun), the late Ghaffar Baba (also Tun), and of course DSAI.

Maybe Najib should just apologise to the public. Remember the minerals and oil in the land belongs to the people, not the government. So he is rather childish for a DPM to make such statements.

The Star reported as follows :

Najib, who appeared to be a bit annoyed, said the people must understand that for every litre, the price was subsidised 30 sen.

He also said they have forgotten about the RM625 rebate given to owners with vehicles up to 2,000cc that was announced in June.

“The rebate, if translated, will cost between 35 sen and 40 sen a litre. If the people do not appreciate the rebates, it is better for us not issue any more in the future.

Good One

A letter written by Disgusted Malaysian found in Malaysia-Today a comparison between Malaysia and Australia.

Make sense, a lot of sense....


Malaysians have been deceived for so long that we have been subsidized for our petrol. In fact we have been paying more than our fair share for our petrol. How is this? We need to look at the big picture of petrol prices, the price of cars, toll charges, per capita income and the cost and efficiency of public transportation.

I am glad that our Minister of Information made a comparison of petrol prices in Malaysia and some Scandinavian countries. Let me make a simple comparison between Malaysia and Australia to show that we have been cheated all these years.

1. Per capita income of Australia (USD35,990.00) is more than 6 times that of Malaysia (USD5,490.00) in 2006. (Source: World Bank)

2. Starting pay of a graduate in Malaysia RM2,500.00 per month and in Australia AUD4,000.00 (RM12,000.00) per month.

3. Price of one liter of petrol in Malaysia RM2.70 and in Australia AUD1.75 (RM5.25). The price differential is RM2.55 a liter.

Assume we buy a similar new car in both countries, a 1.8L Honda Civic Auto cost RM110,000.00 in Malaysia and AUD24,000.00 (RM72,000.00) in Australia. That is a difference of RM38,000.00. If we divide the price differential of the car with the cost of petrol, 38,000/2.55=14,900 liters of petrol. This means that an owner of a Honda Civic will upon consuming the first 14,900 liters of petrol is actually not getting a single cent of subsidy from the government.

The cost of a new Honda Civic in Malaysia is equivalent to 44 months salary of a fresh graduate. In Australia it is 6 months salary of a fresh graduate. It is a known fact that according to our previous Minister of MITI she openly admitted that the duty on cars in Malaysia is imposed not to protect Proton alone, but that the government is now dependent on car duty as an important source of government revenue. So where has the trillions of dollars collected all these years gone?

I had recently returned from a driving holiday in Australia. We drove approximately 8,000 km from Melbourne to Perth and return, and guess what? I did not have to pay a single cent in terms of TOLL!!!!!!!! The road condition is in no way inferior to that of our Malaysian roads.

The state of public transportation in this country is a joke and needs no further elaboration. The government will never improve public transportation as this will force Malaysians to buy the national car!

If we look at the big picture it looks as if we Malaysians have been taken to the cleaners by the Malaysian government all these years without realizing it. We have been conned by the Malaysian government into believing that the government has been so kind to us by subsidizing our petrol. It is especially sad if we compare car prices with the developed countries in addition to the income level. It is time that the present Minister of MITI take a good look at the national car policy and correct the wrongs after all these years. The man who is responsible for this atrocious Malaysian car project is no longer in power, so fear not, Mr. Minister and do the right thing for the citizens of this country.

Disgusted Malaysian

Another Reason Mengapa Minyak Tak Perlu NAIK

I got permission to cut-paste this superb article by Humble Voice on the recent petrol hike. Reading this, all the more petrol/oil/diesel price should not go up.

THE RM56 BILLION RINGGIT QUESTION

(Also posted in Malaysia-Today)

I am referring to the article in Malaysiakini: Pump price at 'market levels by August'.

First of all lets get some basic facts right.

Firstly Malaysia is a net exporter of crude oil. So the government did NOT subsidize our petrol. The RM56 billion ‘subsidy’ per year is the extra amount that the government would have earned if it had exported all of our oil production. There is no 'spiralling bill', the government did not lose any money because it is our own oil and we are not paying anybody for our oil supply.

Secondly – when the government scrapes the so called ‘subsidy’ that it did not pay any money for in the first place – it is forcing the rakyat to buy back our own resources at a much higher price. Each and every one of us will suffer because of this, especially the poor.

The hike in oil prices has not caused hardships to our government. On the contrary it has already earned record profits for Petronas. And now our government is going to squeeze even more profits by squeezing the rakyat. Put it bluntly, the Barisan Nasional government will get filthy rich form the blood money of the rakyat.

Now the 56 billion ringgit question. What will the Barisan Nasional government do with the RM56 billion windfall per year? We already suffered a price hike on our petrol almost a year back, and have we seen any accounting on what has been done with the extra money that the government collected? I remembered that there were some talks of using the money to improve our public transport system. But so far I have only heard about the ailing KTM, failing bus companies and government cutting subsidry to Rapid KL.

Don’t you feel suspicious of what is going to happen to this hefty sum of money? RM56 billion is a mind boggling sum of money, it is almost enough to build 5 Putrajaya according to the official figure. The last thing I want to see is for the money to end up in political machines and lining the pockets of politicians and their cronies. I hope our Pakatan Rakyat representatives will see to it that every sen of it is accounted for.

I am not against raising the price of petrol. It is a matter of urgency that we cut our dependency on fossil fuels now as it is the main source of green house gas that is causing havoc in our weather patterns and ecosystems.

Even if global warming and destruction of our ecosystems is not your concern, you still have to consider the fact that crude oil price is not going to come down. Some analysts even projected that crude oil may reach USD 200 per barrel by 2012. Have you asked what is going to happen to our economy when our oil reserves run out in 5 years time?

Don’t you find it amazing that nobody is talking about these pressing issues now? This whole issue about oil subsidy is completely beside the point. The way it was phrased as if it was costing our government a hefty sum of money was completely misleading. The more pertinent point is really how we can best make use of the last of our rapidly depleting resource to safeguard our future. I have not seen any sensible policies regarding this from the Barisan Nasional or Pakatan Rakyat camps as yet. It is already sparking riots in many parts of the world, including our close neighbors, and yet nobody here seems to think that we have a problem.

I don’t think we can look towards our government for answers. Our so called ‘leaders’ are engrossed in fighting and bringing each other down, unscrupulously stirring up racial sentiments for their survivals. They never have the track records of putting the interest of the rakyat in the forefront anyway. The whole political scene is simply disgusting and depressing beyond words.

This is the time that ordinary people like you and I have to come forward and take charge. Count ourselves lucky that we have a 5 years grace period to get ready for the end of cheap oil. But we need to make sure that every ounce of our resources is used wisely for the survival of our future generations. That can only happen if we, the rakyat, unite as one single voice to demand for the right things to be done.

There are a lot we can do together, and we are not isolated either. There are already over a million environmental and social justice organizations around the world that we can work with right now. The fisrt step is to realize that we have a problem in hand. This is not just any ordinary problem. What we are facing is a problem of epic proportion that is going to require the cooperation of the whole world.

Oil Oh Oil...

An excellent piece of work by Humble Voice which I have cut and paste the whole works. Enjoy reading it and you will have at least a bird's eye view on how much oil money to the government. While reading it, I began to have curiosity in my mind as to "mana wang itu"

The Mystery of Our Vanishing Oil Money

When common folks talked about our oil revenues we usually think of Petronas and the government as being the same entity. That was my perception when I wrote my last article: The 56 billion ringgit questions, but little did I suspect that I would have to completely reconsider my understanding almost the moment I posted the article.

I posted the article on 3:45pm June 4, and moments later I received an SMS that petrol price is going to go up. I was about the chuck the SMS away until I logon to Malysiakini and confirmed that the news was true indeed.

I was shocked by the suddenness and quantum of the increase as Najib’s reassurance of no price hike was still fresh in memory, and Shahrir was only hinting of a price adjustment in August the day before. My first reaction was that Pak Lah has just hammered the last nail in his own coffin.

I am not an economist by any means, but I came from a poor family and I have been through the years where every cent counts. It was completely baffling to me why Pak Lah would make such a sharp increase in petrol prices while the whole country was still reeling from the pain of the recent hike in the prices of food and other essential items. The combined effects are going to cause so much hardship to so many people that I seriously doubt Pak Lah is going to survive the fallout of it. And it got me thinking hard...

The Mystery of Our Oil Money

Let’s get back to the mystery of our oil money. After many hours of research and considerations – I came to realize that the relationship between Petronas and the government is much more complicated that it looks on the surface. The two are not the same entity after all; and by some recent announcements I think there could even be open hostilities between them. Read:

• Petronas could go bust by 2018 if all its profits are handed to the Government…
• Petronas should not be made the scapegoat for the fuel price hike

One key understanding is that although Malaysia is a net exporter of crude oil, our products are of very high quality and are primarily for export while we consume lower grade oils that are mainly imported from the Middle East.

While the exploration, production and export our crude oil are handled almost exclusively by Petronas, the import side is a bit more complicated. The importing and retailing of petroleum products are carried out by companies like Shell, Exxon, Petronas, etc. These companies are mandated by the government to sell below cost, thus they are compensated for their losses by the Government in the form of subsidy.

Yes – our government does subsidize our petrol. But it also receives money from Petronas in the form of royalty, taxes and dividends. Petronas is reported to have contributed 52.3 billion ringgit to the government for the financial year ended March 2007.

Is that a fair contribution to the government? I will be eagerly waiting for Petronas supposedly full disclosure. I don’t give much hope that the full disclosure will reveal details like why some big shots get to live like a king with private jet and helicopters, but it should give some basis for some intelligent guess-analysis.

How much is the Government getting from Petronas?


The graph above shows Petronas contribution to the government over the past few years. I plotted it along with the yearly average crude oil price. The yearly contribution was obtained from Hassan Marican interview in RTM1 reported in Guang Ming Daily and the average oil price from EIA. As you can see Petronas contributions go up nicely with the price of crude oil, as most of us would expect.

What will be Petronas contribution for this year? That will be everybody’s guess. Would it be 70 billion? 80 billions? Whatever it is, it seems that Petronas is mightily reluctant to cough out its profits to the government.

How much is the petrol subsidy costing our government?

Our daily crude oil consumption is 501,000 barrels, or 183 million barrels per year. Each barrel is 158 liters, and typically yields 73.8 liters of petrol, diesel and other by products after refining (data from EIA).

Our yearly petroleum consumption is thus:
183 million barrels X 73.8 liters/barrels = 13.5 billion liters.

At the current crude oil price of 130 USD per barrel, the market price is RM 3 per liter for petrol (according to Shahrir).

Our government’s yearly subsidy on petroleum can be calculated as follows. For lack of data I will assume that the cost price of petrol and diesel is the same.

Before Price hike:
The average price of petrol and diesel =
 (RM1.98 + RM1.52) /2 = RM 1.75

Subsidy per liter = RM 3 – RM 1.75 = RM 1.25
Total Subsidy = RM 1.25/liter X 13.5 billion liters = RM 16.9 billion

After Price hike:
Average price of petrol and diesel  =
  (RM 2.7 + RM 2.52) / 2 = RM 2.61
Subsidy per liter = RM 3 – RM 2.61 = RM 0.39
Total Subsidy = RM 0.39/liter X 13.5 billion liters = RM 4.0 billion

What do all these figures means?

Firstly, since Pak Lah took helm, Petronas has contributed RM 146.5 billion to the government. Petronas has been in operation since 1974 and contributed a total of RM 336 billion to the government. Pak Lah’s first 4 years in office received 43.6% of Petronas 35 years of total contributions. It is more than what Mahathir received in 20 years, inflation adjusted. And it does not even include this year’s contributions!

Is your reaction that of disbelieve? Are you wondering where have all these money gone to?

Mahathir is known for his opulence and extravagance and have created monsters like Twin Towers and F1 circuits to match his distorted ego. But what have Pak Lah done that is worthy of being mentioned? To give you a perspective, it costs RM 11 billion to build Putrajaya, and the order of RM 20 billion to build all our toll roads. Whatever happened to this mind boggling 147 billion ringgit? It seems to have just vanished in thin air. Something must be seriously wrong somewhere.

Now the 56 billions petrol subsidy quoted by Shahrir. My own calculations indicate that it should cost the government RM 16.9 billion. My calculations do not include subsidy for gas, but would it amounts to the RM 39 billions difference? Either my calculations are completely wrong or Shahrir is bullshitting. I would appreciate if somebody can verify my calculations.

My calculations show that with RM 52.3 billion contribution from Petronas the government should still be making a net profit of RM 30+ billions. And the recent price hike is going to bring extra RM 17 billions to Pak Lah’s coffer. Is it conscionable for the government to make such an obscene amount of money at the expense of such widespread suffering of the people?

I am shock beyond words by what I discovered today. The level of corruption and mismanagement by the Barisan Nasional government is way way beyond than my wildest imagination. It sickens and disgusts me to the point that I just want to cast the whole Barisan Nasional government to hell right away. Right now I will not hesitate for a moment to lend my support for Pakatan Rakyat to step in to take over the government.

Do I believe that Anwar is able to bring down the price of petrol and give Sabah and Sarawak 20% oil royalty? I have no doubt that he can, if he managed to gain back the control of the oil money. I do not agree with his oil policy, but that's a separate issue altogether. At least with Pakatan Rakyat there is hope that ordinary people like us is able to participate to bring about the right changes.

This is the time for us all to wake up. If the level of suffering and darkness of the current moment is not enough to wake you up, I don’t know what will.

Look who is suffering now? We all are. Does the 50 years of racial politics bring about the supremacy of any race? I hope our sad state of affairs is convincing enough to show us that racial politics can not work. It never will.

We have to forget about race, religion and other trivial differences and stand united as one. This is the time to exercise our collective power, our makal shakti, this is the only strength that we have to cast out the slime bag power mongers that are hell bent to destroy each other and bringing down the whole country with them.

How to Change Our Ways

I received an e-mail here from a friend. Though I have read this earlier, I thought I may want to post it here. IT seems hilarious but it is true. An average income of each family is RM3,000.00. That depends on whether one is working and the other is not OR a combine salary of all both husband and wife of RM3,000.00. Mind you, that many families monthly income does not even reach RM3,000.00.

"Okay, let's start rolling with a family which has
Papa, Mama, 1 daughter and 1 son. Ngam-ngam ....

Calculation starts...

Electricity and water bill: RM100 (not forgetting that electricity tariff will be up soon)
(No air-con, No home theatre, No water heater ... ok?)

Phone bill (Telekom): RM50

Meals for a happy family: RM775 (maybe got to be lesser)
(3 meals on RM25/day, RM25 for 4 persons...?)

Car repayment: RM400 (that is because it is a Proton)
(A proton saga aeroback, 7 years repayment)

Petrol (living in city, traffic-jam): RM300 (that is because it is a Proton)
(go to work, bring son to school, only can afford one car running)

Insurance: RM650
(kids, wife and myself)

House repayment: RM750
(low cost housing repayment for 30 yrs,retired still have to work to pay!)

Tuition: RM80
(got that cheap meh? i don't think so)

Older children pocket money @ school: RM20
(RM1/day, eat bread?)

School fees: RM30
(enough ah?)

School books and etc: RM100
(always got extra to pay in school)

Younger children milk powder: RM50
(cannot have the DHA, BHA, PHA one, expensive)

Miscellaneous: RM100
(shampoo, rice, sauce, toilet paper)

Oh wait!!! I have to stop here, so...
No Astro, no movie @ cinema,
no DVD, no CD,
no broadband,
cannot KFC, cannot McDonald,
cannot go Park walk during weekend (petrol expensive),
no chit chat on phone with grandparents, and etc...

Let's use a calculator to total up... WALAO EH! Shit! RM3,405 already...
EPF belum potong, income tax lagi........

How to survive lah tuan-tuan dan puan-puan sekalian ???
Our Deputy Prime Minister asked us to change lifestyle?
How to change? Don't eat? Don't work? Don't send children to school and study?

Besides that, I believe in Malaysia population, there are millions of rakyat Malaysia which still don't earn RM3,000/month! !!

What is this? Inilah Malaysia Boleh... sorry .... it should be Malaysians Boleh because we're still alive and kicking!!

Our politicians must be mad!!!! "
Please forward and comment boleh or tak boleh. No wonder so many Ah Loong around lah....

Price Hike in August?

Yup that was what the Minister is saying. Are we ready for the coming hike in August? It is now in everybody's mind, how much will it cost? Now per litre is RM1.92. Will it go up by RM2.20? Some say RM2.50. Be that as it may, it will definitely past the RM2.00 mark. There goes an economic turmoil.

Boleh tahan ke?

Malaysia Ready?

So is our economy improving? Can we withstand the global economic pressure and the threats of inflation and recession?

KLCI hit by US recession fears

©Business Times (Used by permission) by Francis Fernandez Before the new year, there were thoughts that the market could decouple from the US; it hasn't turned out to be true, says Aberdeen Asset Management SHARES slumped on Bursa Malaysia yesterday on heavy selling pressure as other markets around the world retreated amid fears of a US recession and global economic slowdown. The benchmark Kuala Lumpur Composite Index (KLCI) dropped sharply for the third time in as many trading days, dashing hopes that the domestic equity market would be able to decouple from broader markets in the US, Europe and Asia. "Before the new year, there were thoughts that the market could decouple from the US; it hasn't turned out to be true," said Gerald Ambrose from Aberdeen Asset Management. Decliners buried gainers by 14 to one, pushing the index down some 3.8 per cent, or 54.12 points, to end the day at 1,354, its lowest closing so far. Losers were across the board as fears of recession and systemic risks in the global financial market spooked investors. British American Tobacco Bhd was the biggest loser for the day, dropping RM1.50 to RM40.50 a share; followed by DiGi.Com Bhd, which fell RM1.40 to RM22.60. Plantation stocks and favourite heavyweights such as Malayan Banking Bhd (Maybank), Tenaga Nasional Bhd (TNB) and Gamuda Bhd also took a beating. Maybank and TNB each closed 40 sen lower to RM11.20 and RM8.95 respectively, while Gamuda fell 37 sen to RM4.68. Planters IOI Corp Bhd and Asiatic Development Bhd were not spared, falling 50 sen to RM7.35 and 60 sen to RM7.85 respectively. A local fund manager, who declined to be named, said the fundamentals of the domestic market were intact, but it would have to absorb structural downtrends in the US and China markets before it could find its footing. A fund manager at AmanahRaya-JMF Asset Management Sdn Bhd said it would be hard to decouple, and that risk levels had heightened across the board. "Even in the futures market, we are seeing volatility," he said. The KLCI futures contract for January went as low as 1,296 points before closing the day at 1,335. It opened the session at 1,345 points. In Singapore, the benchmark Straits Times Index fell as much as 5.8 per cent before recovering to close 1.73 per cent lower. Jakarta stocks went down 7.7 per cent to a near four-month low. In Japan, the Nikkei 225 lost 5.7 per cent in its biggest drop in a decade, while the Hang Seng index in Hong Kong fell 8.7 per cent. In India, trading on the Mumbai Stock Exchange was halted for an hour when the market fell 10 per cent within minutes of trading. Meanwhile, oil prices have also dropped on fears that a US recession would cut energy demand. The Brent crude fell US$1.08 (RM3.56) to US$86.43 (RM285.22) a barrel yesterday, while US crude was down US$1.01 (RM3.33) from US$87.68 (RM289.34) on Monday.