2015: A Challenging year

This year is the year of the Goat, a symbol of meek and timid animal. It is often associated with harmony, peace and tranquility. However, what we have observed of late is a series of unexpected events and tragedies with casualties. Hence, 2015 looks like a year that will not be lacking of surprises with financial instability and even the possibility of economic turmoil.

The dramatic drop in oil prices from US$115 to less than US$60 a barrel will be the biggest financial challenge that the Malaysian Government has to confront. Oil accounts for one third of the government coffers. The dramatic drop of revenue and the decrease in dividend from Petronas will be a major negative impact on the Government’s revenue. While the Government may save from oil subsidies, this will not be enough to cover the shortfall from the oil revenue. Hence, will the 2015 development budget be reduced or we may have to trim the expenditure budget. Trimming the development budget will affect growth and reducing the operating expenditure will be a tough call as it is not easy to trim the fat of the Government’s machinery.

China, Europe and Japan slowdown will negatively impact our trade and export. Commodity and oil palm prices will drop because of lack of demand. Depreciation of the Malaysian Ringgit against the US currency will benefit some export sectors that receive their payment in US currency. However, some of the import goods may become more expensive.

While the GST is supported by the majority of rakyat and is a positive development in financial taxation system, it will however lead to increase of inflation of 1-2 percent. Technical glitches will appear in the early stages and it is our fervent hope that our government agencies, especially customs will really exercise caution in their hand holding exercise during the early stages of GST implementation. 

The politics of race and religion will continue to rear its ugly head. While the voice of moderation is heard loud and clear, political leadership and management are urgently required to manage these voices of moderation against the minority of extremists. We should not let the minority of extremists hold us to ransom. Hopefully sanity, rationality and moderation will prevail.

PAS will not give up on its implementation of Hudud. Rakyat will be waiting to witness how DAP and PKR will implement its agreed to disagree with PAS on Hudud.

Merdeka in a Multiracial, Multicultural and Multi-religious Malaysia

We are happy that all Malaysians celebrated 57^th anniversary of Merdeka. Looking back, we have done well especially in physical and economic development. One must admit that it is not easy to govern a multiracial, multicultural and multi-religious country like ours. It is a fine-balancing act of catering to the needs and sensitivities of all races. Unfortunately, not many Malaysians are aware of this or only pay lip services. Hence, race and religion continue to be a hot topic. It is unfortunate that often such extreme views are given a lot of space in media. Hence, it is a bad news of race and religion that seems to get all the unwanted prominence.

All Malaysians must accept the fact that we are entitled to our own freedom of expression, our thoughts and opinions but once this infringes the right of another individual, then we are actually crossing the boundaries of freedom of expression. Anti-Malay, anti-Chinese bashing or any form of religious bias should be history and not a daily-stapled diet of any rightful minded Malaysian.

The economic transformation program launched by the Prime Minister seems to bear fruits. From 2010 to 2014, Malaysia has achieved better economic growth than most other Asean countries. One must not be lured into complacency as Indonesia and the Phillipines are fast catching up with Malaysia. Economic growth must also generate employment, equal distribution of wealth, reducing the income gap between the rich and the poor without sacrificing the environment. While we welcome FDI, Malaysia should continue the policy of economic liberalization, coupled with training of more talents and reducing talent leakage.

We should continue to attract investment that has multiplier effect so that all Malaysians will have a feel good factor. Political, racial and religious rhetoric and tension at times will not help our attempt to attract FDI and also in retaining talents. Of greater concern is the education system where the standards of English, Maths and Science seems to go downhill. While we may be aware of it, but we lack the political will to relook at the whole education system. The standard of education system has not tallied with the nation’s growth.

Reiterates call for minimum wage

Message by MCA President Datuk Seri Chua Soi Lek in conjunction with Labour Day

This Labour Day, MCA pays tribute to all workers who in one way or another have contributed towards the nation’s economic growth.

At the same time, we reiterate our call for the establishment of a Minimum Wage Council which would look into gradual implementation of minimum wages according to industries. Minimum wages will ensure that all Malaysians will enjoy a decent standard of living, thus enabling Malaysians to budget steadily and regularly for the family’s monthly expenditure.

Implementation of a minimum wage policy revolves around its effect on employment, productivity, inflation and the country’s competitiveness. It will galvanise changes in the economic model.

The concerns that deployment of minimum wage would make Malaysia a more costly place to do business thereby resulting in a drop in foreign investment is only valid if a blanket country-wide minimum wage is enforced irrespective of sector. However, this concern can be overcome if minimum wage is introduced in high growth sector especially those heavily dependent on foreign workers. This should be accompanied by the government providing incentive like grants or loans to encourage industries to invest, to embark on capital expenditure and training to increase productivity.

Minimum wage should not only be viewed as being aimed at improving the standard of living of workers but also as the driver of productivity and innovation. With a reasonable income, productivity will increase as workers will have a better attitude towards work as their income enables them to sustain their living. A change in attitude by the workers coupled with training and technological investment, will help Malaysia gradually wean off its addiction to cheap and low skilled foreign labour to drive its economy.

To cite an example, the oil palm industry faces shortage of workers which results in employers relying on foreign labour. However, if more research and development are intensified to come out with efficient mechanical harvesters for the industry, this will ensure higher outputs and reduction of foreign labour.Some trial results have shown that with mechanization using the motorized harvesting pole, the workforce for harvesting could be reduced by half, land-to-labour ratio could be doubled, productivity tripled and the harvesting cost cut by 75%. However there is reluctance in heavily investing in R&D to improve and make the machine afforadable as it will be easier to engage foreign workers.

The unemployment rate of Malaysians will be lowered as minimum wage will attract the locals to participate in the labour market and with the reduction of foreign workers it will help reduce the financial remittance overseas by foreign workers that has increased to RM18 billion.

While the private sector may see diminished profits initially when minimum wage is implemented, through innovation and higher productivity, there will be more returns in the long run. It is MCA’s hope that the government will seriously look into setting up a Minimum Wage Council for the progress of the nation and its people.

Datuk Seri Dr Chua Soi Lek
MCA President

-MCA online-

Seminar on Government Transformation Programme

This morning MCA has successfully organized a seminar on Government Transformation Programme (GTP). About 200 representatives from the various Chinese Guilds & Associations and MCA Leaders attended the face to face interaction with Y.B. Datuk Seri Idris Jala, Minister in the Prime Minister Department. Below is my speech at the seminar:

Thank you Y.B. Datuk Seri Idris Jala for your presence.

It is indeed a great honour that we have with us today the “Guru” himself Datuk Seri Idris Jala who will give us a better insight to the much talked about Government Transformation Programme (GTP).

GTP is one of the four (4) Pillars to drive change. The objective of GTP is two-folds – first, to transform the Government to be more effective in its delivery of services and accountable for outcomes that matter most to the rakyat; and second, to move Malaysia forward to become an advanced, united, and just society with high standards of living for all. This is in line with the national mission of achieving Vision 2020 - for Malaysia to become a fully developed nation.

The 4 Pillars are:-

• 1st Pillar: 1Malaysia, People First, Performance Now
• 2nd Pillar: GTP
• 3rd Pillar: New Economic Model
• 4th Pillar: 10th Malaysia Plan

It also makes the Government more accountable for the outcomes of policies that mattered most to the rakyat.

We are all here because we want t o know about the transformation plan of the government. To be precise we want to know what is in store for the Malaysian rakyat irrespective of race or creed.

The political landscape is different now and the people are more demanding and are crying out for transparency, fairness and for being able to compete on a level playing ground.

We have to change to suit changing times and cope with situations to stay relevant. There is no room for those who are still in denial mode.

The government must bear in mind that when we transform or initiate changes, it should create an impact to the lives of the people which we represent.

It should not be paying mere lip service and the GTP should not be another public relations exercise of the government to look good.

As the Prime Minister has rightly pointed out at the launch of the GTP Roadmap in January that it is the people who will decide via the ballot box if the GTP does not achieve its objectives and that the Government would be held accountable for its promises.

With those words coming from the Prime Minister himself, I am sure that the government has no choice but to ensure the success of the programme.

You may be wondering what the GTP roadmap is all about. Well this is why we have our friend Idris Jala here. But basically the roadmap describes the programme in detail and covers the approach taken in the transformation journey and explains how the GTP is guided by the principles of 1Malaysia, People First, Performance Now.

It is also outlines the Government’s approach to building 1Malaysia and its commitment to the six National Key Result Areas (NKRAs).

And just last month, the New Economic Model which aims to transform the country into a high-income nation was unveiled.

Drawn up by group of experts, NEM will among others, recommend action on reducing subsidies, providing a wider safety net to cover more people, improving the skills of the locals, addressing the question of affirmative action and redefining the poor and seeking ways to help them.

Datuk Seri Najib Tun Razak in unveiling the thrust of NEM had said that the framework will review various economic policies to suit the new economic reality including affirmative action to ensure fairer and more equitable distribution of wealth based on needs and merits.

On this note, it is MCA’s fervent hope that the Government will walk the talk and ensure the implementation of economic and social-economic policies are implemented fairly and justly for the sake of all Malaysians.

There must be political courage and not political patronage when policies are carried out and there should not be any flip flop decisions or policies which would not go down well with the people as well as foreign investors.

There must be consistency and well thought out policy formation which is transparent.

On 1Malaysia, it is based on the concept of fairness to all. This means no group should be marginalized and support and opportunities should be provided on the basis of need and merit.

It should be clearly spelt out how does the ordinary man in the street will benefit from these flurry of initiatives. How does it translate to a better lifestyle and livelihood of those in the rural areas and how will those with lower household incomes improve their overall quality of life?

While the government is engaging the people in line with its transparent approach in governing the country, the various political parties should also help give their input to the transformation programme.

MCA which has an enormous outreach with its 1 million strong membership base could well make use of its ready resources by getting feedback from the people with regards to the transformation programme.

Leaders should gather feedback, reaction and suggestion from the Rakyat. In doing so, they can feel the pulse of the nation and carry back the right messages from the people to the government.

Likewise, Chinese guilds and associations, business leaders and non-government organizations should also provide inputs so that a more well represented programme can be churned out.

There is no time to waste now. Malaysia cannot afford to lost its way or lost out. Countries such as South Korea had taken off after initiating reforms and making their economies competitive.

We don’t have time to waste on divisive issues. We will be left behind if we still remain the realm of yesterday of being a divisive and divided nation.

On this note, the government must bear in mind that in must harness the best brains for the country and can ill afford the threat of an exodus of brain drain if its policies gave rise to resentment and anger.

It is timely that we review and relook on the incentives to attract the best brains back to our country to propel the nation toward the goals of its economic initiatives.

A country may have the right geographical advantage, the best resources but without the best talents to carry out its initiatives, it cannot propel itself to join the ranks of the high-income nation.

In its push for reforms, one of the key initiatives should be affirmative action based on need and not ethnicity. With such political will in mind, a major policy shift can be realized and this by itself could arrest the brain drain and attract investments in higher value activities. Any initiatives undertaken by the government should from now on be in line with the consultative approach of engaging with more stakeholders.
It should be guideline towards a strong foundation of truly 1Malaysia in the making and not just a political jargon so to speak.

A journey of hundred miles starts with the first step and Malaysians have taken many more steps than this to make what Malaysia is today. So let us now open our ears and allow Idris Jala to take us on a journey to enlighten us on this well thought out ambitious plan which comes under the purview of the Prime Minister’s Department.

It is just the beginning of a brighter Malaysia. The journey has just begun.

Press statement: National Economic Model

MCA welcomes the New Economic Model (NEM) announced by Prime Minister Datuk Seri Najib Tun Razak to achieve high-income status of USD 15,000 by year 2020.

It is heartening to note that the Government is committed in making the NEM all- inclusive and one that embraces all races in the country. It also recognises that there should be more transparency in Government policies and the private sector remains the engine of growth.

There will also be less direct state participation in the economy.

The MCA fully agrees that price control and subsidy have distorted the market of goods and services, rendering Malaysia less competitive.

Quality education and skill enhancement for Malaysians is an important component for us to add value to the various sectors of our economy. The Government needs to address the long -standing issue of ensuring fair and easy access to quality education. The skill enhancement programmes needs to be enhanced as well.

The Government also needs to re-look at the incentives and ensure that training programmes are market oriented.

There is a need to review the implementation of the NEP to ensure that the twin objective of NEP will not be derailed. Hence, MCA is delighted to note the renewed affirmative action will be merit and need based, transparent and market friendly.

Race should not be the main criteria in implementing economic and social-economic policies.

With that, only the government is seen to walk the talk of 1Malaysia. The Government must show its political courage and wisdom in addressing the weaknesses of affirmative policies and there should be no politics of patronage and tolerance for rent-seeker.

We need to develop new sources of revenue. We have a good start in green technology and it is time that we tap into high value green industries and services. We can never hope to be a world financial centre but we have great potential to be a hub of integrated Islamic financial services.

The NEM has not adequately addressed the issue of Malaysia’s over-dependence on foreign workers. The Government needs to draw up a master plan on manpower requirement for the next 10 years. We must upgrade our workers to be highly and multi-skilled labour or else it will not be easy to overcome our dependence on cheap unskilled foreign labour.

The Government must also seriously look into the implementation of the minimum wage in some of the sectors with growth potential but dependent on foreign workers. Until then, we will face an exodus of skilled Malaysian workers to foreign countries.

The brain gain policy has not been successful because it is more on the very minimal monetary gain for the individual involved. We have to attract not only the individual but also his family. Hence, living environment, security, access to quality education, potential to develop their entrepreneurial skills and transparent Government policies are also important consideration.

The NEM has generated hope and excitement. Public and private cooperation is vital. The MCA believes that improving the efficiency and the quality of public delivery system is crucial. However, the MCA has no doubt about the political will of the Government to achieve the goals of the NEM.

大马人口老化需要扩展征税范围

蔡智勇提出七大实行消费税理由 From Malaysiakini.com

王德齐 | 1月19日 上午 11点50分

随着政府在去年年底提呈备受争议的消费税（GST）法案，马华拉美士国会议员蔡智勇昨日也针对这项新税制提出一份全面的研究报告，探讨实行消费税的利与弊，并提出数项建议来减缓其冲击。 也是马华消费税特别小组主任的蔡智勇，在这份报告中提出7大理由，来解释政府为什么需要实行消费税来取代现有的征税制度，包括所得税、销售税，以及服务税。 其中一项理由是，传统所得税制度只是牵涉15%工作人口，随着大马人口将逐渐老化，工作人口将会缩小。因此，我国需要改变税制，通过消费管道征税，来扩展征税人口。 消费税是依据消费数额而征税，消费越多就征税越多，相反传统的所得税制度，赚钱越多就征税越多。 消费税或引发一次过通膨 不过，这份研究报告也分析，推行消费税对个人和商业带来的冲击和问题，包括一次过通货膨胀、人民感到混淆、加重贫穷人民的负担，政府朝令夕改，以及附加收入会否获得善用。 蔡智勇更提出一系列对策，来改善政府实行消费税的方式。 《当今大马》将在第二篇报道中，详细报导这份报告所点出的冲击和问题，以及政府应该如何解决。 鼓励人们工作和企业发展 蔡智勇在报告中指出，除了需要实行消费税来创造替代收入来源，其他的可能理由包括： （一）大马目前的生育率是2.2，因此乐龄人口将会增加。预料2030年，超过60岁的人口将总人口12%，使现今比率的一倍。因此，现有15%缴税工作人口将会减少，并让更小撮人承担更大的负担。消费税是一个大范围的征税，根据消费把税务均分到更大批人口手上。 （二）消费税将维护人们工作的动力，并鼓励企业发展，因为它不是累进税（progressive tax），税率不会根据收入水平而增加，反而维持一样。 （三）消费税是出产和派发过程中征收，因此纳入了自行监督机制，将能够有效协助当局，并且加强逃税的困难。这将会减少少报税而造成的收入损失。 有效从黑市经济征收税务 （四）预料大马实行的消费税制度不会有层叠效应（cascading effect），因为征收的税务是依据产品的最终价值，而非根据产量，以及它所经过的运输管道。此外，产品需要缴付的消费税也会受到原料的消费税抵消，因此不会出现税上加税的问题。 （五）预料消费税将提供更稳定的收入，因为消费和收入相比，较小受到经济循环的影响。 （六）消费税将能有效从“黑市经济”征收税务，因为涉及人士依然会消费，并通过消费税来间接缴税。涉及人士会较喜欢购买征收消费税的奢侈品。 （七）政府将在2010年减少营运开销13%。这显示政府清楚，我国赤字因为刺激配套而增加。惠誉评级公司已经降低令吉的评级，一旦令吉贬值将可能引发进口通膨，国际货币基金认为有必要尽快实行消费税。 各国在反对下仍继续实行 政府是在2009年12月16日提呈消费税法案一读，并表明他们将征收4%的税率。至于一些必需品则不会征税，以避免引发通膨。 世界上目前共有143个国家已经实行消费税，只有三个东南亚国家尚未实现，包括大马、汶莱和缅甸。 蔡智勇也表示，尽管消费税受到反对，但是大多数国家还是因为数个理由而实行消费税，而其实行期限也有所不同，各国是依据本地需要来定制不同的模式。

文告:周五晤副首相解决培智华小问题

（吉隆坡6日讯）马华署理总会长拿督斯里蔡细历医生将在本周五会晤副首相兼教育部长丹斯里慕尤丁，以解决培智华小延误搬迁和开课的问题。

他指出，总会长拿督斯里翁诗杰和他本人，在上个月杪获知有关问题后，已第一时间致电教长。当时已赴往麦加朝圣的慕尤丁，表示回国后将马上处理。

他说，培智华小延误入校是由于技术上出现问题。他将在本周五会见副首相，讨论和解决有关问题。

--------------------------

拿督斯里蔡细历医生

A response to the 2010 Budget

The Budget 2010 that was announced on Friday, 23^rd 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.