It’s that time of year again and this Friday is the day that cabinet will table the 2014 National Budget to the public. Judging from the recent talk circulating around the media and cyberspace, not much optimism can be expected on the part of the people, especially after the appaling Auditor General report that was released not too long ago. Having said that, it doesn’t hurt to express our opinions on what we want to see in next years budget.
As an overview of the 2014 budget, there is absolutely no reason to believe there will be a mechanism put in place to lower the prices of goods or even helping the more unfortunate people in their daily lives, apart from offering BR1M (if that can even be called as help). Honestly it’s more about scoring political mileage than actually helping the less fortunate. But what can you expect from a country that is falling more and more in to debt each year?
No doubt the highlight of the budget will be the goods and services tax that is said to debut at 4% from unconfirmed reports. However in the news today it was said that the GST will not include daily goods such as food stuff, fruits and veggies, seafood and meat produce.
If I understand it correctly, currently the sales tax is 6% and services tax is 10% which is usually included in the price and the government charges this tax on the seller. As for the GST, the government will announce the rate during the budget but it’s said to start at 4% (again, I might be wrong) but now, instead of charging the seller, they will charge the buyer according to the product and services they buy or use.
So, again, if I understand it correctly, the difference in the old tax method and the GST is simply the way it is charged and the rate. So theoretically there should not be much different in prices after implementing GST. In fact, depending on the rate of GST (if it’s lower than the current tax) the prices of goods should be lower. The sellers should deduct the old tax rates included in the price first before adding the GST to the prices of goods. But in reality, I’m sure some irresponsible sellers will take the opportunity to raise prices without first deducting the old tax rate from the price.
In short, theoretically the implementation of GST will lower the prices of good and raise the government income through a more efficient delivery system. However, in Malaysia, anything can happen and chances are, prices will still go up if the sellers themselves take advantage of peoples expectaions that the prices will go up.
We also expect the government to implement some kind of realistic program to control the housing prices and building affordable housing. We all know the PR1MA program is somewhat a bad joke. It seems as if the people that came up with that plan have been living too long in a cocoon and don’t have the slightest idea how the people on the ground live and how much they earn.
In the news today, the CEO of DRB HICOM Datuk Seri Mohd Khamil suggested to the government to implement a law that requires cars older than 10 years to be scraped. He has a point by saying every year we add approx. 40,000 new cars on the road and if not controlled, there simply will not be enough space to place the cars in. But between the lines, he just wants to sell more cars. I’m OK with all that but first they have to consider doing a few things first.
This definitely will be a hot topic as always. The government since ages ago has wanted the bumiputera to achieve 30% equity hold in the countries wealth, but until now it still have not been achieved by the NEP or any other national program.
I guess maybe it’s time to abandon the NEP in favor of another, better, more practical program.
I believe the biggest problem of the policy is assuming that money alone will help the bumiputera to better themselves. More scholarships, more loans, more hand outs and what not are not the best way to help the bumiputera.
There is too much wrong and I don’t know where to start. but in short, it’s more to do with attitude rather than material things. The government should spend more effort on changing attitudes rather than dishing out monetary assistance. Sure, there are successful cases, but they are small. I bet the PR has a better plan. You can read theirs through this link.
Anyway, we shall see what is in store for us tomorrow during the presentation. I can already imagine the commentators on TV praising the budget as if it’s the best plan in the world.
iMyn is the Co-Founder and some say Chief Content Officer of RinggitKini.com. Has a craze in travel, writing and current issues.