Save on Subsidy Lose on Taxes, Flip-Flop Policy End of Show

Posted by SM Maulana
Wednesday, 18 June 2008

In the kind of classic flip-flop the world has seen little of since the Abbassid dynasty collapsed before Hulagu in 1258, Pak Lah, Malaysia’s out-going Prime Minister, raised fuel prices by a fiery snort and then gave rebates to about 1.7 million non-commercial car-owners. Now conscientiously working to “automatically” reduce road-tax and even income tax, it is clear he had raised fuel prices in a flip to cut the fuel subsidies and then he flopped to cut government revenue to raise the people’s humor, or something like that.

In Baghdad the flip-flop was, of course, even more critical. Hulagu forced the sultan to decide between keeping his treasures or his concubines (numbering more than 800 he described them as ‘women that had neither been touched by the light of the sun nor that of the moon.’

Hulagu let the captured sultan believe he could leave with the women and about 200 miles from the capital, he intercepted the sultan’s caravan and had him and his men cut to pieces.

Both the episodes have one thing in common, and that is that humor is only raised for a while. The humor was never meant to last. From out of the general despondence caused by rising prices, several thousands took to the streets in Kuala Lumpur (Friday, 13 June) to protest the flip-flop policy.

The government should have known better. Fuel prices to most Malaysians are far above what is paid at the kiosks. These kiosks are not available to most people.

Even in the outskirts of the Klang Valley fuel is often sold in bottles and in plastic cans. When petrol used to cost RM1.92 at the kiosks, a liter in a bottle would cost RM6 or more. As an example, RM6 per liter was charged at two small sundry shops in Batu 14, Ulu Langat, Selangor.

In Sarawak it was reported petrol was sold along the Rejang at RM5.05 per liter and some in the government would have us believe it is the story of a remote upstream station.

But between Slim River and Bidor in West Malaysia is a Felda scheme plopped 45 kilometers from the trunk road and settlers have to drive or ride about 60 kilometers to fill their tanks at the kiosk in Slim River. That means 120 kilometers to and fro. Is that also a remote place?

Still wonder how prices of goods go up by leaps and bounds in some places following the fuel price hike? Development in Malaysia is like a checker-board, but with less than equal black and white squares.

Someone should put on the web a map showing the distribution of the fuel kiosks and superimpose that on a demographic map and there before our very eyes would be a lesson we ought to have learned a long time ago.

It will tell us the kiosks are commercial and not a public utility provided by the government. Hence, their absence means a higher fuel price than the ones the government decided without bothering to consult the people via the parliament or via any forum.

You still think it was a great idea to push the price of petrol to RM2.70 from RM1.92 and diesel up RM1 to RM2.54 per liter while issuing rebates for 800 liters?

You still think it was smart to do that and then, seeing how the general price increase can overwhelm the society, you reduce road tax, income tax and sales taxes, resulting in an elaborate exercise to save on the fuel subsidies and then lose a lot of revenue. What kind of a subsidy-taxes swop is that?

A salesgirl told this writer she has started to eat broth for lunch and to skip dinner. Many will have to do that, earning only RM800 per month or RM30 per day part-time, in Kuala Lumpur.

These are the people that are punished most severely, people who do not use petrol or diesel at all, and along with them all those we may categorize broadly as less endowed.

The injury is done. What we need now is intervention between policy decisions and implementation simply because there was no consultation before the hopeless decision was made.

But how can that happen if the deputy premier, Najib Tun Razak, is not willing to place the nation and the people before self and decide he will not contest for party president in the forthcoming Umno Supreme Council election?

Rumors suggest Pak Lah will retire anytime between March and June next year. But in that time the injury would have become gangrenous and what Najib shall be taking over would be a country in critical need of surgery.

Najib must become more policy-active now, not later. The protest march from Kampung Baru to Sogo, organized by Pas Youth, was merely a foretaste of what’s to come. Planned on 5 July is the “million march”. Will it happen?

Judging from the enthusiasm shown from the last march, with a lot of people waiting at and around the KLCC to welcome the walkers, the answer is yea, it will.

The fuel-price decision was crazy. It made no sense at all to save on the fuel subsidy and cause a general price rise, and then cut revenue by reducing tax after tax in addition to the RM625 rebate. It makes the policy a veritable gas-bag but certainly filled with other than laughing-gas.

People are bound to ask who made the money from the fuel price hike.

Caramba! We need a problem solver, not a bleeding-heart or peace-maker for a leader. Maybe we need one such as Hulagu, the Mongolian.

by A. Ghani Ismail, 14 June, 2008

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