Past few days have been interesting. I’ve been called to give some talk and the articulation of issues herein have been helpful. It became more interesting trying to explain the issues to ordinary people as most are just confused with propagandas. Thus thought of restating some of the stand.
BR1M cannot be by any extension of any meaning be corruption. Or is it “Lu Tolong Gua or Gua Tolong Lu”. If it is then PR is also corrupt and practice Lu Tolong Gua.
PR in their manifestos has allocated billions of direct handout. This is similar to BN. Anyone says otherwise must get their heads check. :-). But seriously same act must have similar value. Any other interpretation is hypocritical. The issue on direct handout is what is the limit for this. However I much prefer less handout but if we can afford it I’m not so against giving the money to people.
As a principle I think any handout must be direct to targeted group. I’ve been recommending to the government for a while for direct handout. Indirect subsidy does not only misallocate resources but does not benefit the target group.
For example, the petrol subsidy. We compare one who has a Mercedes 500 S (I’m a Beemer fan :-)) and one who has meager income who only owns a motorcycle (kapchai) and takes public transportation to work. Now the car of 5000 cc will definitely consume more petrol than the motorbike. The Merc owner does not need the subsidy but he benefitted most. The one needing it is the one who uses the bus but he does not benefit the subsidy.
It’s similar with electric and water subsidies. A house with a swimming pool will definitely consume more electricity and water than one small PPR flat for ordinary citizens. Why should the former benefit from the subsidy than the one who has a small dwelling.
And to compound the matter, when we lower utility charges we make it cheaper than it is and people use it wastefully. As a result we have systemic problem like our water industry where there’s not enough money to sustain a proper operation resulting in a high non resource water (NRW). So we lose up to 50% of production. We haven’t changed the tariff for years and some in decades. And people don’t appreciate it pun. It’s too cheap. Look at the waste. But if you charge they appreciate. Look at how much they’re willing to pay for mineral water. By paying the same amount for water tariff instead of mineral water, they could have 1000 times more of drinkable water. This misallocation of water should be stopped.
So going forward we must decrease indirect subsidies and increase the direct subsidies.
This is where PR totally got it wrong and spin ridiculous populist position. It says its concerned with the well being of those ordinary people. But if you see their promise of cutting down utilities price and abandon all this direct subsidies to all those income below certain salary like Br1m (they even call this corrupt practices), it will affect ordinary Malaysians more and enrich further the rich. The ordinary people need to know this.