Budget 2012 Highlights

October 07, 2011 19:36 PM

2012 Budget Highlights

(Highlighted in BLUE is Automotive industry related issues)

(Highlights in RED is MY OPINION!)

KUALA LUMPUR: Highlights of Budget 2012 tabled by Prime Minister Datuk Seri Najib Tun Razak in Parliament Friday.
- Last year our FDI growth was the strongest in Asia and in the first 6 months of this year have already reached RM21.2bil
- In 2012, private investment is forecast to climb 15.9%, supported by foreign and domestic investment
- GDP in the first 6 months of 2011 was 4.4%, driven by strong domestic consumption
- In 2011, the economy is forecast to grow by 5-5.5%
- Private and public investment are forecast to increase by 15.9% and 7%, supported by foreign investment, the ETP and 10MP
- In 2012, the service sector is expected to grow 6.5%, the construction sector 7% and GDP is forecast to be between 5 and 6%
- Budget 2012 allocates RM232.8bil for Government plans, including RM181.6bil for management and RM51.2bil for development (181.6billion for Management!!!)
- RM29.8bil has been allocated for investment in infrastructure, industrial and rural development
- RM13.6bil has been allocated for the social sector, including education and training, welfare, housing and community development
- Total revenue for 2012 is forecast to increase 1.9% to RM186.9bil and the deficit to decrease to 4.7% of GDP from 5.4% in 2011
- The theme for Budget 2012 is “National Transformation Policy: Welfare for the Rakyat, Well-Being of the Nation” (We'll see)
- We will focus on accelerating investment and further liberalise 17 services sub-sectors, in places enabling 100% foreign equity.

- RP2 will be implemented in 2012, and it will be allocated RM98.4bil, to be split evenly between 2012 & 2013

- RP2 main projects will include the East Coast Highway from Jabor to Terengganu and road upgrades from Kota Marudu to Ranau
- RM18bil of the RM20bil PPP Facilitation Fund will be used for high impact projects, with RM2 billion for bumiputera entrepreneurs
- In 2012, the Government will allocate RM978mil to accelerate the development in five regional corridors
- The Treasury Management Centre will be established and offer incentives to develop M'sia as a competitive financial centre

- We will develop the Kuala Lumpur International Financial District, with incentives including income tax exemptions for firms
- Income tax exemptions for non-ringgit sukuk issuance and transactions will be extended for another 3 years
- To promote the development of Exchange Traded Funds products I-VCAP will provide RM200mil for Shariah-compliant ETFs
- Felda GVH will be listed on Bursa Malaysia by mid-2012 to raise funds for the company to become a global conglomerate. Felda settlers are expected to receive a windfall, and the amount will be announced before listing
- A RM2bil shariah-compliant SME Financing Fund managed by selected Islamic banks will be established in 2012
- A RM100mil SME Revitalisation Fund offering loans up to a maximum of RM1mil for entrepreneurs will be available from Jan 2012

- Full exemption of import duty and excise duty on hybrid cars and electric cars will continue to be given until 2013

- To promote tourism, the Langkawi Five Year Tourism Development Master Plan will be launched with an allocation of RM420mil

- The real property gains tax will be reviewed so it doesn't jeopardise the ability of low- and middle-income groups to buy homes

- The Malaysia Healthcare Travel Council will be privatised to promote and develop Malaysia as a healthcare destination
- Budget focuses on developing human capital, creativity and innovation and 2012 will be the National Innovation Movement year
- The Govt has allocated RM100mil promote innovation including the 1Malaysia Award (C1PTA) for innovative student inventions
- To enable SMEs to commercialise research products a Commercialisation Innovation Fund totalling RM500mil will be established
- RM50.2bil will be allocated to the education sector so that it can continue to develop talented, creative and innovative people (WOW! RM50.2billion!!!)
- RM1bil will be provided through a special fund for the construction, improvement and maintenance of schools
- We will abolish payments for primary and secondary education, making these free for the first time in our history
- Private schools registered with the Education Ministry will be given incentives including an Investment Tax Allowance
- The Govt will give tax exemption for contributions to educational institutions and all places of worship
- To encourage private sector human capital development incentives including a double deduction on scholarships will be offered
- Budget 2012 introduces a Rural Transformation Programme, so that rural areas can attract private investment and create employment

- RM5bil to develop rural infrastructure, including RM1.8bil to the Rural Road Programme & Village-Link Road Project

- RM500mil to expand the programme to supply clean water to the rural community in Sabah
- RM400mil to upgrade the water supply infrastructure in selected Felda areas
- To provide greater access to bank services for the rural population, Bank Simpanan Nasional will appoint agents in rural areas
- RM90mil for the Orang Asli for basic necessities, including the expansion of the clean water supply project. For the Orang Asli affected by the landslides at Sungai Ruil, RM20mil is provided for their relocation to new homes
- 600,000 Govt pensioners will benefit from an additional annual pension increment of 2%
- Civil servants get pay rise between RM80 to RM320
- Govt will extend the compulsory retirement age from 58 to 60 years old to optimise civil servants' contribution
- Civil servants will be offered tuition fee assistance for part-time studies, including 5,000 masters and 500 doctoral scholarships
- A special programme will be introduced for 175,000 army personnel who are not eligible for pensions
- RM3,000 will be given to ex-members of the special constable and auxiliary police as well as widows and widowers
- The Govt is mindful of the plight of the rakyat due to rising food prices and will take measures to address this
- The National Agro-Food Policy 2011-2020 will be launched and RM1.1bil allocated for the development of the agriculture sector
- In the spirit of “People First,” all subsidies, incentives and assistance totalling RM33.2bil will be continued
- 500,000 will benefit from KAR1SMA, which provides assistance to poor senior citizens and children and disabled people
- My First Home Scheme will be expanded to increase the limit of house prices from a maximum of RM220,000 to RM400,000
- Govt will identify areas in the vicinity of MRT, LRT and other public transport to be developed by PR1MA
- Govt will continue to implement the Program Perumahan Rakyat by building 75,000 units of affordable houses
- Govt will establish the Special Housing Fund for Fishermen to build and refurbish houses
- Healthcare will be allocated RM15bil operating expenditure and RM1.8bil development expenditure (Another potential leakage)
- Hospitals will be upgraded and constructed as well 81 rural health clinics upgraded and 50 new 1Malaysia clinics launched
- Hospital Kuala Lumpur - the oldest in Malaysia - will be upgraded to be the country's premier hospital
- Skim Amanah Rakyat (SARA) 1Malaysia will benefit 100,000 households with income below RM3,000 per month

- To assist taxi owners facing increased operating costs, measures will be introduced including tax exemptions on taxi purchases

- The National Legal Aid Foundation will ensure that every individual who is charged in court will be given free legal aid
- To assist the homeless, the Govt established a social assistance centre known as Anjung Singgah
- A training allocation of RM10mil will be provided for women to develop leadership and managerial skills
- To prevent cervical cancer, the Government will provide free Human Papilloma Virus immunisation nationwide
- MyCreative Venture Capital with an initial fund of RM200mil to be established
- RM15mil will be allocated to build 150 futsal courts to achieve the “One Court for One Mukim” target (This is insane.  RM100,000 per futsal court.  Wonder which Crony get this project?)
- To ensure the welfare of retirees measures including a tax relief on Private Retirement Schemes contributions are introduced
- Senior citizens aged 60 years & above will be exempted from outpatient registration fees in Govt hospitals & health clinics
- One-off assistance of RM500 to households with a monthly income of RM3,000 and below will be provided
- For those in private sector earning RM5000 and below, employers' EPF contribution will increase from 12% to 13%
- Book voucher worth RM200 will be given to Malaysian students in all private and public institutions of higher learning
- Civil servants will be given an additional bonus of half-month salary and pensioners RM500.

END OF SOURCE... 

For more info about this "BIASED" Budget:  Surf to:

2012 Budget Business Highlights:
http://www.bernama.com/bernama/v5/newsbusiness.php?id=618522

Why BIASED?  Here's my highlight:

* Tax deduction on expenses incurred for sukuk wakala to be given for a 3-year period from 2012. (WHAT IS SUKUK WAKALA? Islamic Bonds - thanks Google)

* Income tax exemption for non-ringgit sukuk issuance and transaction extended for another 3 years until 2014.

* Valuecap Sdn Bhd to provide RM200 million as seed monies for syariah-compliant Exchange Traded Funds

* Felda Global Ventures Holding to be listed on Bursa Malaysia by mid-2012 to raise funds and emerge as a global conglomerate
* A syariah-compliant SME Financing Fund totalling RM2 billion to be managed by selected Islamic banks by 2012

* Syariah-compliant Commercialisation Innovation Fund totalling RM500 million to be set up

* RM200 million allocated for the development of Bumiputera entrepreneurs and contractors through the Ministry of Rural and Regional Development

* Government proposes allocation for TEKUN to be increased to RM300 million

* Amanah Ikhtiar Malaysia will provide RM2.1 billion for micro financing to entrepreneurs, particularly for women. From this, RM100 million will be for Malaysian Indian entrepreneurs and another RM100 million for Chinese entrepreneurs (See.  >90% allocated to Bumis. How Unfair)

THAT"S ALL FOLKS! Thanks for having the time and patience to read this blog entry.

Foreign vehicles to be barred from filling up on RON95 petrol and NGV

 Tuesday, June 14, 2011 9:05 PM

KUALA LUMPUR: RON95 petrol and NGV fuel will be banned from being sold to owners of foreign-registered vehicles from tomorrow, the Ministry of Domestic Trade, Cooperatives and Consumerism announced Tuesday.

RON95 petrol would however be allowed to be sold to those having foreign-registered motorcycles as an exception.

Following the move, the requirement to produce Mykad by Malaysians using foreign-registered vehicles for buying RON95 petrol at all petrol stations throughout the country had been withdrawn, the ministry said in a statement here.

On Aug 1 last year, a directive to ban sales of RON95 petrol to foreign-registered vehicles nationwide was imposed with the exception given to Malaysians who could produce the Mykad for verification.

The ministry in the statement clarified that the government had received feedback of leakages due to abuse of of the Mykad for purchasing RON95 petrol.

According to the ministry, petrol station operators at border areas had also complained of difficulties in controlling and ensuring the directive on the petrol ban was fully complied with.

"On this issue, the government is of the view that the ban on all foreign-registered vehicles from buying RON95 petrol and the withdrawal of the condition that allowed purchase of RON95 petrol on producing the Mykad throughout the country with the exception of motorcycles, is reasonable," the ministry said.

The ministry clarified that the ban also covered NGV fuel following the discovery that 311,000 litres of NGV fuel were sold to foreign registered vehicles each year.

"At the rate of the current subsidy, the NGV fuel subsidy enjoyed by foreigners amounted to RM360,000 each year," the statement added.
 -Bernama

RON97 fuel – RM2.90 per liter as of 5th May 2011

According to Malaysiakini, the price of RON97 fuel will be increased to RM2.90 per liter at midnight today, up 20 sen from the previous price of RM2.70 which was on the 1st of April 2011.
If this trend continues, the price of RON97 would probably hit over RM3.50 per liter by the end of the year.

This is the fifth monthly increase in a row since December last year. The margin of increase has also been going up, with the first three hikes being only 10 sen, with subsequent increases being 20 sen.
RON95 and diesel remains unchanged for now.

Government To Maintain Present RON 95 And Diesel Prices

Government To Maintain Present RON 95 And Diesel Prices

KUALA LUMPUR, Feb 24 (Bernama) -- The government will maintain the current fuel price for RON 95 at RM1.90 and diesel at RM1.80 despite the escalating global oil price, Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob said on Thursday.

It will instead discuss with the Finance Ministry for alternatives to cushion the increase, he said.

"The government will retain current prices and look at other options or alternatives even if the government's load increases.

"So far the situation can be handled without raising the price of RON 95 and diesel," the minister told reporters after announcing Bank Rakyat's annual financial results here.

He said the budget allocated for subsidy this year was RM10.3 billion and if the price trend continued, this could reach up to RM14 billion.

The RM10.3 billion subsidy covers petroleum, RON 95, diesel, LPG gas, sugar, rice and cooking oil.

Last December, the prices of RON 95 and diesel price were each increased five sen to RM1.90 and RM1.80 per litre respectively.

On the alternatives being looked at, he said there would be a review on the petrol and diesel quotas received by certain parties.

Asked when both ministries would finalise the discussion, he said decisions would be made as soon as possible.

"It won't take long. The more time is taken, the higher the amount of subsidy the government would have to bear," he added.

He said as an importer of food products, the country would also have to bear the increase in the prices of imported food products.

Commenting on whether prices for other subsidised products would be increased since the fuel price would not be hiked, Ismail Sabri said the government was not looking to increase the prices of other subsidised products.

"Effective Feb 1, subsidy has been stopped for all factories producing food products and drinks using 500 metric tonnes of sugar a month.

"The government would be able to save RM128 million," he said.

-- BERNAMA

RON97 up 10 sen/L at midnight, sources say

RON97 up 10 sen/L at midnight, sources say
Malaysian Insider, January 31, 2011

RON97 is subject to a managed float. — Reuters pic

KUALA LUMPUR, Jan 31 — The price of RON97 petrol will be increased by 10 sen to RM2.50 effective midnight, according to industry sources.

The price of the premium fuel was last raised on January 4, also by 10 sen.

The government announced on July 16 last year that the price of RON97 will be subjected to a managed float to reflect the price of oil on the global market.

The latest increase will, however, not affect other fuels.

The base grade RON95 petrol remains at RM1.90 per litre, diesel at RM1.80 per litre, and LPG at RM1.90 per kg. The government currently subsidises 30 sen of the RON 95 fuel cost.

The Najib administration has opted to gradually slash subsidies as a way to reduce government deficit.

The government’s Performance Management and Delivery Unit (Pemandu) had said last year that savings from fuel subsidy cuts amounted to about RM3 billion last year. This number will rise to RM14 billion this year, RM21 billion in 2012, RM29.5 billion in 2013, and RM35 billion in 2014.

ARTICLE: Streamlining the Malaysian Civil Service and Bureaucracy

Before I begin the article I'd like to give a personal comment.  What is the point of Subsidy Cuts on Fuel, TOLL, Food items, Healthcare etc when we have the HIGHEST per capita Civil Servants in the WORLD.   I'm talking about 1,000,000 (yes, 1 MILLION), ie. 1:25 (1 Civil servants PER 25 Malaysians).

Article 132 of the CONSITUTION OF MALAYSIA stipulates that the Public Service consist of:

• the General Public Service of the Federation
• the State Public Services
• the Joint Public Services
• the Education Service
• the Judiciary and the Legal Service
• the Armed Forces

For all intents and purpose, Statutory Bodies and the Local Authorities are also considered as part of the Public Service. This is because both these autonomous bodies resemble the Public Service in many respects since they adopt the procedures of the Public Service pertaining to appointments, terms and conditions of service and the remuneration system. Besides that, their officers and staff also receive pension and other retirement benefits similar to the employees in the Public Service.

The Irony is 95% of these 1,000,000 are Bumiputras.  Only 5% are NON Bumis (ie. 50,000).  But I'm not picking about this figures.  It's just that it's UNHEALTHY to have 1,000,000 Civil Servants!  During a visit to Immigration, I was shocked to see SO MANY STAFF (about 60 of them inside) wondering around there YET ONLY 5 out of 20 counters (ie. 1/4) opened to serve us!  What's the rest of the staff doing?  Minding their own business I guess...  Some can be seen Chatting to one another, one of them YAWNING Away, Few of them goes ONLINE, few of them READING NEWSPAPERS and ETC...  Clearly, this is a WASTE of our TAXPAYERS MONEY to Employ them...    Also, the 1.2BILLION+ ringgit spent to Construct the NEW PALACE!  How about Billions spent to Sponsor "1 Malaysia LOTUS F1 Team".  But these are another stories which I will NOT Dwell further...  CLEARLY, something needs to be done to "REDUCE the REAL SUBSIDY".

Back to this article, the article was WRITTEN in 2007.  The NUMBERS might INCREASE THIS YEAR!


Streamlining the Malaysian Civil Service and Bureaucracy

Written by johnleemk on 3:45:58 am Feb 25, 2007. 

One million. That's the number of civil servants we have. One million people living off a government paycheck. (And, if they're lucky, the occasional bribe.)

You tend not to think about government employees most of the time. After all, they're generally invisible, despite the important roles they play. The only time you might pay them any heed is when you get stopped by a policeman looking for some easy money, or when some bloke at the immigration department refuses to renew your passport over some minor paperwork issue.

But, still, one million is a huge number! That's one civil servant for every 25 Malaysians! To put this in perspective, the Indian state of Andhra Pradesh employs about one million public servants. The population of Andhra Pradesh, however, is in the range of 75 million people — and even then, it's considered to have a disproportionately big civil service.

Why are we so awash in civil servants? What's the cause of this oddity? I think a big contributing factor is the government's reluctance to create a class of discontented and unemployed malcontents. Their solution, then, is to employ anyone who is rejected by the private sector.

This in turn is probably the cause of our infamously inefficient civil service. And, if the government's actions are anything to go by, things will be getting worse as we go along.

Last year, in response to the problem of unemployed graduates, Deputy Prime Minister Najib Tun Razak declared that the civil service would be picking up the slack — an explicit admission that the government employs the worst of our graduates to keep them from turning against the government at the ballot box.

Around the same time, Parliament was informed that 70% of public university graduates are unemployed. Some people, including the now-famous Tony Pua (a probable candidate for a Parliamentary seat on the Democratic Action Party ticket in the next election), expressed incredulity, and suggested the statistics used must be flawed.

Whatever the case may be, the fact is that a lot of the graduates our public universities unleash on the country are not employable. And these unemployable people find employment in the government.

If the government is really serious about expediting efficiency, what it ought to do is begin retrenching these one million civil servants in stages. Offer them a generous pension comparable to their paycheck — the increased efficiency from a streamlined bureaucracy would make it worth our while.

The government could also do as one East European country did recently while downsizing its civil service. That country offered capital to any former civil servant who wished to start a business. Small and medium enterprises are the backbone of many economies, and it makes sense to turn former civil servants into entrepreneurs.

Of course, this would all be reliant on a government with the political will to dismiss inefficient civil servants, and on a government with the spine to enforce loans. From past experience, this is not the kind of the government we have.

So, till the day we change our government, this is what we will be stuck with — a behemoth of a civil service that exists only to provide a wage for the people not worth employing.

END OF ARTICLE:

SOURCE:
http://www.infernalramblings.com/articles/Malaysian_Government/149/

That's all folks, thanks for having the time and patience to read this blog entry

ARTICLE: Subsidy cuts without pay rise = tax hike

THE STAR BUSINESS: Thursday July 22, 2010

Subsidy cuts without pay rise = tax hike

Making a Point - By Jagdev Singh Sidhu

IT’S been roughly a week since subsidies were cut marginally in Malaysia and judging by the reaction people have to it, I guess the public has taken it in stride.

After all, the increase in the cost of fuel (increase of 5 cents per litre across the board with RON97 subject to FLOAT Mechanism), which is ultimately the biggest cost element among the other goods that saw prices rise, was small and well within what people can stomach.

The price increases in sugar and cooking gas were small when looking at what an average household would spend monthly to consume and use such goods.

The way subsidies were removed this time around was also properly handled. The message of why that needed to be done was clear.

Conversely, editorials and comments have stressed the point that the increase in government revenue of RM750mil from the subsidy rationalisation, along with how the Government spends taxpayer money, should also be more disciplined to avoid wastage and should be on projects, goods and services that have tangible benefits to the general population.

So far so good but the reality of things is that the subsidy cuts announced represent the first wave of what could be a series of cuts that would bring down the overall subsidy bill of the Government.

It’s quite likely too that future subsidy cuts could see the price of fuel, depending on the price of fuel internationally, and electricity rise. Along with that, sugar, flour, cooking gas, cooking fuel and maybe even other goods, services and utilities could also see a price increase.

And while the general population, especially the middle-class, has been quiet about the first cuts, there could be grumbles if the price increases do not correspond with the pay packet they bring home.
The reason for that is there is a feeling that urban inflation has grown quite a bit in recent years and that wages in Malaysia have not increased in keeping with the rise in the prices of consumables or even assets.

The increase in starting salaries for jobs in many industries today pales in comparison with how, say the price of a house, car or processed food has risen over the past years or even decades.  I know employers will say that salaries would have to reflect the productivity of employees, the growth of which has in recent years been poorer compared with how Malaysians in yesteryears used to attain.

There are also suggestions that the current labour laws, which make it difficult for employers to fire unproductive employees, are also an impediment to employers offering more lucrative salaries for their workers.

Changes to such laws are reportedly being looked at but there is still no guarantee wages would rise after that.
Unless salaries rise as a result of a more efficient marketplace brought about by the removal of subsidies and laws, the price hikes from future subsidy cuts would be viewed as a tax hike. And that could well raise the blood pressure of a lot of people.

·Deputy news editor Jagdev Singh Sidhu is now looking at a substantially smaller pay packet for the next few months, not from the subsidy cuts but the taxman.
 
END OF ARTICLE...

SOURCE:

http://biz.thestar.com.my/news/story.asp?file=/2010/7/22/business/6710844&sec=business


Related Stories:

Penjanabebas: IPPs don’t get financial benefit from gas subsidy

Minimal impact seen from subsidy cuts

Analysts expect subsidy cut in August

That's all folks!  Thanks for having the time and patience to read this blog entry.

The Star: Dealing with subsidies is serious business...

The Star, Wednesday May 26, 2010

Dealing with subsidies is serious business, it cost RM74bil in 2009

By JAGDEV SINGH SIDHU
jagdev@thestar.com.my

SUBSIDIES in the country, which reached a staggering sum of RM74bil in 2009, will be the thrust of discussion over the next few days as the Cabinet and the public will examine the ambitious plan hatched to minimise and eventually remove the burden to the Government.
The Cabinet is scheduled to meet today to deliberate on the subsidy-removal plan laid out by Pemandu and the public will have their say at the subsidy rationalisation lab open day tomorrow.
The basis of wanting to give subsidies the boot is simple. The cost of maintaining cheap food, energy and services has put a terrible strain on government finances with the fiscal deficit now projected at 5.6% of GDP.

Whatever the case, maybe as one economist puts it that Malaysians may now feel a right of entitlement with subsidies after enjoying the benefits all these years with Malaysia being one of the most heavily-subsidised nations in the world.

 

One of the main subsidies is for petrol. Subsidised fuel has made the price of petrol in Malaysia among the cheapest in the world

As a percentage of GDP, subsidy expenditure is now at about 11% of GDP compared with 3.5% in Switzerland, 1.4% in France, 0.7% in Britain, 2.7% in Indonesia, 1.6% in India or a meagre 0.25 in the Philippines.

One study puts the average subsidy expenditure for OECD countries at 1.5% of nominal GDP.
Much of the subsidy bill, totalling RM42.8bil, is in the form of social services which include health, welfare, education and scholarships.

While such expenditure is important as it involves directly funding education and healthcare and other services which the public is dependent on, there are components within that category where subsidies can be lessened through better effort to check on wastage and abuse.

“I don’t think people will complain much if they are asked to pay RM3 for outpatient care at a government hospital compared with the current charge of RM1,” said an economist with a local brokerage.

While savings from the huge social bill can be obtained, the biggest and fastest source of savings from the reduction in the deficit will come from the reduction and removal of energy subsidies.

Fuel, either in the form of petrol, natural gas, LPG or electricity, cost the Government RM23.5bil in 2009.

Subsidised fuel has made the price of petrol in Malaysia among the cheapest in the world, as Malaysia is ranked 157 out of 175 countries in terms of having the lowest cost of petrol.
Cheap petrol and diesel prices have also led to wastage and frivolous use of such energy. Furthermore, the amount of smuggling, in the form of fuel, sugar and cooking oil, to neighbouring countries is huge.

The subsidy bill for food, which includes cooking oil, sugar, flour and rice fishermen, was RM3.1bil in 2009.

Analysts agree that the subsidies for fuel and food should eventually go but they caution that the immediate consequence of that, depending on how the subsidies are removed, will have an impact on inflation and consumption.

The planned subsidy removal, which will likely be done on a comprehensive but staggered and gradual basis, may see inflation rising by between 4% and 4.5% in 2011 before coming back down the following year.

“If the rise in fuel price is gradual then people would be able to stomach such increases. What they don’t want to see is a sudden steep increase in the price of fuel as that would see inflation and their disposable incomes hurt,” said an economist.

Dealing with the subsidies is a major concern for the Government now as the mountain of subsidies, which it has to borrow money just to fund, has taken a toll on its total debt.
The percentage of total debt to GDP, which was in the 40 percentage plus point range for much of this decade, surged to 54% in 2009 which also took into account the fiscal stimulus cost incurred to aid the economy during the recent recession.

Economists have said that the implementation of subsidies had been faulty for all these years as they were not targeted to the needy.

Instead, government data shows that 97% of subsidies were given regardless of household income levels. As an example, 71% of fuel subsidies go to the mid-income and high-income groups who can pay for higher fuel prices.

If subsidies can be reduced and utilised to targeted groups, then the extra freed-up cash can be used to improve services and productivity that will improve economic growth in the years ahead.

END OF ARTICLE...


SOURCE:
http://biz.thestar.com.my/news/story.asp?file=/2010/5/26/business/6338825&sec=business

That's all folks, thanks for having the time and patience to read this article...

The Star, Thursday February 25, 2010

Fuel subsidy scheme shelved, originally set to be implemented on May 1

By EUGENE MAHALINGAM

eugenicz@thestar.com.my

PETALING JAYA: The Government’s proposed fuel subsidy scheme based on the engine capacity of vehicles has apparently been shelved.

Sources indicate that the plan, which was originally set to be implemented on May 1, will not proceed even though a lot of the preparatory work has entered the final stage.

“We were so close to getting this off the ground,’’ said a source.

The Government had planned to introduce a tiered pricing system for petrol, depending on engine capacity, while foreigners would have to pay the market price.

According to reports, the plan called for the mandatory use of MyKad to differentiate Malaysians from foreigners, requiring the need for MyKad readers at petrol stations.

Subsidised petrol would be capped to a certain amount of litres a month per user for owners of vehicles with engine capacities of below a certain threshold. The reported upper limit eligibility for the petrol subsidy is 2,000cc. Owners of cars with bigger engine capacities would be exempted from the subsidy.

However, many had considered the proposed scheme to be very unfavourable and cumbersome to enforce and some have suggested that the subsidy itself should be removed.
RAM Holdings Bhd chief economist Dr Yeah Kim Leng said scrapping the scheme and moving to a “fully market-driven” system was a better option in the long run.

“The public has to realise the fuel subsidy scheme is not sustainable as it impacts the Government’s finances. Removing the subsidy would reduce over-consumption and promote more efficient use of our country’s resources,” he said when contacted by StarBiz.
Yeah said many countries, including Indonesia and Sri Lanka, were practising a free-float system, where fuel prices were based on global oil prices.

“This is the ideal but Malaysia is accustomed to subsidised prices. From an economic standpoint, it is not sustainable.”

Yeah said removing the fuel subsidy completely would create short-term strain on the lower income group as they would have difficulty coping with the sharp increase (in fuel prices).
“The best thing to do is to gradually reduce the fuel subsidy or it would create inflationary pressure.”

Yeah said the proposed tier system was unfair and vulnerable to abuse.
“It is unfair from the individual perspective because everyone is entitled to equal fuel subsidy levels.”

He also cited the case where some fishermen were purchasing diesel at subsidised prices and were selling it for profit.

“Owners of lower cc engine cars could sell their entitlement to owners of higher cc vehicles. This situation could crop up if the system is not watertight.

“Principally, it (the tiered fuel subsidy scheme) seems desirable but administratively, it is no go,” said Yeah.

An analyst from a local bank-backed brokerage said the tier system would be difficult to monitor and the Government should do away with the fuel subsidy scheme.

“The only way to become a high-income nation is to remove the fuel subsidy. There would be near-term implications but eventually the public will be able to adjust. The removal should however be gradual,” he said.

He also said the Government should improve its public transport infrastructure if it were to reduce or remove fuel subsidies.

“The Government could also do away with excise duties (for imported vehicles) but I don’t think that would happen any time soon.”

Mercedes-Benz Malaysia Sdn Bhd vice-president of sales and marketing for passenger cars Florian Mueller said he could identify with the Government’s decision to introduce a fuel subsidy scheme.

“In the long run, the Government is looking at how to reduce fuel consumption. I think the best thing to look at next is how we can encourage people to purchase vehicles with the latest technology or encourage the manufacturer to build car engines with lower fuel consumption.
“This would also encourage other players to introduce technology that encourages fuel saving. The Government could also make it mandatory for car owners to replace old engines if they are not fulfilling emission standards, just like they do in Europe.”

END OF SOURCE...


My Comment:  THANK GOD!!!  GOD IS GOOD!

That's all folks, thanks for having the time and patience to read this blog entry...

SOURCE:
1) http://biz.thestar.com.my/news/story.asp?file=/2010/2/25/
business/5741670&sec=business

ARTICLE: Forget subsidies, just give me cash

Forget subsidies, just give me cash

By Hafiz Noor, The Malaysian Insider

JAN 19 — In spite of opposition that saw the streets of Kuala Lumpur filled with pro-fuel subsidy groups during the Abdullah administration, efforts to liberalise the fuel subsidy regime has gone a long way.

Out of a number of its arguments, one that criticises the untargeted and blanket nature of the policy has gained tremendous traction. The fact that it benefits those who do not need or deserve the subsidy is clearly one of the main motivators — the bigger drivers are probably cost and waste — behind the reformation of the policy.

The Najib administration is addressing this particular criticism. That has resulted in multiple novel moves and proposals from the federal government. Among the proposals reported in the mainstream media are different prices for different groups, a cap on subsidised fuel consumption and access to subsidy based on engine size. While the moves and proposals may reduce the size of fuel subsidy either in value or in quantity, the proposals may appear too convoluted.

I appreciate the government’s effort at making the policy more targeted hence, less wasteful in terms of opportunity cost. Yet, these novel ways are really unnecessary given its simpler alternatives. In fact, the more convoluted the methods are, the more complex the implementation will be. That is a recipe for a disaster, policy wise.

Just observe the recent attempt to limit the sale of subsidised fuel to foreigners at the border. So complicated was it that everybody was confused and in the end, it did not work. Consumers found ways around the restriction.

There is a better and much simpler way to do to this.

Before we proceed to that better and simpler policy, it is crucial for us to recall the purpose of the fuel subsidy. Its goal is ultimately to reduce the cost of living of the less well-to-do Malaysians. On top of that, fuel subsidy is not the only way to achieve that goal.

With that in mind, the better alternative to the fuel subsidy is a simple cash transfer from the government to those who deserve it.

Why cash transfer?

The first reason is that it paves the way for total elimination of fuel subsidy to free up the market. Since free prices signal scarcity, individuals and entities will make decisions that are more reflective of the reality of the energy market. On top of that, it creates real competition among pump owners. The same system of free prices already exists in the United States and Australia. Its effectiveness is proven.

Not only that, elimination of subsidy at the pump reduces consumption, all else being constant. That means lower carbon emissions. In times when carbon emissions are a worldwide concern and in light of the Najib administration’s promise to announce a carbon cut roadmap in the near future, this is an opportunity to integrate transportation and energy policies together environmental policy. Such integration is important given that, according to the International Energy Agency in 2007, the transportation sector was the source of 30 per cent of Malaysia’s carbon dioxide emissions in 2005.

Thirdly, cash can be used for a variety of things and not just fuel. Maybe a beneficiary of such a cash transfer appreciates books or food more than fuel. This has the potential of increasing the beneficiary’s welfare higher than what a fuel subsidy policy can bring. If the beneficiary does appreciate fuel more than anything else, then he or she can simply buy the same amount of fuel he or she would have otherwise bought under the fuel subsidy policy. In other words, there are more choices. The economics behind cash transfer is clearly more welfare enhancing than a simple fuel subsidy.

The next question is, naturally, how to do it.

If the sale of subsidised fuel is to be limited, then the government will have a good idea about the maximum amount of money it needs to spend on fuel subsidy. Furthermore, the lower the cap, the higher the likelihood a beneficiary of the subsidy will exhaust his or her quota. From there on, certain statistical manipulations can give us the size of money transfer per capita required to make the cash transfer method the equivalent of the fuel subsidy policy in terms of value.

The cash transfer itself can be delivered to the deserving via the existing tax system. Here is another beauty of cash transfer. It pays only to those who have filed their taxes. Thus, this is yet another incentive for those who have yet to file their tax to finally do so.

For those who just want to fill up their vehicles, here is another reason to support a simple cash transfer instead of an explicit targeted fuel subsidy policy: no weird rule at the pump.

So, what about it that is not to like?

*The views written here are the personal opinion of the columnist.

END OF ARTICLE.  That's all folks, thanks for reading this WONDERFULLY WRITTEN ARTICLE. 

SOURCE: 

 1) http://www.themalaysianinsider.com/index.php/opinion/alice-nah/index.php/opinion/
hafiznoorshams/50045-forget-subsidies-just-give-me-cash

ARTICLE: Loopholes for buying fuel with MyKad — Lim Sue Goan

Loopholes for buying fuel with MyKad — Lim Sue Goan

JAN 18 — This would be the busiest year for the Domestic Trade and Consumer Affairs Ministry. As the government is going to reduce subsidies on necessities, law enforcement officials would have to be diligent in their duties to prevent profiteers from fishing in troubled waters. Under the “1Malaysia” slogan, the government would have to take care of all Malaysians and for the very first time, it has listed turkey and pork as controlled items during Christmas and Chinese New Year.

However, there are many corrupt practices in the market, ordinary people are sometimes smarter than the officials. No matter how stringent the controls are, they still have ways to escape from being caught by law enforcement officials.

Take the implementation of buying fuel with MyKad, which is scheduled to be launched on 1 May, as an example, there are in fact many loopholes for the policy.

Under the new fuel subsidy structure, only Malaysian owners of vehicles with low engine capacity will enjoy full fuel subsidy, each person is limited to enjoy fuel subsidy for one vehicle and each person is allowed to pump limited amount of fuel every month. They have to face a lot of technical problems in order to implement such new policy.

Firstly, there are thousands of millions of different vehicles in the country. Would the government be able to match all the information of Malaysian citizens with the vehicles they own using computer system within three months? Moreover, some people have more than one vehicle registered under their names, how is the government going to ensure zero computer system error?

It is said that the government will also ask for assistants from banks, hoping to verify the information of vehicle owners through credit card records. The Road Transport Department (JPJ) will as well have to be psychologically prepared that many people may want to “change” the ownership of their vehicles to their relatives in order to enjoy fuel subsidy. Thus, it is not going to be a simple task.

In the first stage of implementation, there will be various errors and complaints for sure, including the computer system may be down; readers fail to read MyKad, no record in the computer system, some people are not allowed to enjoy fuel subsidy even thought they have not reach the limit amount yet, some small cars are not able to enjoy the subsidy while big vehicles can, or lorry drivers may complain that subsidised diesel is always sold out.

Secondly, how is the Domestic Trade and Consumer Affairs Ministry going to stop some Malaysians from lending their MyKads to foreigners? Foreigners may register their vehicles under borrowed Malaysian names to enjoy the subsidy. The readers in petrol stations recognise only cards but not the persons, the policy may become a profit-making opportunity for people living near country borders.

Thirdly, the policy in which vehicle owners are allowed to pump only a limited amount of fuel monthly may help to stop smuggling activities but fuel consumption is sometimes difficult to estimate. For example, we will have to consume more fuel during festive seasons as we have to return to our home towns. Also, sales persons and field staff have to go out very frequently. Such a policy will cause fierce opposition.

If a person does not purchase fuel up to the limited amount this year, could the remaining quota being carried forward to next month? How much is the reasonable fuel consumption amount? A total of 50 litres would be more than enough for those working near their houses but for sales persons, it may not enough even for two days. Also, those who cannot use up the quota may resell the remaining amount.

The government may think that the new mechanism can save a significant amount of subsidies but it does not take into account that if it is not effectively and smoothly implemented, it my affect the operation of industry and commerce, as well as cause an inflation.

The most crucial question is, how is the government going to use the billions of ringgit saved from the reduce of subsidies? The people will never wish to see their hard-earned money to be simply squandered and wasted. — mysinchew.com

END OF ARTICLE:

Source: 

1) 

http://www.mysinchew.com/node/34120

Thay's all folks, thanks for having the time and patience to read this SECOND WELL WRITTEN ARTICLE.

ARTICLE: An approaching nightmare: Leisure days have LONG GONE...

An approaching nightmare

BY — Lim Sue Goan,

JAN 15 — The Malaysian fuel prices in 1997 was cheaper than mineral water. The price for mineral water was RM1.50 per litre while the price for fuel was RM1.10 per litre at that time.

The country was almost as rich as Arab countries. Such a scenario was not far away but a few months later, we will have to use MyKad in order to enjoy subsidised fuel. Leisure days have long gone.

Malaysians no longer enjoy cheap fuel and sugar. It tells us that our national treasury is short of money. Factors that caused the shortage of money have been mentioned for many times.

They include mismanagement, overspending, corruption, declining petroleum revenues and economic recession.

In order to increase revenue and reduce deficit, the government has to reduce subsidies (the government will reduce RM4 billion of subsidies this year) and impose more taxes (service tax for credit cards, tax on disposal of real property, as well as the Goods and Services Tax).

Therefore, the public must be psychologically prepared to face the bitterness of price hikes.

In order to lead the country out of the current economic predicament, the government has introduced a new economic model to turn the country into a high-income economy.

Firstly, the people are still not clear about the structure of the new economic model. We only know that it is going to be a knowledge-based economy that requires the creativity of the people to develop the areas of services and technology.

In order to turn an economy relying on foreign workers into a knowledge-based economy, there must be a solid foundation and conditions, such as high value-added areas, experts and research bases. And it is impossible to be achieved overnight.

Secondly, Malaysians are lack of high standard skills, effectiveness and competitiveness. How are employees going to increase the staff’s salary? The level of income is measured based on the average.

It will be meaningless if only a small number of people are able to gain high income while the majority earn less.

It is worrying that before the increase of the average income of Malaysians, we must first bear the pain of “high costs”, including the inflation brought by subsidy reduction, as well as the possible increase of water and electricity tariffs and tolls.

In fact, Malaysians earn very low incomes. For example, the monthly basic salary for security guards is between RM350 to RM400, while factory workers earn RM480 and estate workers earn RM600 per month.

These low-income earners will starve to death in urban areas and only this year, the government announces the minimum basic salary system for security guards, private clinic assistants, estate workers and those working in the catering and hotel industry. How are we going to achieve the dream of turning the country into a high-income economy?

It is reported that more and more wage earners in Singapore enjoy luxurious life in the Iskandar special economic zone during weekends. For them, luxury houses in the economic zone is cheaper compared to a three-room apartment in Singapore and the monthly house loan is even lower than a car loan in Singapore.

Even a semi-detached or a detached house is relatively cheap compared to housing prices in foreign countries or if it is calculated with foreign exchange rates. However, wage earners in Malaysia cannot even afford a RM300,000 house, not to mention a luxurious one.

Malaysians have become “second-class people” in this piece of land because of low income.

Many people are likely to become “poor” if we have to face inflation and at the same time, pay various taxes while our incomes remain unchanged. It is an approaching nightmare for Malaysians. — mysinchew.com

END OF ARTICLE:

SOURCE:

1) http://www.mysinchew.com/node/34017

INTERVIEW: Still in the dark over system

The Star, Sunday January 17, 2010

Still in the dark over system

By SHAHANAAZ HABIB

shaz@thestar.com.my

The Government’s plan to impose a two-tier pricing mechanism for petrol by May 1 has given rise to many questions but answers are hard to come by. Just how will the mechanics be worked out?

THE Government wants to cut down on subsidies it pays on petrol by implementing a two-tier pricing system by May 1. Domestic Trade and Co-operatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob says the principle has been agreed upon but details are still being worked out. He has asked the public to give him their views via his Facebook.

The move to reduce subsidies, including for sugar and other consumer products, is a very sensitive and difficult process, he admits.

OTOREVIEW'S NOTE: Here's an Interview between, The Star Reporter, Shahanaaz Habib and Domestic Trade and Co-operatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob.  ENJOY:

Q> People want to be informed early about the new fuel pricing mechanism so that they can be prepared.
A> I agree but we have not fully settled on the exact mechanism. It’s still under discussion, that’s why we are still unable to announce details at this moment.
What I was able to announce is the principle of the subsidy. Wherever you go in the world, subsidies are targeted at needy groups. In the case of petrol for our country, the poor or the middle income group.

But now everyone is getting the petrol subsidy, including foreigners, which means the Government is subsidising citizens, non-citizens and the well-to-do. This is wrong. The principle of the new mechanism is that the subsidies will be given to only the targeted group.

Filling up: Details on the two-tier fuel pricing system are still being worked out.

Q> Since the Government is still discussing the mechanism, maybe it won’t be implemented in May?
A>That May 1 date is still on target but it will only be for the peninsula. For Sabah and Sarawak, the implementation will be later. The people there use four-wheel drive vehicles to get around and most are about 3,000cc. Even the poor are forced to use that because of the terrain. We will eventually have a mechanism for them.

Q> How can people give their feedback constructively if they are not given some details of the proposal?
A>But they are already doing that now. Even though no one is certain about what is going to happen on May 1, the debate and discussion have already started. Even the principle of the subsidy is being questioned. Even the rich are thinking they should be entitled to the subsidy.
We are listening to the opinions and suggestions.

Q>Is the Government looking at engine capacity or the make of the car to determine who gets the subsidy? What engine capacity are you looking at?
A>With cars, the best is to look at engine capacity. It’s wrong to go by the brand because that would be perceived as discriminating against a make. You can’t say whoever owns a BMW is not entitled to subsidised petrol; BMW would be mad at us. That’s why engine capacity is the best consideration. As for the engine capacity, we will announce later.

Q> How about expensive cars like the Mini Cooper, which has a small engine but cost over RM200,000?
A>There are also some kampung folk who use very old Mercedes Benz, which is very cheap – costing about RM10,000 – but the engine capacity is big. Whatever we do, we can’t cover 100%. There are bound to be some who won’t be covered. This is true of whatever policy we make; it can’t be 100% perfect. - Has the CHEEK to say  this comment, WHAT A DOOFUS! ED.  There will definitely be some who are not satisfied or who terlepas (escape).

Q> Will there be two different pumps at petrol stations?
A>We are still working out the mechanics but definitely not two pumps. We are looking at pumps having two prices or perhaps just having the market price on it but those entitled to the subsidised price get to pay less and get receipts for it.

Q> Who decides on the engine capacity at the petrol station?
A>We are considering putting a chip into our MyKad to register the car that’s entitled to the subsidised petrol. Each person is eligible for subsidised petrol for only one car. It’s not fair if you have 10 (small engine capacity) cars and you get subsidies for all 10. If the car is registered to different people, for example the wife, son or daughter, then each is eligible to the subsidy; one person per car. Children have to be 18 or above because, to own a car, you must be at least 18.

Q> So we won’t be handing our MyKad to some foreign petrol attendant to check?
A>I don’t think that will be the case because these days we are IT savvy. It’ll probably be swiping, like you do with the credit card. It will be a convenient system.  - What can I say!?? ED


Q> People who own big cars grumble that they already pay high duties for the imported cars. They are also paying high road taxes, so why shouldn’t they enjoy subsidised petrol because they are taxpayers too?
A>The principle of the subsidy is that those entitled are the poor and middle income group. But we are listening to all views and there have been so many because everybody has been talking based on presumption.

Q> But people argue that it’s better to disclose some details of what the Government is proposing so that they can give their views rather than speculate.
A>I can’t give details because we are still discussing (them). In due time, the Government will announce the engine capacity and whether there is a cap on how many litres per person per month. If there is no cap per car, people will abuse it. They will use their Mykad to buy as much petrol as possible, transfer it into a drum and then sell it to those who don’t qualify for subsidies. So the question of how many litres will be announced later. MAN!  This guy speaks without WISDOM! - Ed.

Q> How about those who travel outstation for work or those in big cities who travel long distances daily because they can’t afford to buy or rent homes near their offices?
A>We are looking at all angles. Someone who lives in a small town and goes to work nearby will benefit. We haven’t fixed a cap yet but if there is no limit, it will definitely be abused. Those near the Thai border will sell it over the border and, in other places, people will sell it to those who are not entitled. So there should definitely be a cap.

Q> Is the Government also looking at reducing the subsidy on diesel?
A>Not right now. The real market price should be RM2.09 per litre for diesel but fishermen pay only RM1.20, public transport such as school buses, public buses, lorries and prime movers pay RM1.43, normal cars RM1.70 and airport taxis RM1.58. - This is the ONLY PART OF THIS INTERVIEW HE SAID WHICH was NICE TO READ.  The rest?  Read on...  YOU'LL BE PISSED with what he SAYS!  You've been warned - ED


The multiplier effect of diesel is different from petrol because petrol is not used for public transport and to transport goods. If we increase the price of diesel, bus fares will go up and the price of goods will increase immediately because transportation costs would increase. School bus operators, too, would want to hike up fares. There are a lot more considerations with regard to diesel than petrol.

Q> What products is Malaysia still subsidising? Are we moving towards a no-subsidy regime?
A>Sugar, cooking oil, flour, ST15 rice, petrol, diesel, LPG gas, and NGV gas for taxis. The fuel subsidies make up the highest amount. It was RM5.6bil last year (in 2008 when world oil price was higher, the subsidy was RM18.8bil).


We are not moving towards a no-subsidy regime yet. I don’t foresee us doing away with the subsidy for basic items like rice and petrol. What we are trying to do now is to focus on the target group. There has been too much leakage because people who are not eligible are getting subsidies.

Q> It has been reported that Malaysia by 2011 will be a net importer of oil, so shouldn’t we stop giving subsidy for oil?
A>The people are not ready. When I raised the price of sugar by just 20 sen, people got angry. We must educate our people. The problem with us is that when we get something, there is no way the Government can take it back. Sugar was never a subsidised product. The Government only started subsidising sugar in 2009. Before that, because the world sugar prices were low – at US$14.50 per kg – we had no subsidy at all. But last year, the price shot up. The Government wanted to cushion the effect and started subsidising sugar. Taking it back now is very difficult because people think it is their right. - I AM SPEECHLESS with What he said... He clearly speaks without thinking...


Q> Isn’t there ample justification to withdraw the subsidy on sugar because less consumption is better?
A>Many people, including consumer and health groups, feel there is no reason for the Government to subsidise sugar because it is bad for health. It can be likened to subsidising cigarettes. The sugar subsidy only makes people use more sugar every day and this will increase the number of chronic illnesses in the country.

This is what people should understand. We have to educate people and make them aware. If we do not educate them, it would be difficult because we have been enjoying subsidies for too long. Last year, the subsidy for sugar was RM720mil. This year, despite the 20 sen increase, the Government will have to fork out an even higher subsidy of about RM1.008bil.

Q> Biscuit and soft drinks manufacturers buy sugar at subsidised prices too. So can we have a two-tier system where industries pay the real market price?
A>We should actually do this. The problem is if we do, there will be a shortage of sugar because people will start hoarding sugar. Retailers, too, will manipulate the supply and sell to industries as they pay higher prices. This will cause problems for consumers. As far as retailers are concerned, why should they sell to consumers for RM1.65 when they can sell at higher prices to factories?

For example, if the real market price is RM2.45 and the factory offers retailers RM2.20, the factory saves cost and the retailer makes more money than selling it for RM1.65 to consumers. That’s our worry about putting two prices for sugar in place. This is what happened with subsidised diesel being sold on the black market.

Q> What is the hardest subsidy for the Government to withdraw?
A>Everything! The Government will spend RM104mil this year to subsidise flour. Last year, it was RM89mil. If we cut this, the Indians and roti canai lovers will make noise. So we are maintaining the price at RM1.35 because it is a staple food for Indians. Rice, too, is staple food for the Malays, Chinese and also Indians. It is also very hard to raise diesel price because the price of other goods will go up.


As for petrol, we just have to raise the price by 5 sen and people will get angry.

 With sugar, too, people made noise when we hiked the price up by 20 sen even though sugar consumption is known to cause harm. However, they are not really worried about sugar consumption at home because they consume only 1kg or 2kg a month and a 20 sen hike per kg is not a burden at all. What they are worried about is the multiplier effect – the effect it would have on food prices outside.

Q> Has the objection against the sugar hike been very serious?
A>Not so much because consumer associations have come out in support of the Government. We argue that for health reasons people should consume less, so why buy sweet things outside? But people still fear a hike in prices of food products. That’s why we will continue our campaign of reducing sugar in food and drinks.

END OF INTERVIEW.  

Man, I have only 2 WORDS after reading this INTERVIEW.  I'm very disappointed with what he said.  Clearly, he is INSENSITIVE with what he said, saying the RAKYAT Spoiled, RAKYAT will make noise, this and that...

He even have the CHEEK to quote this:  "Whatever we do, we can’t cover 100%. There are bound to be some who won’t be covered. This is true of whatever policy we make; it can’t be 100% perfect. There will definitely be some who are not satisfied or who terlepas (escape).".    WHO DOES HE THINK HE IS?  Reading the above makes me PI$SED OFF!!!

MY 2 WORDS: "SACK HIM!!!".   This will END ALL THIS HAVOC he's trying to CREATE BY MAY 1.

Why?
Cause he's Insensitive to the RAKYAT NEEDS. As I highlighted the above article in "BOLD AND ITALIC".

The Star: Sunday January 17, 2010

New rules to limit amount of petrol a vehicle owner can buy

By SHAHANAAZ HABIB

shaz@thestar.com.my

KUALA LUMPUR: The Government is likely to put a cap on the amount of subsidised petrol a car owner can buy monthly, when the new petrol pricing mechanism starts on May 1.
Without a cap on the amount for each car, those eligible for the subsidised petrol would “definitely abuse it,” said Domestic Trade, Co-operatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob.

“They will buy as much petrol as possible and transfer it into a drum or somewhere, and then sell it to those who are not eligible.

“Those living near Thailand will sell it across the border,” he said in an interview yesterday.
Ismail Sabri said the Government was still discussing how much the limit should be and said this would be revealed to the public when it was fixed.

He admitted that those travelling long distances frequently and had no transport allowance might lose out due to the monthly cap.  However, there were others who would stand to gain, such as those driving small cars, living in small towns and working close to where they live.

The Government recently announced that it would fix a two-tier pricing system for petrol, depending on engine capacity, while foreigners would have to pay the market price.
Currently, the Government is subsidising petrol at 30 sen per litre for all. The market price for RON 95 is RM2.10 per litre but because of the subsidy, the pump price is only RM1.80.
Ismail Sabri said a person would be eligible for subsidised petrol for only one car.

He said, however, that if the cars were registered to different people, like the owner’s wife or children, then each would be eligible for the subsidised petrol.

On whether there would be two different pumps (subsidised and not subsidised) at petrol stations, he said that would not be the case; instead the pumps would have two prices or just the market price but those entitled to the subsidised price would pay less.

The Government was also looking at inserting a chip into the MyKad with information of the car, so that those eligible could swipe their MyKad for subsidised petrol.

The new pricing mechanism would apply only to the peninsula in the initial phase but it has raised many questions with few answers.

In Butterworth, DERRICK VINESH reported that Ismail Sabri said the archaic Hire Purchase Act would reviewed to protect car buyers from being harassed by car repossessors and finance companies.

“The laws at present seem to favour the banks and finance companies rather than consumers.
“Under the 1Malaysia concept, the people come first,” he said after opening the Consumer Awareness campaign at Sunway Carnival Mall Seberang Jaya here yesterday.

The other Acts also to be amended were the Copyright Act; Consumer Protection Act, Price Control Act and Direct Selling Act.

“We hope the Acts can be amended and passed in Parliament by the third quarter of the year,” he said.  At another function, Ismail Sabri said amendment to the Copyright Act 1987 would make owning even one copy of a pirated VCD or DVD an offence.

SOURCE:
1) http://thestar.com.my/news/story.asp?file=/2010/1/17/nation/5490845&sec=nation

The Star: Fuel price by car size + my opinion after the article

The Star, Friday January 8, 2010

Fuel price by car size

By ZALINAH NOORDIN

PETALING JAYA: The bigger your car, the more you will have to pay for petrol from May 1.
This is because the Government is going to change the way fuel is subsidised.

It is planning for a fuel pricing mechanism that will ensure only targeted groups, particularly those from the lower-income, will receive fuel subsidy.

Also, foreigners who drive into the country to fill up their tanks will not be eligible for subsidy and will have to pay more for fuel.

“The bigger the engine, the higher petrol will cost,” Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob said yesterday.

The move was based on the assumption that those in the lower income group would normally drive a car with a lower engine capacity and thus be eligible for the subsidy, he said.

“For RON95 petrol, the subsidy is 30 sen per litre. The current price of RON95 petrol is RM1.80 compared with the actual price of RM2.10.
 
“Malaysians who are not eligible are those who drive a higher engine capacity car or non-Malaysians. They will have to pay RM2.10 or more for RON95,” he told a press conference after launching the new corporate identity of the F&N soft drinks division here yesterday.

Besides introducing the new structure, the ministry also plans to make the use of MyKad compulsory when buying petrol. “There are some Thai nationals who drive into Malaysia to fill up their tank because petrol is such an expensive commodity in their country,” he said.

In Muar. Deputy Prime Minister Tan Sri Muhyiddin Yassin said the Government was in the final stages of drafting a policy on the fuel subsidy which will be a “win-win situation” for both the Government and the people. He said that the new policy would identify people who were eligible for subsidy.

Umno Youth chief Khairy Jamaluddin had previously broached the subject about giving petrol subsidy to the right people. He said the subsidy must reach only the people who needed it most and giving subsidy across the board was a misallocation of funds.

On the subsidies for flour, sugar and gas, Ismail said they would be retained.  “Although the price for sugar has been increased by 20 sen, the Government is still providing subsidy for the commodity,” he said.
Ismail food outlet operators should not take advantage of the increase in sugar price to mark up the price of their products. “Food outlet operators should not regard this as an opportunity to raise prices,” he said.


END OF SOURCE: http://www.thestar.com.my/news/story.asp?file=/2010/1/8/nation/5431667&sec=nation

MY (Jeff Lim's) OPINION:


What a STUPID IDEA!  Why I said so?  Here's 2 scenario. 

Senario 1: BIG CC car owners DOESN'T mean RICH okay!!!  My father's friend who's in his 70s owns a 1989 BMW 740i and he's NOT RICH.  His 740i now only worth RM10,000!!!  He bought off this car 10 years ago upon retirement for mere RM80,000 only.  Ie. the price of a new Toyota Vios.


Scenario 2: Those Mercedes C200 Kompressor, E200 Kompressor and LATEST E200CGI, E250CGI owners will BENEFIT THE MOST as these cars were 1796cc only and were price up to RM458,000 for E250CGI Coupe.   I forsee that the above mentioned cars' sales will SHOT UP as SMART RICH people will take advantage of this LOOPHOLE.  They will LAUGH ALL THE WAY TO THE BANK!  Another Example: VW cars with 1.4TSI engine (eg. Jetta).  They costs roughly RM160,000 yet they enjoyed the SUBSIDY being a 1400cc car.

Lastly,  a NEW MAZDA RX8 which costs RM228,000 buyer pays only 1.3CC Roadtax! 


THe Government people CLEARLY OVERLOOKED the above scenario folks who'll TAKE ADVANTAGE of the SUBSIDY!!!



Jeff Lim signing off...