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| Image of a Subsidies Nation |
SAVING from the eliminating of subsidies for sugar and fuel have been channelled into programmes to assist the people. Deputy Finance Minister Johari Abdul Ghani said by eliminating the sugar subsidy in November, 2013, the government was able to save RM300 million per year. "With the fuel subsidy rationalisation move for Ron95 and diesel since December 2015, the estimated saving for 2015 is close to RM11 billion," he said. Johari added the savings was channelled into financial programmes and government aid including 1Malaysia People's Aid (BR1M). See also People Problems...Source: www.thesundaily.my / December 9, 2015 / pg 04.
(At the Dewan Negara)
Economics - The most concise, non-abusive, definition is the study of how society uses its scarce resources. It is also defined as the social science that deals with the production, distribution and consumption of goods and services and with the theory and management of economies or economic systems. see also wikipedia.org/economics
Economics is much more than just numbers
and graphs. In fact, we can use economics to explain much of what we encounter
in our daily lives. For instance, why is customer service at your local
restaurant usually better than that of the cable company? To find the answer we
can take a closer look at the incentives at play. For another example, we look
to eighteenth century Great Britain. What did bad incentives have to do with
the death rate of prisoners shipped from England to Australia? Let’s find out
together in this first video of MRU’s course on Principles of Economics:
Microeconomics.
Why do taxes exist?
What are the effects of taxes? We discuss how taxes affect consumer surplus and
producer surplus and discuss the concept of deadweight loss at length. We’ll
also look at a real-world example of deadweight loss: taxing luxury yachts in
the 1990s.
Who bears the burden
of a tax? Buyers or sellers? Why is it that the more elastic side of the market
pays a smaller share of a tax? Again, we’ll apply what we know to the example
of Social Security taxes and also look at the health insurance mandate as a
part of the Affordable Care Act. Who pays for the mandate? The employers or the
workers? We’ll also look at supply and demand of labor. Is the demand for labor
more elastic than the supply?
What is a subsidy? A
subsidy is really just a negative or reverse tax. Instead of collecting money
in the form of a tax, the government gives money to consumer or producers. In this
video, we look at the subsidy wedge and who benefits the most from different
subsidies.
Malaysians Struggling to Cope With Rising Cost of Living
How Can the Rakyat's Money be Subsidies.
Heavy Cost of Removing Subsidies.
To Many Street Demos Could Drive Investors Away.
Investopedia.com/political-economy
Economist Online
English Grammar Secrets
Selected Videos
World Economic Outlook
Malaysia
A Leaders lagacy
The Malaysian Reserve
Datuk Johari Abdul Ghani
Ahmad Husni Hanazlah
Ekonomi Malaysia
Malaysia's Education
Perpaduan
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Subsidies where it really counts
Saturday, 9 July
2016/ By Alan Tong
IN my last article, I mentioned that our average
household size is 4.4 people, which is about the household size of Australia
back in 1927, almost 90 years ago.
A few of my friends are wondering how we are going
to build an additional 3.4 million houses, and to catch up with the household
size of 2.6 people in Australia today.
It looks like a challenging task.
However, I believe things can be done if we look into the core of the issue and
solutions which are already available.
Our government has founded various
agencies and initiatives such as state economic development corporations
(SEDCs), Syarikat Perumahan Negara Bhd (SPNB), and 1Malaysia People’s Housing
Scheme (PR1MA) to address housing issues in Malaysia. Unfortunately, the
desirable outcome has yet to be achieved in spite of attempts over 40 years.
I can still recall the main objective
of the establishment of PKNS when I joined them as a director of the board in
1974.
Their main objective was to build mass
housing for the rakyat and to eliminate the shortage of affordable housing. But
in one of the recent news article, PKNS shared that they need to venture into
high end developments to subsidise its low-cost housing projects due to insufficient
funding. This has inevitably distracted the agency from delivering on its core
purpose of more affordable homes to the public.
Thus, it is
important for the Government to constantly re-visit the original objectives,
and fund the relevant agencies to achieve their original purpose of delivering
affordable housing.
Funding the
rakyat’s housing needs can be done through the savings from the Government’s
subsidies rationalisation programme carried out in recent years.
The
rationalisation programme involved subsidy cuts in fuel, sugar, cooking oil,
electricity and other items. This is a good move if the Government were to
redirect the savings to the right target group.
According to the
statistics from the Finance Ministry, fuel subsidies alone cost the rakyat
almost RM120bil from year 2006 to 2013! Imagine what we could have done with
the RM120bil instead. If the Government can build houses priced at RM250,000
with a subsidy of RM100,00 for each house, RM120bil would have been sufficient
to subsidise 1.2 million homes to the rakyat at RM150,000 each!
The removal of
fuel subsidies was a good step as it unfairly benefited everyone including
those who drive high consumption luxury vehicles. This creates the
opportunities for the Government to channel the savings towards subsidies that
really count, such as affordable housing.
Do you know that
Malaysia was one of the highest subsidised nations in the region?
Other than low
fuel prices, we also enjoyed the lowest cooking oil, sugar and flour prices in
the region prior to the subsidies rationalisation programme.
In one of his
previous presentation papers on subsidy, Datuk Seri Idris Jala, the CEO of
Performance Management and Delivery Unit mentioned that to reduce our rising
national debt and to facilitate growth, it is important to rationalise our
subsidies and reduce wastage. In the paper, he also said the poor and
disadvantaged should continue to be subsidised but it should be better targeted
to areas such as welfare assistance and affordable housing.
Rationalising
subsidies
With the recent
moves to rationalise subsidies on fuel, sugar, cooking oil and electricity, it
is the right time for the Government to hit the nail on the head in terms of
affordable housing issues.
Building millions
of homes is not an easy route. However, a journey of a thousand miles begins
with a single step.
In Singapore,
prior to the formation of the Housing and Development Board (HDB) in 1960, less
than 9% of Singaporeans stayed in government housing.
Today, with its
comprehensive approach, HDB has developed more than 1 million homes with 80% of
Singaporeans living in public housing, and 90% of them owning the HDB houses
they live in.
It is understood
that our government has rolled out various initiatives to address affordable
housing, but there is still much more to be done.
Hopefully it will
not take us 90 years to catch up with Australia. If we start to channel more
subsidy savings into affordable homes, and the respective agencies tasked with
the mission to carry out their plans effectively, we will soon achieve our
aspiration of housing the nation, and more rakyat would own the roof over their
heads.
Datuk Alan Tong has
over 50 years of experience in property development. He was the world president
of FIABCI International for 2005/2006 and awarded the Property Man of the Year
2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit
Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.
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