RM60b? Hogwash over two years!
BLOGGING FROM PARLIAMENT
There is hogwash in the package.
Firstly, Gross Domestic Product (GDP) is calculated on an annualised basis. Thus, it is quite misleading for Najib to say the RM60 billion allocated for the Second Stimulus Package (mini budget) -- to be spent over two years, 2009 through 2010 -- equals 9% of the country's GDP.
Secondly, in a nutshell, of the RM60 billion pledged, only RM15b is real out-of-pocket money from the federal coffers in the form of fiscal injection -- and for it to be spent over two years (RM10b this year, RM5b in 2010), it means only an average of RM7.5b of real money will get into the system to pump-prime domestic consumption, while nobody can guarantee Malaysia get onto the steep climb back up the U-Curve of a recession by 2010.
The balance of the Package amount are RM25b for guarantee funds (presumably for commercial and corporate entities but details unknown), RM10b for equity investments (target counters unknown), RM7b for Private Financial Initiatives (PFI) and off-budget programmes, and RM3b for tax incentives.
No details have come forth as I listened live in the Dewan Rakyat. I am exercising extra caution over what is to be done in equity investments -- whether it's to be pork barrel.
And I dread to see if the RM25b are to be used to guarantee funds geared by politically-linked entities. If that happens, and Malaysia often offered little surprises if past records are anything to go by, then we should ask: What is in there in this Mini Budget to benefit all the Joes on the street?
Thirdly, there is no 'quick fix' element in the package, meaning critical short-term measures, if it were meant to stimulate the economy during crisis time. No, we don't see programmes like direct grants or unemployment benefits to the target groups facing the crunch. There is no tax cut, either.
Neither have I heard anything strategic and tactical to rescue the low-income groups and the workforce stressed in the current economic crunch through a direct link to their pockets. From now, after deducting cost-of-living expenses and loan repayment for house and car, they need to put three square meals on the table for the family before a new job can be found, if any.
SUBSIDIES. No stimulus plans will be complete in Malaysia without subsidies.
RM674 million has been set aside as subsidy to cushion price increase of daily essentials like sugar, wheat flour and bread.
RM480 million is to pay off toll concessionaires to keep toll rates down, and not buy them over, so the gravy train will travel on.
Thus far, the Finance Minister has yet to touch the source of fund, except government bonds, to finance the stimulus package.
Buckle your seat belts and get set for the recession.
BY THE WAY... Tengku Razaleigh, who said the Second Stimulus is too late in roll-out, is sitting in the same hall, listening with his eyes closed.
Comments
Thanks for the live updates Jeff.
Great to know politicians like you are so attentive while the other one who said the stimulus package is too late sat in the hall with his eyes closed.
I remember reading that DAP proposed a RM 50 bil plan.
I hope DAP's Economist and think tank can produce some rationality on the RM 60 bil vs DAP's RM 50 bil.
Leave politics out if possible and keep us posted here.
Posted by: manifestogwl![[TypeKey Profile Page]](http://www.jeffooi.my/nav-commenters.gif)
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March 10, 2009 07:09 PM
Yeah it seems this so-called stimulus package does little to solve long-term problems like unemployable graduates nor reduce/eliminate the toll burden. If they had spent the money to buy out PLUS, it would have created a major chain of stimulus (or at least not cause people to cut back on travel)
Posted by: hjangus![[TypeKey Profile Page]](http://www.jeffooi.my/nav-commenters.gif)
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March 10, 2009 10:01 PM
Jeff's right. It's creative budgeting. The govt doesn't have that much funds. The rakyat will ask what has happened to all their money. The govt has no answer that it can reveal without showing it only has been trumpeting about our reserves and economic performances all those years.
Another thing, subsidies for controlled items shouldn't be counted in; they're not something that the govt hasn't been doing all along;
Thirdly, they should ask that man to pay for the increased tolls. After all, it was his administration and his cronies who are the cause of such ruinous agreements. It's also incestuous. Khazanah owns chunks of those concessionaires, doesn't it?
Too many of the proposals are like promissory notes. Creative budgeting today can become creative accounting tomorrow; they can't spend what they don't have anyway so it'll be their reading of the market that will determine when they stop within the period announced. That may happen when the last dribbles of funds run out, including what they can get out of the EPF.
Fourthly, you hear of any other countries' administration pumping money into their own equity markets?
Ten percent of our population pay taxes. The govt is using tax money to buy equities at present depressed rates to create an umno-controlled economy later. The question to ask is how many umno-controlled enterprises have not sunk todate? When they started to toy about using your EPF to invest in its subsidiary Valuecap which was bleeding from equity plays, you already know it's just using those ten percent taxpayers money to shore up someone's shares. Don't the taxpayers have a right to ask why and which are the counters and who really benefit from it? How does shoring up some counters with such a sum help the rakyat above the drowning line? Will they, for instance, be selling those counters later when prices are better, and giving the difference to the rakyat? What?
Maybe madoff can help give an answer on this package.
Someone's going to get stimulated by it. As they say, it's the "full" package.
This country? finished.
Posted by: Neil![[TypeKey Profile Page]](http://www.jeffooi.my/nav-commenters.gif)
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March 11, 2009 11:01 AM
Every year, Malaysian hear the same old rubbish of : cannot increase the pay of government servant because it is too much.
And now, everyone can see the freaking chicken and egg rubbish : Instead of streamline and make the government more efficient, the smart ass create another 63,000 "government vacancy" (while 15,000 are "contract worker")
If each of this draw a cheap RM1000 per month, this mean
63,000 x 1000 x 12 = RM756 Millions. And we benefits,etc, RM 1 Billions is spend on this "WTF Malaysia bloated government".
This is creative.
Posted by: moo_t![[TypeKey Profile Page]](http://www.jeffooi.my/nav-commenters.gif)
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March 11, 2009 07:33 PM