Paying for Anwar’s massive spending
There is no such thing as a free lunch in Malaysia
In October last year, prime and finance minister Anwar Ibrahim tabled Malaysia’s largest ever budget, with RM 394 billion spending. This created another RM 93 billion deficit to add onto Malaysia’s RM 1.5 trillion public debt. This debt is equal to 89 percent of Malaysia’s current GDP.
This misses the Madani economics goal of achieving a budget deficit within 3 percent of GDP, where this year’s deficit could fall between 4.5-5.0 percent of GDP.
People ask why the Ringgit is low. The money supply is being expanded to service this deficit. Even though only 1.5 percent inflation is claimed, this is why the prices of food (often in short supply) is rising. There is just too much money chasing too few goods, meaning the value of the Ringgit for purchasing goods is lower than last year.
This is a wholesaler’s delight.
No more free lunches
January 1 has come and now its time to pay. Madani is not taxing the rich and the corporate billionaires. With the new 10% sales tax on online purchased items of less than RM 500, it will be the young students and salaried workers who will bear the brunt of this regressive tax.
The regressive sales tax, which hits lower income consumers more than those on higher incomes is going up to 8%, from 6%. This will increase sales tax collection by 33% this year.
The B40 will be paying for the corporate lunches are town, as the tax burden on the T20 is very minimal.
The finance minister is gambling the rise on online sales tax will not lead to any downturn within the industry.
The increase in sales tax is just financing the new subsidies that will be given out. So in effect, money will be taken out of one pocket and put back in another.
Under Madani tax has become more regressive than the year before.
Minister for the economy Rafizi Ramli sprung the last surprise recently when he said the government will explore all other approaches, before being open to reintroducing the Goods and Services Tax (GST). Rafizi has put the GST on the table plainly and clearly once again.
A budget by the elite for the elite
The poor will continue to pay for the lunches of the tycoons. The Madani government has only being paying lip service to prudent spending in a time Malaysia debt has been bloated from past governments.
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In seven decades, Pakistan had 23 prime ministers who did not complete their full term of five years or were assassinated before they did. The success of the incoming prime ministers was based on personally demonising the predecessor with the Anything But [insert the prime minister's name here], a childish but costly rallying call similar to ours at GE14.
For instance, in Iran, Egypt, and Libya, it was a pattern, a bipartisan impulse that viewed with suspicion everything the leaders did, however well-intentioned they were. Such an approach sets aside the core strategy of eradicating corruption and tends to be co-opted by the corrupters themselves, who usurp power.
We became a shade of Pakistan when PH took over with the 'Anything But Najib' rallying call. The former prime minister must be smiling when his cancelled but well-intentioned programs are being reinstated, white-facing the current administration, particularly the DAP.
Understandably, the party must be pulling teeth to reinstate the GST regime.
Peace!
We should pray instead for Anwar's massive spending! And may G*d save us from Anwar's genius!
Anwar has absolutely no experience in economics or finance or apples and oranges other than the short spell he had playing Three Amigos with Mahathir and Daim. That was when the trio lost our money big time stupidly gambling on tin on the commodities market.
But, take heart, there are Two Amigos now, Rafizi is the other wan, sometimes he's the funniest clown around to make sure we laugh heartily on the way to becoming a failed state, Alhamdullilah!