Go for results-driven culture

I AM neither an expert nor schooled in economics and I am not an eminent person. I am just a plain Malaysian who, like most Malaysians, have contributed to the wellbeing of our country and hope to continue to do so.

I have some suggestions for eliminating GST that would not affect revenue collection and would actually improve the health of our economy.

Let’s use Budget 2016 as it was a normal budget unlike Budget 2017 which was an election year budget.

Total budget allocation was RM267.2bil of which RM215.2bil (80.5%) was for operating expenditure (OPEX), leaving only RM52bil for development expenditure (19.5%).

For OPEX, RM70.5bil was for emoluments, RM36.3bil for supplies and services, RM106.6bil for fixed charges and grants, RM761mil for purchase of assets and RM1bil for other expenditures.

GST collection was RM39bil. Sales and Services Tax collection in 2014 was RM17bil. The shortfall is about RM22bil. This is the shortfall that needs to be bridged when GST is eliminated.

My proposal is to immediately clamp the bloated, leakage-prone civil service budget. The goal for any organisation that is fat and lazy is to reduce expenditure by 30%. This is what corporations do when they need to introduce cost reductions.

For the Malaysian civil service, it is not cost reduction but waste reduction. Years of mismanagement, neglect, leakages and bloated sizes means the 30% reduction can easily be instituted and results can be seen within one quarter. So, reduce the operating expenditure of RM215.2bil by 30%. That’s RM64.56bil saved. Get all of those heading government departments to immediately cut their expenses by 30%. They can do this if they focused on work.

According to an article on Malaysian government debt in The Edge on Oct 19, 2016, “Government must manage its OPEX prudently. It is 95% of revenue. This is too high a level relative to many developing countries worldwide. Problem is, Malaysia is spending RM100 when it was earning RM90. This cannot be sustained. You do not need a Phd to know that.”

In the report “MACC keeping an eye on govt bodies for money leaks” (The Star, March 13), MACC deputy chief commissioner Datuk Seri Azam Baki was quoted saying that leakages in government bodies need to be plugged so that people can benefit fully from government funding. He said such losses are prevalent in ministries and government departments and that most cases involve wastages and discrepancies in procurement. He cited a case where a ministry lost 40% of its funds due to leakages.

There is no need to quote other examples on how badly managed our ministries and government departments are. Just make all of them work to achieve the 30% reduction goal. This exercise alone will bridge the GST shortfall.

Do not think it cannot be done. We do it all the time in the corporate world. There is no need to reduce head count or salaries. Just reduce wastage and leakages and instil good governance.

Reaganomics, the economic policies promoted by US President Ronald Reagan in the 1980s, is regarded as the greatest period of wealth creation in the history of the world. What did Reaganomics do to produce the 25-year boom from 1982 to 2007?

a) Reduction in government spending. The immediate target was 5%. Non-defence discretionary spending was also reduced by 14.4% (1981 to 1982) and a further 16.8% in 1983. Total government spending was reduced by 36.2%. My proposal is only a modest 30% reduction.

b) Restraining money supply growth through an anti-inflationary monetary policy.

c) Deregulation, which saved consumers an estimated US$100bil per year in lower prices. For Malaysians, the deregulation process can start immediately by abolishing approved permits (AP) for cars. In the National Automotive Policy (NAP) 2009, it is stated that open APs would be terminated by Dec 31, 2015 and franchise APs by Dec 31, 2020. What’s the problem in terminating it now?

Quoting Raja Petra Kamarudin, who became the favoured blogger of the past regime, “AP results in car prices higher than 20% and car owners end up subsidising the AP holders. In other words, we consumers are paying for the AP and those getting filthy rich are not just AP holders but certain leaders very high up in Umno.”

APs are not only jacking up car prices but there are all kinds of APs as well, from steel to even Mandarin oranges. Get rid of the AP policy now.

Why are medicines, vitamins and supplements and chronic illness medicines 30% to 40% cheaper in Australia (after currency conversion) than in Malaysia?

Why are Malaysians also paying for the seals on the medicine packages? Someone is making money printing seals on our ubat. Do you know Malaysia is the only country with this regulation? Even advanced countries like the US and Britain do not practise it.

The Team of Eminent Persons (TEP) should get rid of this policy today. Many regulations have been introduced that increase costs and make cronies rich at the expense of the rakyat. Identify all and get rid of them.

d) Cut tax rates to restore incentives for economic growth. Eliminating GST would do this. We certainly appreciate the government appointing the TEP to look at eliminating GST (for which action has been taken) and ways of improving our standard of living.

Make the civil service and politicians accountable and responsible for waste reduction, improvement in productivity, leakages and corruption and get them to work like they should.

It is a joke when the chief secretary to the government says a doctor was transferred because he was absent from work for over 1,000 days. Is this the best the government can do – transfer civil servants? Where is the accountability?

TEP also needs to ensure that the best of the best are leading the country and that accountability and a results-driven culture is the only way forward.