Saturday, June 14, 2008


KL policies now even more confusing : Harris
Former CM urges Govt to introduce weekly salary payment


The various financial and economic policies announced by the Government are now even more confusing not only to the general public but more so to those who are affected by them and involved in implementing these policies, said Datuk Harris Mohd Salleh. Harris said the latest move by the Federal and State Governments to cut perks of Ministers and others shows that the Malaysian Government is trying to link this move with the outward trend of prices and is beginning to face up to the fact that the financial crisis is now a reality. According to the former Chief Minister, the actual source of the crisis is the unstoppable upward trend of international market prices - such as oil, rice and others. The cuts made from the entertainment allowances of Ministers and others will not contribute to saving even five percent of the total amount of this year’s subsidies which reportedly surpass RM60 billion. Also the adjustments of subsidies on diesel and other commodities and the payments of cash rebates to eligible motorists are both confusing and do not make sense. it is maintained that the Malaysian Government when and if it is not facing a financial crisis, is susceptible to a sabotage of funds and as such the cuts on Ministers’ entertainment allowances are merely a drop in the ocean. What is important is that the Government must follow and keep pace with the changing global economic situations and price adjustments. It is wrong to subsidise. Let the changes in the global prices take their course. However, in order to lessen their impact, this means that the Malaysian Government should abolish all subsidies and school and medical fees and in return introduce a ‘hardship allowance’ for every Malaysian over the age of 21 years. The abolition of subsidies will make Malaysians more responsible and thrifty on their spending habits. At the same time this also will encourage them to engage in economic activities which will make them more self sufficient, especially on rice, vegetables and fish. Presently most Malaysians are spending lavishly and beyond their means. Almost every Malaysian earning more than RM2,000 a month has two cars and the low interest rate for car loans at 2.9 percent is only encouraging this trend. On the other hand loans charged for agricultural activities such as for planting rice cost at least six percent. Where then is the logic? Actually almost every Malaysian has already, started to be frugal on his spending after the imposition of substantial increases on diesel and petrol prices. Comments made by those interviewed on TV and print media demonstrate clearly that with the higher fuel prices most Malaysians can only afford to visit their kampongs once a month instead of every week. The much touted promises ofhelping the rural people and the rural economy which have been going on since Merdeka, are only talk. With the exception of the settlement schemes introduced by the late Tun Abdul Razak Hussein, there is very little progress economically in the rural areas. The FELDA schemes introduced by Tun Razak are a full-fledged model of rural development - where every settler is given 10 acres fully planted either with rubber or oil palm and a small plot for a house. After completion, the lot is handed over to the settlers. Under these schemes, the settlers can look after the fully planted 10 acres and at the same time are able to repay the loan (development costs). Then again so much has been talked about the four million hectares of land which have been alienated and left abandoned. A full and realistic development of such land can only take off if the rural people are guaranteed of their source of daily live without food and sustenance. Therefore, regardless of whatever argument the Government may want to put forth, it is very important that for a start the Government pays a hardship allowance of RM300 to every Malaysian. This will not only contribute towards a distribution of wealth and a wider generation of cash flow, but will also spearhead the development of rural areas. The rural people will then have the incentive to not continue buying rice at RM4 per kilo, but instead to plant rice for their own consumption. Mere cuts of Ministers’ perks and also of others will not help to lessen the painful effects of the cuts in the subsidies nor contribute significantly to savings. Instead, it will only encourage those affected to look for other sources of income to maintain the high standard of living that they have been used to. The Government should after all have plenty of excess funds considering that prices of oil have gone up four times and the prices of commodities sucli as rubber and palm oil have doubled. Another pertinent and necessary factor to be considered is the cancellation of negotiated contracts for projects that are not the top priorities and are indeed not even needed by some States. On the payments of salaries twice a month, Harris said it is good news, but the Government should also consider introducing a weekly payment such as is practised in developed countries like UK, Australia and USA. This is more appropriate now as almost every average income earner does his grocery and other kinds of shopping at supermarkets - which require cash payments — instead of at the ‘kedai runcit’ - which give credit via records in the ‘555’ book. ‘I’1s twice monthly or weekly salaries system will still be of great help to low- income customers who can continue to do their purchases from the ‘kedai runcit’ which dominate in the rural areas, he said.