Tuesday, 27 October 2009
I must admit having to do a double take on my views of Malaysian Premier Najib Tun Razak.
The recently unveiled Budget 2010 is a stroke of brilliance on his (and his team’s part) especially in managing the push-pull factor that is inevitable in ensuring the country has enough in its coffers and at the same time score the all important political brownie points with the Rakyat.
Witness the tax on credit cards.
In one stroke, Najib managed to push the message across that the government cares on the proliferation of credit cards and its burgeoning debt levels and at the same time, get back some of the excess profiteering from the card issuers.
Expect a majority of credit card issuers to offer their clients absorption of this tax .
After all, it is they who would lose out if all of us were to cut our cards ownership to a measly one card per person.
To the credit card issuers, the tax imposed is chicken feed easily recouped from the interest on outstandings without batting an eyelash.
When the budget came out, I thought - probably like everyone else – Najib was doing the usual sleight of hand's trick of feeding with the right and taking with the left with all the so-called goodies.
There were the increase in personal as well as EPF and insurance relief, the broadband subscription allowance, the 1% income tax reduction for those earning more than RM100k annually...
Against these were the aforementioned credit card tax, the Real Property Capital Gain Tax imposition and news of an impending cut in fuel subsidies.
Can I say Quid Pro Quo?
Anyway, the latter and the National Automotive Policy would be the most important thing to look out for next.
Dare I make predictions?
Here goes anyway: Fuel subsidies will be no more for everyone at large, and accorded only to the following sectors/segments; public transportation, charitable bodies and senior citizens.
The rest of the population – including the poor and hard core poor – will pay the market rate; thank you very much.
NAP is a much tougher cookie to predict, says this armchair critic/analyst ordinaire.
Unfortunately the country’s far-too-long high excise duty scenario precludes any drastic withdrawal which would have the effect of crippling the second hand car industry as well as the original national car maker, Proton.
Is a consolidation in the offing?
Looks pretty likely, as the advantage is plenty for a single conglomerate as opposed to several (just how many so-called National Car Manufacturers do we have currently?) especially in terms of economies of scale.
Can it be done though?
Heck do I know, but the current scenario in so many pseudo national cars running around is laughable when everyone knows these are rebadged versions.
The benefits for us would be in the medium to long term via the weaning in government subsidies to the National (too big to be allowed to fail) Car Maker – whatever name it would assume.
Back to Budget 2010.
I do wish there were some kind of tax on the foreign-laborer intensive industries/sectors though I suppose such an imposition would rake back whatever gains in growth so sorely needed in these tough conditions.
Next Budget, maybe?
PS: Off the topic, I wonder if there is a Quid Pro Quo somewhere in the recent Ong and Chua peace handshake.
A Quid for anyone's thoughts?