Friday, July 16, 2010

Price increase: Learning from Dollah Badawi's mistakes

Prices of fuel and sugar inch up as government cuts subsidies gradually. The price of Ron95 per litre will be 5 sen higher from today. Sugar will be 25 sen more expensive for every kg, so new price is RM1.90/kg. These are still heavily subsidized, though. Even after the increase, the Government would still be spending some RM7.82 billion on fuel and sugar subsidies this year!

This means that the Najib administration has opted to increase prices - and cut subsidies - gradually. (At one of his subsidy briefings I attended, Idris Jala asked if we'd rather the government cut all the subsidies immediately or gradually over 3-5 years; only ONE participant said the government should cut all subsidies at one go). Does that make any difference or make the price increase less painful?  Certainly.

Remember when Abdullah Ahmad Badawi pushed up diesel prices by 63% and petrol prices by 41%? That was cruel. And the time when, announcing the 60% toll rate increase for LDP, Samy Vellu said the government had made sure the hike was "not too high"? Najib Razak has obviously learnt what NOT to do from his inconsiderate predecessor.

Still, nobody is going to be happy with Najib today and in the days, weeks and months to come. We can be thankful that he didn't push up the prices by 60-70 sen at one go but what he'd need to do is tell us, every step of the way, what the government is doing with the RM750 million in savings derived from this first part of the government's subsidy  rationalization exercise.


  1. Anonymous10:08 am

    Ketua Pemuda Umno Khairy Jamaluddin menegaskan beliau TIDAK KISAH dengan matlamat Perkasa yang mahu MEMBANTU orang Melayu, tetapi tidak setuju dengan cara ketua mereka Datuk Ibrahim Ali memperjuangkan dasarnya.


    KJ pi JILAT bureq cina yg busokkk lah

  2. Dato'

    I have to agree with the government decision to cut subsidies.. and agree also with u on what the gov is doing with the extra millions from the cut.

  3. Anonymous10:58 am

    Dato Rocky,

    RM750m savings?

    Oh no,1Malaysia kena tighten our belts and MCA nak tibai semua RM750M nih pi kat SJKC?


  4. Anonymous10:59 am

    Dato' Rocky,

    Pakatan Rakyat arm chair economists and UMNO/MCA/MIC carpet begging economists can go and fly kites. Give Najib a chance to start the pilling work for the New Economic Model. My young kids need to prosper in future and I do not want them to live in Third World Malaysia.

    Prof Awe Kecik

  5. Anonymous11:00 am

    Beberapa laporan media tempatan menyatakan bahawa setelah perkiraan semula dilakukan oleh ahli Falaq, mereka memutuskan bahawa arah yang selama ini diyakini itu salah kerana ia mengadap ke Afrika, ke arah Somalia, Kenya dan Tanzania.

    "Indonesia itu letaknya tidak di timur Kaabah tapi agak ke selatan, jadi arah kiblat kita juga tidak barat tapi agak miring iaitu arah barat laut,” kata Ketua MUI Ma”ruf Amin yang dipetik oleh agensi berita Antara.

    Gelak babi hehehehkekekewaakkakakak

  6. On my personal opinion, 5 cent increase on petrol was not that much of a burden as long it does not exceed RM 2/liter rather than the Pak Lah era which really leave a major impact on the consumer.

  7. Anonymous11:10 am

    Thanks to bloggers like you , Gomen is FORCED to be more prihatin.
    Yes, I support the GRADUAL increase in price (and decrease in subsidy) but at what expense >>>> RM4 billions annual budget for PM Dept.

    The Gomen does not need overly paid Jokers to do that, Lab here, Lab there, Consultant here and there.

    If the Gomen is serious, sack Idris Jala first... he has done enough damages and wastages in MAS... and put Tan Sri Aziz as MAS Chairman to replace Champagne drinking Munir Majid.

    Even JAL has replaced previous MD with a 75 years old veteran and Tan Sri is as brainy and brawny as ever.

    Little Bird

    P.s: Tap into Tan sri's brain below

  8. The PM could have saved more by cutting back on unnecessary spending like the new Palace, submarine purchase and curb on corruption. Of course it will mean certain people will have to forgo their hefty commissions.

  9. Anonymous11:58 am

    Annual subsidies of over RM 70 b is a life support for Malaysians inorder to continue breathing and maintain life.
    We are all suffering from vital organs failures. Once the life support is removed, death will inevitably steps in. Slowly but surely. We have to deal with scores of problems.
    Not sure to thank the Govt. or not
    for the good many years of subsidies we have enjoyed or blame
    ourselves for our ignorence on fiscality.
    There is no magic that can save us. Are we ready for a drastic and unprecedented change?.
    Pls dont perceive that I want you to join me in supporting BN. But I believe BN can handdle the subsidies issue better. You mandate them with power and they,ll find ways to provide you with subsidies. But check on them regularly about corruptions.
    As for PKR they,ll need long long time to settle. They are too busy about how to grab and devide the ill-gotten gains...sand issue for instance very very wolfish.

  10. Anonymous11:58 am

    Asmkum Dato

    Siapa Penasihat A-Z Pak Lah. Saya malas nak kata apa-apa ..hari ini hari Jumaat.


    Melayu manyak pandai...

  11. Bro subsidy cuts are inevitable and Najib have made it acceptable by cutting incrementally unlike Dollah who wanted to show he is the most popular PM of all time. Bad judgement, bad mistake..BN suffered excruciating pain in the last GE.

    With subsidy cuts Najib is taking political risks but he must not compound the risks by spending on wasteful projects benefiting the few left over parasites and cronies and allowing GLCs to lose billions year after year etc.

    The nation's eye is firmly on what the Najib Gomen does from now on.

  12. skilgannon106612:21 pm

    Only 3 sectors should be subsidised in Malaysia,i.e.

    - education
    - healthcare (govt clinics and hospitals only)
    - public transport infrastructure

    Everything else should be based on market rates.

    How difficult a concept is that to grasp?

    If PM Najib doesn't reform and restructure the Malaysian economy, the outside world won't stop the race for him.

    Like the Gamuda/MMC proposal for a RM36 billion MRT system in KL. Abolish fuel subsidies in totality, and in 3 years, the money saved could fund the KL MRT system without any need fodr dodgy financing (such as govt-backed corporate bonds?).

  13. The petrol increases are bearble.

    But what Najib really needs to explain and communicate is why the PM's Dept staffing has increased by over 100% to 43,000 and expenditure to $4billion per year. Why is AAB being provided an office in Putrajaya for? Where's the performance and benefit to the nation?

    The feeling the Rakyat now gets is that the PM, cronies and elite in Govt are partying and living it up while the Rakayat is being asked to tighten up their belts.

    It does not help UMNO/BN one bit for Najib to say Rosmah's USA & Australia expenses "are included in my claims." We want facts and we want details. That's what accountability and transparency means. Paying lip service to it is an insult to the Txapayesr!!

    we are all of 1 race, the Human Race

  14. Anonymous1:27 pm

    Yeah... While govt. wasting more than RM100 Million on the new Istana Negara that's accessible only to a few elitist, the ordinary layman was pushed against the wall with this new price increases! And this is the kind of govt. that shouted Rakyat di utamakan? What a crock!

  15. Anonymous1:32 pm

    [Tell us, every step of the way, what the government is doing with the RM750 million in savings derived from this first part of the government's subsidy rationalization exercise]

    Wow, what a request?

    By the same token, you should also ask the DPM why he gave an intelligent reply in Parliament like what was reported in Utusan Malaysia today (16 July 2010).

    The report is here at

    He forgets that in West Malaysia, Malays and Indians are also studying in SRJK Cina and also Malays/Orand Aslis studying in SRJK Tamil.

    He also has not gone beyond the shores of West Malaysia to know how East Malaysian SRJKs function for the bumiputras there.

    The DPM shows scant respect for the other races who are also Malaysian citizens and at the same time he is not respecting the decision of Malays who send their children to SRJK institutions.

    So much for 1Malaysia from the DPM.
    And he is a leader in UMNO?

    Shame lah.

    Why not this fellow tell everyone about his true feelings and his preferences?


  16. Anonymous1:32 pm

    There should be a system whereby BMWs and Mercs and extravagant MPVs and 4 wheel-drives do NOT enjoy the subsidy . They can well afford it. Let not the modest life style of mere mortals be stifled....


  17. Anonymous1:34 pm

    Ta'kisah lah GULA nak naik "The sky the limit,,,minyak,,gas,,,nak terbakar ke,,,tak kisah lah,,,,,COZ KITA YANG LANTIK PEMERINTAH,,,!!!!

    KITA lihat saja the CHAIN REACTION akibat kenaikan tersebut,,!!!!

    WHATEVER kerajaan buat adalah BETUL,,,biarkan lah,,,,TAK KAN KERAJAN BODO yek!!!!!!

    BIAR lah rkyat menderita asalkan KERAJAAN bangga dengan KEPUTUSAN yang di BUAT.

    GAJI kat takok tu jugak,,!!!


  18. Anonymous1:45 pm

    What the fcuk, still have to subsidizing RM7.82 billion some more?

    Sure or not?

    Or they are subsidizing their own pockets?

  19. Anonymous1:53 pm

    Make comparison with Bodoh?

    What is the price of oil during Bodoh & what is the price of oil now?

    So, Mr Losmah has squandered all the Petronas RM30 billions already ke?

    Stop defending the fat boy la! Damn blardy pathetic

  20. since the differences between diesel and petrol is only 10 cents... to be fair... the government should reduce the differences between petrol and diesel engine vehicle road tax too...

  21. Anonymous2:53 pm

    Duit IPP untung banyak beri pada Genting/YTL etc

  22. gua tak ada hal...jgn pulak beli lagi kapal selam beb!

  23. Stupid move!Why burden the poors when the government can easily save more than the expecteed savings by cutting down extravagant expenditures
    ( purchasing expensive military hardwares for example )and plugging leakages and reducing corruption,especially, via the IPP!
    Stupid because the dissatisfaction
    will translate into votes against the government!

  24. Anonymous3:45 pm

    alamak.. raya is nearby ni bro.. sure all the kuih raya naik harga.. hmmm

  25. Anonymous3:59 pm

    same mistake, never learn, hope somebody die for by erection.

  26. Anonymous4:03 pm

    750 million against 4!

    The Najib administration revealed today that it had allocated a whopping RM3.956 billion this year to finance operations in the Prime Minister’s Department.


  27. What's our annual inflation rate? What's our wage inflation?

    How much shocks can one afford in a year?

    The principle is if it is externally caused and a schock to the system we just have to take it. Otherwise, if due to known factors like planned decrease in subsidy rates, then it should spread out over the very long term, say 10-20 years, so as not to cause pain.

    But here we seem to be getting these price increases on all fronts practically every other month. Isn't that as much a schock if not bigger than Badawi's?

    If we are wise we should be having very long term planning horizon and announcing these cutbacks in subsidy well ahead of the Budget in Oct and implement next year so we can budget accordingly.

    Here there seems to a total chaos.

    What was planned and what wasn't planned?

    How do I run my life like this, if the Devil is in charge?

    We had only one shock to our economic system in all of Dr Mahathir's two decades, and that due to a traitor in our midst.

    What bloody excuse do we have now? Need to subsidise the largest contingent of ministers in the world who are there for their horse trading skills?

  28. i know,,, at Jalan Duta edi

  29. Samad4:33 pm

    Spot on, Dtk Rock! subsidy, at some point in time, must go away. Yep! Government must explain how are they going to spend the additional saving on the subsidy. Hopefully, lesser infra jobs, but more on social wellbeing - education, welfare etc.

  30. Anonymous4:49 pm

    bro, some stupid newspapers continue to gloat that the new prices are 'still among the lowest in the region'.
    people are generally tired with this kind of numbskull justifications bro. its not so much abt the price increase, but more about how we communicate.
    ada yang banggang tak sudah sudah, tolong la bro.


  31. Anonymous5:01 pm

    I fully agreed with the increased. But Anwar the moron say otherwise. Have he forgot that in the 97 financial crisis he are the one who let the interest rate increased extorbitantly.
    The opposition is just opposed for political purposes nothing else.
    That's the problems with people who fuck to much ass holes.

    We still pay the cheapest petrol la bro.

  32. Anonymous5:01 pm

    So with the price increases and cutting subsidies this countrly will go bankrupt later than 2019 ..good for Najib.

    TNB announced big profit for shareholders..good for them. Now more money for shareholders ..more stock options for directors. I suppose this is how clever people manage the economy. Get money from fishermen and other kais pagi makan pagi people by increasing domestic rates and put them into shareholders pocket..nice.

    Goven does not want to pay for anything anymore. I wonder what they are for..going round the country showing forefinger and saying 'satu Malaysia '.Now they are going for the poor with increases in the price of staples..while letting the politically priveleged steal . When it comes to Port Klang..senyap je.

    One malaysia ( middle finger because index finger used for something else ..)

  33. Anonymous5:25 pm

    wow... idop najib, idop potong subsidi, ekksss... gaji tak naik eh... camne nak sokong subsidi potong banyak2... takpe.. kita pakat makan batu dan pasir... ehhh pasir mahal.. kita makan tanah ramai2 ye rocky... idoop rocky...

  34. awhile ago we were told the country is going bankrupt

    then while ago we were told that's not true. the country is all OK

    then all along we got to know that the governemnt is bailing out more stalled projects and taking up debts

    then now the gov increase the prices for some essential goods

    and should we not ask what the F is this government doing???

    or should we just be thankful to the government for not stabing at our heart...
    and forget about all the past stillborn white elephant projects.

    ohhhhh ... i can feel something great is coming out of BN ...

  35. Anonymous6:03 pm

    why dont the govt always think to cut the subsidy? why never think of cutting the tax?

  36. Anonymous6:58 pm

    minyak dah naik 5 sen oklah tapi gula dinaikan 25en aper criter???.. dah lah nak dekat raya.. kuih nak buat.. timing bro timing tak kena... masa Tun M dulu aku tak pernah susah hati sampai mcmni sekali.. aduh wahai pemimpin apalagi lepas ni??


  37. Anonymous7:18 pm

    Part 1

    It’s the economy stupid! That famous campaign refrain by Bill Clinton keeps revebrating in my ears as I hit this keyboard. Of course, any self respecting government’s reputation hinges on economics, civil liberties be damned for they don’t put food on the table nor manna in the pocket. Najib has gingerly started the ball rolling and kudos to him for that. But there is a long way to go and the road ahead is riddled with growth speed bumps and inflationary/deflationary potholes, Slashing the subsidy on sugar was the right start though fuel pump prices should have been tagged onto the market price and oil companies be afforded the opportunity to provide discounts etc. I don’t agree that the 750million gained be spend elsewhere to set us back to square one. Rather, we should consider it as downsizing and cutting the cloth to our fit. If it is to be spent at all, then I suggest improvements in rural and small town infrastructure be given priority so that the indigenous communities gain at the expense of the ingrate pendatang. While the Q1 was blazing hot, things have cooled somewhat for Q2. The second half of 2010 appears to be the big unknown but given the slowing recovery in the US, China’s lurch towards a slowdown and the smoldering embers in Europe, one cannot be too optimistic of the reemergence of long-term stable growth. Fancy economic modeling and prognostications aside, it should be clear that the current resurgence is due primarily to Keynesian public stimulus measures. Very soon the tap will run dry and then we will see whether real growth propelled by private investment/consumption is possible. My hunch is that this is just a temp. revival fueled by fiscal steroids with the occasional stellar aberrations. Here is why from my perspective. Globally, bank lending has shriveled which gives credence to my pal, Kobayashi’s contention that damaged bank balance sheets and the glut of toxic assets accumulated on their books will hamstrung future lending hence crippling capex and other forms of investment thus short-circuiting economic growth over the foreseeable future. Moreover, the collapse of the property mart in the US and asset value diminution means the party's over for good there. Data on bank lending here, here and here attest to that while a slowdown here is not good for those recently besotted by slit eyes and unwashed arses. This is in my estimation the global “lost decade” ala Japan of 1990 onwards. Closer to home, Fitch has retained Malaysia’s credit rating at A- but forecast our debt to GDP to rise to 54% (same as Spain’s) significantly above the ‘A’ median’s 40%. The plus side is that the bulk of government bonds is held locally but the fact that we have allowed the deficit to spiral on the back of diminishing petroleum revenue is indicative that we are heading for trouble if we don’t rein in our spending as I foresee the oil mart going to a funk due to lethargic global growth rates.

    Warrior 231

  38. Anonymous7:21 pm

    Part 2
    The doubling of oil as our main revenue stream is an indictment of the failure of the fuckhead Dollah to advance us to the next level by leveraging on the platform laid astutely by Tun Dr M. Who knows the gov may be planning on monetizing the debt if its blasé spending approach is an indicator but I would rather caution against that for we will invite inflation apart from bastardizing the currency. Granted rating agencies have been grossly inaccurate before, the fact remains that the lack of solid institutional (the leadership component) resolve means that we are fast frittering away the halcyon days of the current lull. Our Current Account Surplus is indicative of the lack of domestic investment due in part to lower private consumption, a scenario fast approaching that dog-chasing tail vicious pattern of no investment due to lack of demand and low demand due to job uncertainty. Awash with savings but with no incentive to invest seems to be our raison d’etre nowadays. So how do we stimulate a copious orgasm of pent-up consumption from a frigid consumer. By titillating the expenditure g-spot via fiscal tonguing of course as any self respecting expert cunnilinguist would readily aver. In this regard, I call for the crimping of corporate and individual taxes, the disincentivization of savings via a lower interest rate regime, the lowering of tariffs on goods, the adoption of a flexible yet liberal National Automative Policy, the acceleration of affordable Public Housing Schemes, the reimposition of exit tax on wealth being sequestered out of this country. Apart from this, announcing the actual implementation of the GST to activate a surge in current spending and a salary revision for the public sector would put money in hands to spend. I have long argued that revenue generation can be enhanced via the GST (with a comprehensive offset package), the imposition of a wealth/financial tax. I have also pragmatically called for the legalization of all forms of gambling, a religio/cultural demand on non-Muslims, which will accrue added revenue via gaming taxes (to be used strictly for infra projects only via a special account); the provision of selective subsidies and incentives etc for targeted exporters, incentive provision for entrepreneurs in pioneering fields of green tech, halal food and cosmetic production, pharmaceutical products, more focus on developing gas and oil hubs etc etc.

    Warrior 231

  39. Anonymous7:22 pm

    Part 3

    I have called for savings through the selective removal of subsidies on all goods excepting the staples (today’s move is in the right direction), the culling of excessive public spending through refined and transparent procurement and tendering frameworks, the jettisoning of wasteful expenditure on projects like SUKMA, reduction in defense outlays and the abolition of the NS by making it compulsory for all able-bodied males to enlist for mandatory reserve army training and ignoring irrational demands from filthy rich minority bastard suckers. Imagine 1B extra for vernacular ghettoes that is gonna cleave national unity asunder and add unnecessary expenditure to the Unity remedial efforts (and while at it, deny them anymore election goodies, give them to the pribumis who will help you to win big1) I add to all that by proposing that departments raise funds through optimisation of available resources like halls, meeting rooms, sports facilities as well as through the exploitation of staff expertise etc. I further advocate the freezing of staff intake, the streamlining of overlapping tasks, the reduction of the bureaucracy via corporatization and normal attrition, the utilization of technology and a review of current perks for senior executives and a productivity based reward/remuneration system. Monetarily, a low interest rate regime helps to spur domestic borrowing and consumption while penalizing savings but Bank Negara inexplicably (citing nascent inflation which is gonna be a temp tame affair compared to incipient deflation) against better judgment has decided to up the rate just as the recovery fades. Last year I called for a BLR of 1.25% to give us room to manouvre should the rebound take place. But we kept it 2% and now we are stuck in no-man’s land after upping it twice
    So there you have it. A few suggestions on things we can do to fortify our economy to withstand the next big wave. Whichever way, we cut it, one thing is certain, the days of deficit spending are numbered with the failure of Obamanomics and the sea of red ink failing to drown unemployment, create confidence but rather allowing the big fish within it to grow bigger. Beware, the backlash has already begun.

    Warrior 231

  40. Pantat Ang7:32 pm

    Govt saves RM800 million. Nobody is complaining. Well and good. But Gov allocates RM4 billion for the PM's department. Rocky, pse address this issue instead of fudging it like the top spinmaster you are. RM4 billion is a big amount. For what? To lick the bottoms of top civil servants? Answer me.

  41. Clear Cup7:37 pm

    Nobody wants this price increase.

    But the way it's being done is definitely better than Dollah's. What the sleepy old man did was irreversible and I curse him whenever I can.

    Do I like the current government? No.

    But will Pakatan be better?
    Freaking no.

  42. Anonymous7:43 pm

    sorry for inadvertently leaving out some links "upstairs"

    Warrior 231

  43. Anonymous8:30 pm

    Not bad, you help Najib to find a Bugiiman.

  44. Anonymous8:51 pm

    RM 750 juta saving? Baguslah tu, Sime darby rugi RM 864 juta, duit siapa tu? Orang-orang dekat Sime itu bikin business bukan duit dia orang, mana dia orang kisah. Warga Sime juga jadi mangsa, satu tahun kuat-kuat kerja, bonus macam tahi lalat. Bos gaji besar kereta mewah main golf saja, mana ada kerja? Company rugi besar pun tidak perasan, mangkok betul.Ex-CEO GH kena singkir daripada Sime darby sekarang jadi bos dekat FELDA, GLC kononnya.


  45. Anonymous9:47 am

    Dato' Bru, obviously u are anti Pak Lah but Najib ass licking. Bias

  46. Anonymous7:07 pm

    Baru kawin manis, akhir kawin kencing manis. Elok kurangkan gula, tak rugi apa pon.

  47. Anonymous3:22 pm


    Gue masuk PEMANDU punya lab...itu coordinator dan gengnya akan bawa Msia dalam telaga buta... Biarkan.

    Kenapa....semua buat suggestion atau resolution without addressing the underlying root cause...

    Keturunan Jebat

  48. 1Malaysia-sia8:28 am

    As usual, taking the easy way out by rationalising subsidies ONLY, but totally uninterested in rationalising corruption.

  49. skilgannon10663:01 pm

    Warrior xxx

    I couldn't resist pointing out that Singapore's credit rating is triple-A, i.e. AAA.

    Not bad for a city-state of less than 5 million population! That has a corporate tax rate of 17 per cent and a top personal income tax rate of 20 per cent.

    Apart from the above, I would tend to agree with most of your economic prescriptions, after discounting the racist garbage, which is par for the course.

    Can I also suggest that we take an axe to the civil service and the bureaucracy? Why do we need so many civil servants anyway, when the wonders of IT and broadband Internet access have increased productivity exponentially? The savings in manpower costs would be considerable!

  50. skilgannon10664:18 pm


    Subsidies currently amount to about RM74 billion annually. Of which:

    Health care and education subsidies: RM43 billion
    Subsidies on tolls, fuel, gas, power and food: RM30 billion

    Fical deficit stood at 7.6 per cent of GDP last year

    (figures as published in the Spore Business Times, July 19, 2010)

    It doesn't take a rocket scientist, at least one of Warrior xxx's acumen, to see what's wrong with this situation.

    Where is the ongoing emphasis on reform and restructuring the Malaysian economy and increasing productivity?

    Or what about wastage in the public sector, the inefficient use of funds, corruption and "leakages"?

    Examples quoted by the Biz Times:

    - the Ipoh-Rawang double track railway which incurred a cost overrun of over RM1 billion
    - the PKFZ project where billions of ringgit have been paid in excess of original estimates
    - the new palace in KL which is now estimated to cost RM800 million or twice the initial estimate

    Or the fact that the PM's Department employed about 43,500 civil servants with an expenses budget allocation of RM4 billion (when in 2003, only about 21,000 were employed by the same department). Whither productivity in the government?

    The rakyat can't help feeling cheesed off as they would reasonably expect the government "to show financial discipline in the use of public monies before expecting Malaysians to make sacrifices".

    After all, not everyone can go overseas to work, be paid in Aussie dollars, Euros, US Dollars, Pounds or Singapore Dollars and make remittances back to their families in Malaysia a la the Filipinos, Indians, Sri Lankans, Bangladeshis, Indonesians, Latinos, Turks, Africans and Mainland Chinese.