Tuesday, May 24, 2011

Subsidy for the lower income

UPDATED, 1pm, Wed: A briefing for editors, scheduled for lunch today to explain the subsidies, has been called off. No announcement today? We can hope...

Original article:
Tomorrow, the Government is expected to announce some so-called rationalization measures which basically means reducing subsidies and passing the burden to consumers. The task of trying to explain this very simple concept falls on Nor Mohamad Yakcop. But no matter how well this seasoned campaigner performs this task tomorrow, there will be complaints. Unhappiness. Perhaps even anger.

Yes, we all accept that we are living on subsidies. Handouts. Tongkats. And we are all ashamed of this fact. Still, why cut subsidies now, right? More and more people are asking that question. Even those in the government. It is election year, ehat? Cut subsidies when the government has succeeded in cutting its own inefficient spending, etc etc. blah blah.

Anything to continue getting subsidized.

I agree that subsidies must be reduced and eventually we must do without them if we are to become that high-income, developed nation.

But we are not there yet. Najib Razak's own New Economic Model, which he introduced at the start if his premiership, admits that there are still too many in the lower income group.

Forty percent of wage earners in the urban areas are in this category. They still need help. A tongkat. Some handouts now and then would help.

So tomorrow, the only way the Government's subsidies rationalization measures are going to work well is if they take into consideration the bottom 40 per cent.
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  1. Anonymous11:19 pm

    Uncle Bru,

    You can live without subsidies. You are well-off and you are also supported by those "hand-outs".


  2. Really2 hope Najib doesn't go "Badawi" tomorrow...

  3. Anonymous7:35 am

    Sabotage work at hand? Certain quaters as appointed economic advisers giving misleading advice to the govt perhaps? For yada-yada reasons? Especially close the PRU, some individuals started it already with a certain religion issue by getting the Muslim Malays riled up and making unnecessary actions and comments to the benefit of certain parties?

    Well... just watch your back Najib, use your best judgements on issues especially effecting the rakyat. And especially close to the PRU... if any soon. You goy my suppot and millions of REAL Malaysians.


  4. Anonymous8:33 am

    It will be difficult to take candies from the baby.


  5. Anonymous9:17 am

    Cool! When the govt stops paying, people will stop voting. Then we got better chance of getting a new pm ....let's welcome Anwar Ibrahim, savior of the nation, defender of the poor, the equalizer. Long Live Anwar Ibrahim.

  6. Anonymous1:28 pm

    today is International Missing Children's Day. 25 march.

  7. Anonymous2:28 pm

    Rationalisation ? You mean the government coffers have dried up, after 3 decades of theft by BN. Kalau duit takde, cakap lah....we can get China to buy out the debts of Bolehland. Then UMNO will know who is the Tuan lah.


  8. Anonymous2:31 pm

    Like I said in a previous post - UMNO will steal until there is nothing left to steal. Then it puts up its hands and say "sorry folks, gomen dah bankrap, we can't afford the subsidies anymore".

    Breakfast makan goreng pisang, lunch makan goreng pisang, dinner makan goreng pisang.


  9. Anonymous3:13 pm

    I am interested to know more about this stuff. Btw, this merely an idea, or CONFIRMED?

  10. kirana3:44 pm

    tak jadi announce.


    memang it will cost the BN govt the winning votes.

  11. Ayah Man4:57 pm

    Subsidies given in truth, are in exchange of high taxes imposed by the country to its people.
    You may take away the subsidies one by one. But the country must also ensure it takes measures to reduce the taxes that people have been made to pay.
    The country has to cut taxes on a lot of things to create a counter balance that deem fair and just to the people.
    Pls review taxes/charges on, automobiles, passport fees, levi on maids,assessment,tolls etc.
    Otherwise any insignificant increases render meaningless to the recipients.
    Unfortunately for some people who do not have any form of income no pension, no saving...its a slow death.

  12. Rahman5:24 pm

    KJ was the one that created the wave of cutting spending and restructuring of subsidies. Kudos to KJ, i know u hate him, but he is doing the job well.

  13. Anonymous5:31 pm

    The end of subsidies would be easier to swallow if it was not for the view that:

    (1) people find it hard to believe that the future will have opportunities for them to be able to increase their income to meet the expected increase in living costs. People are not looking for handouts, they are looking for opportunities to create their own wealth.

    (2) subsidies are retained for certain well-connected people and companies. A lot of complaints against the end of subsidies are directed against this percieved unfairness.

  14. Anonymous6:17 pm

    Duit sudah habis, tapi takut nanti kena tendang kat GE13. So try very hard to keep subsidies....so elections must be very near as you don't want an election when the country announces bankruptcy kan ?


  15. sam/PRAY, it works7:10 pm

    I agree that subsidies must be reduced and eventually we must do without them if we are to become that high-income, developed nation.

    High income, my foot. High income with high prices means stagnant,square one.

  16. Skilgannon10667:19 pm

    From 1957 till now is not enough time to throw off the shackles of colonialism, modernise the economy and get Malaysians to be trained for high-wage, high-skill jobs?

    Or were there too many wrong turns and wrong policies along the way?

    Look at what's happening to Greece, where it's bonds have been downgraded to just above "junk" status, and where Portugal, Ireland, Spain and, possibly, Italy could be caught in the same trap of downgrades, budget deficits and structural unemployment!

  17. Anonymous7:22 pm

    Cutting subsidy is the surefire way of losing the election (mabe worst than 2008).

    Dare to try Najib after all the 'hard work' to gain back rakyat trust ?

    Beware of those 'penasihat'...

  18. Anonymous7:30 pm

    take away the subsidies from ipp & past down the cost to the public will not be popular. Impose development levy on ipp & create a development fund for public consumption will be ideal in the spirit of one malaysia. - kgb

  19. Anonymous9:58 am

    Why cut subsidy now? Because Najib has handed over his portfolios to PEMANDU who are mainly business inclined people. They only see bottom line. Nothing else These people are not politician who should have craftsmanship in people needs and wants.

  20. Anonymous12:12 pm

    while searching for articles commenting on other viable solutions for subsidy-addicted msians, ive stumbled on this interesting blogpost. i honestly didnt know abt this secret 'malayan funds',,, worth a read bro!


  21. Anonymous2:29 pm

    Ya..bukan sahaja lower income sahaja... middle income juga perlu diambilkira. Kalau 10 - 20 years back, gaji RM5,000 sebulan... wow.. orang berada... sekarang RM5,000 dah jatuh jadi orang miskin.... apa yang boleh dibeli dengan duit tu... single storey link house sekarang dah cost 120k - 150K bukan dibandar...pinjaman 20 - 25 years RM1,000 permonth..EPF RM500... kereta proton RM600++ permonth...travelling exp RM500 p/mth, letrik...air...telefon indah water...cukai pintu.... purata RM250... Last time pergi pasar malam RM10 boleh beli macam2..Now atleast RM20 per pasar malam u will get the same barang. if u have 2 kids .. RM50 per pasar malam and so on.. Kalau nak kurangkan subsidi boleh.. kita mulakan dengan subsidi air dan letrik.Contoh, kawasan rumah orang kaya seperti rumah bernilai RM500,000 dan keatas, caj letrik dan air at market price. No subsidy at all.

  22. Anonymous2:38 pm

    Dear Rocky,

    We all know about the lower income wage earners need the subsidies to continue.

    How about the issue of subsidies given to the independent power producers (IPPS)?

    Please refer to the Business Times report:


    Just some highlights from the article:



    The IPPs are YTL Power Generation Sdn Bhd, Genting Sanyen Power Sdn Bhd, Segari Energy Ventures Sdn Bhd, Powertek Bhd and Port Dickson Power Sdn Bhd. They are controlled by some of the country’s richest families and individuals.


    Indeed, as the country faces economic slowdown and local consumers are burdened with significant rises in the cost of living, lucrative payments to the IPPs do not appear apt. Electricity is a necessity and thus, excessive profiteering from such essential should not continue.

    All other industry participants have played a role – Petronas via a gas subsidy, TNB via absorbing higher costs and customers through higher tariffs. The only one left is the IPPs, which continue to make huge profits even when the industry is facing problems due to the increasing costs of supply.The IPPs had made so much money by overcharging, and they should overcharge no longer for the sake of the rakyat.


    The Consumers Association of Penang recently noted that TNB’s total payout to IPPs amounted to RM78.3 billion from 2001 to 2010. Last year alone, it would have paid an estimated RM19 billion, or 65 per cent of its total revenue. TNB president and chief executive officer Datuk Seri Che Khaleb Mohamad Noh had once been quoted as saying that the renegotiation of the PPAs was one of the ways to reduce tariff charged on consumers.

    TNB, whether it likes it or not, must buy electricity from the IPPs even though the country has a 40 per cent spare capacity out of a total 19,000MW generating capacity.

    In effect, TNB – which needs a reserve of only 15-20 per cent – buys electricity it does not need. The IPPs thus win both ways, leaving TNB squeezed in the middle with extra costs eventually passed on to consumers. TNB is a vehicle to provide electricity to nearly 100 per cent of the peninsula, including rural areas and remote islands, and not entirely focusing on being profitable.



  23. Charles F Moreira5:01 pm

    I've noticed that prices have been rising. Even a small jar of locally produced peanut butter costs nearly RM10 today.

    Why subsidies the corporations, while make the working class pay.

    The main reason why I don’t like the Barisan Nasional is because it is a capitalist party, despite the populist policies it has adopted towards the rakyat, especially to the Bumiputras so far to win votes.

    Singapore’s PAP and Thaksin of Thailand are similarly populist too, which is why they retain support from amongst the rural folk and the urban working class, but not the middle class.

    However, now the BN is going to do a “Soeharto” and cut subsidies, and we know what happened to Soeharto, who was forced to cut subsidies under pressure from that imperialist institution, the IMF.

    While I don’t deny that the Pakatan Rakyat parties are pro-capitalist too, still they may be less so than the BN is being right now.

    Only under a socialist system, will we be free of capitalist economic forces which dictate such anti-people policies, and can have an economy where production is for social need, not private profit.

    Support Parti Sosialis Malaysia.

    BTW. The Argentinians did the British people a great dis-service by invading the Malvinas Islands.

    Thatcher’s was heading for an electoral defeat in the next elections but by re-capturing the Malvinas (which are Argentinian anyway), Thatcher’s popularity soared, which kept the Conservatives in power for 13 years, during which time she dismantled much of the welfare state and privatised many of Britain’s strategic industries.

    I was a student there in the 1970s and Britain was quite an affordable place to live in but after Thatcher, it’s become horrendously expensive.

    I’m totally anti Neo-liberal, which is what Thatcher, Reagan and the globalists are, and it seems that Najib is taking the neo-liberal route.

    If have no issues with subsidies to help the rakyat, provided they benefit ALL the rakyat, especially ALL the lower income rakyat, and not a particular ethnicity.

    So let’s seen how the BN does in the next elections, or perhaps Najib, et al will be booted by some other faction within UMNO, quite possibly a faction headed by a certain “M” and that “M” is not the head of MI5, as in James Bond films.

    So will it be R.A.H.M.A.N.M. or PAKATAN after the next elections, or perhaps even before.

  24. This is a great post, please continue the fine work with this blog!

  25. Anonymous8:17 pm

    Fuck them... I am always at loosing end. Why? The income that I earned is insufficient .. Really need to use credit cards so at the end of day our credit cards fill to the bream. Each year we need to pay our so called taxes.. They just dont take into account our daily expenses and liabilities that we are obligated to pay banks very high interest rate for cards or at times money lender... but we still have to pay income tax!!! And that is fucking hard .. Because in reality we are actually getting negative income. So I say fuck them up in election.

  26. Anonymous10:42 am

    Make our pay more competitive to compensate for the reduction in subsidies.

  27. Seolferwulf12:20 pm

    No problem-o, Grandpa Petronas will stump out 30%+ of govt revenues!

    Malaysians infatuation with subsidies - comparable to drug addicts' hankering for crack cocaine?

    And the govt hasn't done anything since 1957 to wean them off this febrile addiction.

    No matter how much they talk about caring for the rakyat!

  28. Anonymous3:51 pm

    Dear En. Rocky,

    I agree with you.

    We must be wean off subsidies if we want to be a high income nation.

    But what about our car? And housing? What about APs?

    Until they find a way to solve the car/house/AP issues , no point talking removing subsidies.

    Just my humble opinion.

    Mr. J

  29. snow white6:55 pm

    i think the rakyat should ask the jawatankuasa pemandu - what actually their roles in advising the cabinet? is it to achieve the ministers KPIs by saying the country will go bankrupt by 2019 if the government continues subsiding the rakyat. do they know that the rakyat is suffering with all sort of goods price increases?

  30. Anonymous2:22 am

    The subsidies being cut?..for what? 20 billion can be save and put into infrastructure projects for the benefit of rakyat...let me put it this way...10 billion on the projects n another 10 billion paid to consultants...at the moment the RM20 billion goes straight to all rakyat. We do need subsidies....kalau takdak subsidi buat apa jadik rakyat malaysia?....bukan ke wealth of Malaysia belongs to all Malaysian?

  31. Anonymous9:39 am

    Ask these utilities to take lower profits but reduce or maintain their tarriffs. It amazes me that we pay subsidies and yet some of them make record profits year on year.

  32. Anonymous7:14 pm


    Since 1957? For all we know your papa was still bowing to his Chairman, illiterate and tending to the pig farms, even if he could afford to buy, newspaper aloso not allowed to read ..

    Well for us who had been here during the British and Japanese colonial days, we sure see tremendous changes under all our Prime Ministers..

    Your history here started only in 1957 or? Before that stateless? fugitive? coolie or what?


  33. Skilgannon10669:23 am

    Anon 2:22 AM

    "We do need subsidies....."??????


    So that we can be shielded from economic realities?

    While the government pretends that semua ok and that it's smooth sailing to achieve developed nation status by 2020?

    Who is going to pay for it all (leaving aside Petronas)?

    Indonesia has subsidies, and yet it's government has a budget deficit this year of only 1.5% of GDP (which it is trying to bring down further to around 1%).

    Malaysia? Just RM20 billion on fuel subsidies alone this year!

    We gotta stop living in cloud cuckooland and get out of the mindset that the world owes us a living!

    What's wrong with cutting taxes and eliminating all subsidies (I'd like to see Malaysians pay the REAl costs for water and electricity, for starters)?

  34. Yes, cut subsidies to rakyat, so that subsidies from rakyat to GLCs & cronies, and hi levels of corruption can be maintained a la 1Malaysia style.

    Oh, kerana mu, umno!

  35. Anonymous11:08 pm

    it wont surprise us..those Yb's on BN bench gonna switch seats on d other sides (as Pembangkang)in da Dewan dis PRU13..worst still it wont b any BN reps around...we..da rakyat gonna gives a try on PR..hopefully worth a try..n it wont hurt as they promise..coz it seems nowdays BN is hurting da rakyat with all sorts taxes n un control price hikes...

  36. Anonymous9:33 am


    Due to the inefficiencies of our so called 'leaders' the people now suffers.
    We are like worker bees. Working everyday only to have our salaries taken away. Even if you say its minuscule but still, for an average income owner such as myself, its really a burden.

    The government's reason for us to raise oil prices is because of global oil price hike. But as far as im concern, we have our oil wells. Whats wrong with using it like what Bruinei does to their people instead of selling it but still i have yet to see any profits of the sales as the local oil prices still keeps going up. They say they must abolish the subsidy so that our neighboring countries will not smuggle the oils. But thats their job to make sure they tighten security and make sure that doesnt happen. but instead, they chose to raise the price and abolish the subsidy. in the end, we are to pay.

    About the MMFH (malaysia my first home) program. ITS STUPID! for an income owner of less that 3K can no longer afford to pay for the housing loans. Imagine with the BLR increase and the cost of living is higher than usual. To pay housing loans of 150K - 220K would range about 800-1.5K a month. not including the costs for basic costs of living. Minus the EPF deductions the salary would be left at a merely 2.7K roughly not including the bills, Ccards and etc. So you do the math and now the electricity bills have gone up.

    I dont think Malaysia can really be a fully developed country because we are not a self sustaining country. We are stupid enough to go for globalization which is a crazy dumb thing. Who the heck sets the standards of globalization? Because of that we now dependent on global prices controls by economically unstable nations.

    The PM said Malaysian will be a high income nation. But i reckon he meant that we will be like Indonesia earning hundreds of thousands of Rupiah but value wise is nothing.

    Our Ringgit value earned is now no more that 30% of its actual value in terms of the power to spend.


    I'm not condemning the government nor do i support opposition. To me, we are still a kid trying to make it big in the real world. I dont know when we can really mature up.

    Sorry for the long comment. Its just that i need to vent out. I'm one of those ppl who is greatly impacted by the new price hikes of EVERYTHING !!


  37. Anonymous4:15 pm

    Duhh... i thought those pendatang always bragged about themselves not needing any subsidies and tongkat..those are the stuff for bumiputera only as they always said..

    So, wtf bitching so loud this time..better just keep the subsidies for the deserving bumiputera than extending it to those parasites that only know to bite their host..


  38. Skilgannon10669:45 pm

    Anon 4:15 PM

    So, why should the deserving majority require subsidies if (a)they are well-educated (b)hold good, well-paying jobs (c)have steady economic growth to look forward to in the years ahead?

    Push comes to shove, why should the govt be paying out RM15-20 billion this year in fuel subsidies alone?

    And why should the prices of basic food items be subsidised or subject to price controls? Hasn't the govt heard of "means testing"?

    When every other country is trying to cut budget deficits, the Malaysian govt goes on it's own merry spendthrift way. And it's not as if we are getting value for money out of the whole thing, are we?

    How much subsidies did it take UDA to chalk up debts of RM400 million? Or how much has Malaysia Airlines accumulated in terms of losses since it was set up? Subsidies to blame?

  39. Anonymous3:29 am

    These APEK/AHSO talk so loud about subsidies.. they have been practicing these subsidized prices amongst themselves, ever since they sat foot on this land.

    Only now they keghiau kuat2 because Bumis dah cerdik, many now shop in hyper/super/mini markets with prices boldly and clearly displayed. So susah mau kelentong..

    Just look at the Amanah Saham Wawasan 2020 shares, they wallop bersih..My neighbour 7am already waited at the post office gate, and rushed in to ensure he got to buy his maximum share, came home so excited as if he just won a 30million lottery!

    Open houses, see how they wallop all the food spread on the table? Macam tak makan setahun! Tapau inside plastic containers some more...

    Ini semua kaki pelahap..Duk peghembang apa lagi yang mereka boleh wallop..

    Thats the beauty of having family members fluent in Mandarin and other dialects, we see and hear as well.



  40. Anonymous5:41 am

    Star: Updated: Tuesday June 7, 2011 MYT 4:56:59 PM

    Govt launches website for public to compare prices at 1,225 retail outlets.

    The public can now check and compare the prices of consumer products sold at 1,255 retail outlets nationwide by clicking on the;

    1Malaysia Pengguna Bijak (1MPB) portal.


    "who's afraid of the big bad wolf, the big bad wolf, the big bad wolf?"


  41. Anonymous6:47 pm

    bro Perwira,

    chingkies are just plain babi.. they are what they eat..babi attitude & behaviour and suddenly now go gilababi.. you know what, all those kandang babi in Penang also got subsibabi from govt..

    :D muhahahaha
    -anti hindraf & ultra chingkies-

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