Within a short period of a few months, the Government has made several embarrassing policy U-turns after first trumpeting the new policies. Late December, the Government chose to significantly amend its 2010 Budget announcement of 5% Real Property Gains Tax (RPGT) from an unlimited time-frame to a 5 year period.
This is followed by another shocking reversal of the decision to implement the complicated tiered petrol subsidy scheme, which has already cost the government tens, if not hundreds of millions in terms of project implementation cost. The decision to execute such an impractical policy without proper public consultation exposed the 'hare-brained' nature of the Government's policy-making process.
Now, with the “postponement” of the 2nd reading of the GST Bill in parliament, it marks another loss of face for the new Datuk Seri Najib Abdul Razak's administration, and worse, caused the public confidence of the Government's ability to steer the economy to sink to a new low.
Besides the above U-turns, the Government has also demonstrated severe indecisiveness in dealing with pressing socio-economic issues such as the restructuring of the tolled highway infrastruture which was originally due in August 2009 but has been postponed indefinitely, tariff increase for tolled highways and electricity. Even the much anticipated cornerstone economic policy of Najib's administration, the “New Economic Model” has been delayed twice since the start of 2010 to Jun 2010.
The U-turns and indecisiveness of government policies are further compounded by its inability to practise what it preaches with regards to “open tenders” and maximising value for government owned assets. For example, the Government continues to award mega-projects such as the proposed Matrade's largest exhibition and convention centre in Malaysia which was awarded without any tender, open or closed, to Naza TTDI for RM628 million. Worse, the Government has paid for the above works with a 62.5 acres piece of land, which should have been auctioned openly to “maximise value” for the Government.
This latest U-turn only shows that the Government has not been able to get its act together in managing the country's economy, especially in dealing with the ballooning deficit and government debt which has increased to 52% of the country's Gross Domestic Product (GDP).
While the Prime Minister made several encouraging announcements with regards to the liberalisation of the economic environment in Malaysia at the start of his reign in April last year, the public's hopes on the transformation of Malaysia's economy is now severely dented with a Government that does not know what it is doing and which is missing the woods for the trees by placing priorities on items such as the GST, when it should be doing more to institutionalize best practices such as 'open tenders' to increase efficiency and competitiveness, while reducing wastage and corruption.
The 'postponement' of the GST Bill marks an early success for the efforts by Pakatan Rakyat in our campaign to oppose the tax which penalises the middle and lower income Malaysians. As the Finance Minister said that the Government wants to collate more public feedback before deciding on the GST, Pakatan Rakyat will continue with its public forums especially those which have already been organised to ensure that the rakyat gets the full facts to make informed decisions on the GST.