Fair Wage & Malaysia Bonus

The "FairWage" and Malaysia Bonus proposal was first raised in the DAP Alternative Malaysia Budget 2008 announced in September last year. Given the recent changes in the fuel subsidy system, I thought it's an idea to put up the section on the above here on this blog for discussion.

But before proceeding to share your 2 sen, let me first share the key assumptions behind the policies suggested:

1. Welfare provision is a key responsibility of the government for the less fortunate in the country. (Otherwise, it'll just mean no subsidies or grants at all)
   
   
2. The policies below are formulated based on the principle that product subsidies tend to be very distortionary and unevenly distributed, hence a more targeted approach is required.
   
   
3. The exact quantum of award/bonus suggested below may require further adjustment with more precise data from Government.
   
   
4. Please also read the following in conjunction with the other posts I've put up on this blog. It may make more sense that way ;-)
   

The EPF is a social security institution formed according to the Laws of Malaysia, Employees Provident Fund Act 1991 (Act 452) which provides retirement benefits for members through management of their savings in an efficient and reliable manner. With rising costs of living, extended life expectancy and more expensive medical treatments, it is critical that Malaysians save as much as possible to ensure sufficient funds for retirement. It is also important for as many Malaysians as possible to be included in the system.

However, as studies have shown, low-income Malaysians are facing significant difficulties in saving enough via EPF. As a result, the Government must act to assist this group of Malaysians who face various challenges in the face of globalisation, particularly with a stagnant or declining real wages. This is clearly reflected in the 9th Malaysia Plan Gini coefficient statistics where by income disparity among Malaysians has widened substantially. Malaysia ranked highest in terms of income inequality in Southeast Asia.

To assist low and medium-waged workers, DAP proposes to raise the Employer EPF Contribution Rate from the current 12% of total wages to 15%, representing a 25% increase. This will in turn raise the total contribution from the employer and employee to the fund to a total of 26%.

At the same time, in view of the increase in cost for the employers, which may in turn affect the competitiveness of Malaysian companies, it is proposed that a limit of RM8,000 per month or RM96,000 per annum be set to Employer contributions to the EPF. That means that for employees earning above the limit, their EPF contributions will continue to be calculated at the limit level.

However, for middle-age workers who are earning below RM1,400 per month , it is clear that they will continue to face severe challenges despite the increase in employer’s EPF contribution. Whilst younger workers may be learning the ropes and learn new skills to upgrade their income level, older workers will face difficulties in our fast-changing economic environment and are in the greatest need of assistance from the state to make ends meet.

With the oil and gas sector contributing handsomely to the state coffers, it only makes social sense to share part of these gains with the less fortunate and lower income tiers within our society. However, at the same time, we still need to continue to incentivise these workers to secure employment to avoid over-dependence on the state. Hence, DAP proposes “FairWage”, an integral component of MENUS in promoting social justice. FairWage has a 3-prong strategy for implementation:

1. To increase that take-home pay, workers will contribute a lower rate to the EPF. For with pay below RM900 per month, employee contribution to the fund will be waived while for those with income of not more than RM1,400 per month, the employee's contribution to EPF shall be reduced from the current 11% to 5%.
   
   
2. To make them more employable, employers will reduce their rate of contribution to the EPF. For workers above the age of 35 to 55, earning between RM900 to RM1,400 per month, the employer contribution shall remain at the current 12%. For those earning less than RM900 per month in the same age group, the employer contribution shall decline to 10%.
   
   
3. To compensate for the above, the Government will give workers FairWage income supplements to achieve a higher level of income. For workers aged 45 and above, receiving monthly income below RM900 per month, they will receive an annual income supplement Proposed 2008 Malaysian Budget Democratic Action Party of RM2,400. For those workers above the age of 35 earning less than RM1,400 per month will receive RM1,600 per annum. Of the supplement, a quarter shall be in cash form, while the balance will be channelled into the EPF accounts. By channelling a larger portion into the EPF, it will help the workers save for their future needs. An additional 10% on top of the income supplement shall be applied to those who live in the Klang Valley, Johor Bahru as well as on the Penang Island to cope with the higher cost of living.

As an example, a 48 year old worker in Muar earning RM800 per month used to take home RM712, will find his take-home pay increased by 19.4% or RM138 (RM88 + RM50) to RM850. At the same time, despite a reduction in employer contribution to 10%, the overall contribution to the EPF account will increase from RM184 to RM230, representing a 25% increment. His total monthly income will hence be RM1,080, an increment of 19.5% from before.

As a separate example, a 42 year old worker in Kuala Terengganu earning RM1,200 per month will find his take-home pay increased by 9.9% or RM105.33 (RM72 + RM33.33) from
RM1,068 to RM1,173. At the same time, the overall contribution to the EPF account will increase from RM276 to RM316 monthly, representing a 14.5% increment. His total monthly income will hence be RM1,489, an increment of 10.8% from before.

“FairWage” is not an original idea but an adaptation of best practices successfully implemented in other advanced countries. For example, in the United States, “Earned Income Tax Credit” acts like a negative income tax for low-wage workers, supplementing their earned income. Similarly, the UK has implemented a “Working Tax Credit” which has helped to reduce poverty and encourage work. While most recently, Singapore has introduced “Workfare” which supplements the income of older low-wage workers.

In addition to assisting current workers registered with the EPF, FairWage will also provide incentives for more workers, particularly odd-job or ad hoc labourers to insist on registration with the EPF by their employers due to higher pay. As a result, the overall system will be more inclusive for Malaysians, particularly those from lower income groups.

On top of that, DAP would introduce a “Malaysia Bonus” which will vary in accordance to the performance of the economy whereby poorer Malaysians will be able to share the fruits of the country's wealth. For 2oo8, the Malaysia Bonus shall be paid to those who have worked at least 6 months in 2007 based on their last drawn pay in December 2007. The Malaysia Bonus shall be channelled directly into the worker's EPF account and shall be available for immediate withdrawal.

1. Those earning less than RM3,000 per month but at least RM2,400 will receive RM300
2. Those earning less than RM2,400 per month but at least RM1,800 will receive RM600
3. Those earning less than RM1,800 per month but at least RM1,200 will receive RM900
4. Those earning less than RM1,200 per month will receive RM1,200

We will review the above schemes annually to determine the best mechanisms to achieve a better living quality for all Malaysians without detrimental effects to a person's incentive to seek work. As an integral part of MENUS, the above policies will ensure that all Malaysians in need are taken cared of by the Government, the country's wealth is shared equitably and no community will be left behind.

(The above policies form the foundation of DAP's call for up to RM3,000 be granted to deserving Malaysians to help them achieve a fairer deal. By our estimates, the above policy will cost substantially less than what the Government currently spends on subsidies but it goes directly to the people who needs it.)

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Parliament's First Vote

Whoa! The first case of voting in parliament for a long time. Parliament has been extended by 2 days to Thursday 29th and we are now in the midst of debating supplementary budget allocations.

Basically, supplementary budget allocation is debated in parliament to retrospectively approve allocations which has already been over-spent by the Government.

One of the line items is additional allocation of RM16 billion to statutory bodies. Amongst the mini-line items include additional RM9 million to sponsor Le Tour d'Langkawi, Champion's Youth Cup (CYC) Football Tournament and the liquidation of SUKOM Bhd.

After the debate on the issue, a vote by voice is usually called for, and typically, BN will just win hands down. But this time round, it was noted that there appears to be less BN members in the House compared to opposition members (the "Setuju" sounded weaker than the "Tidak Setuju") and straight away, there was a suggestion that a vote by ballot be called.

The Speaker after some contemplation agreed, and the bell was rung to bring in the House members. Suddenly you find all the BN representatives including many ministers streaming in, some belatedly. Even the Prime Minister, who is rarely seen in the House came in. The House was in a light and jovial mood though as the respective party whips went around registering votes around the House.

Well, the results was only to be expected. There was 92 votes from BN while 60 for the opposition, and it appears that the 1 independent candidate abstained.

I voted "NO" to the supplementary budget allocation because I disagreed with the manner in which the budget had been prepared and executed for supplementary budgets in this country is a mere retrospective technical approval, which in actuality makes a mockery of the previous budget approval.

In addition, there were clearly many items in the supplementary budget such as the controversial CYC as well as the neverending SUKOM accounts which are not transparent which just seems to be a sponge for more funds.

Well, for what it's worth, I registered my first physical vote in Parliament today ;-)

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DAP Economic Policies

Many have been asking us, now that DAP is leading the government in Penang and part of the government in Perak and Selangor, what are the economic policies which we plan to implement in these states.

Some may be aware of the "Malaysian Economic Agenda" promoted by Parti Keadilan Rakyat. Similarly, details of economic policies promoted by the DAP is encapsulated in the 2008 Malaysia's Alternative Budget launched in September last year.

It's a 54-page document, so if you are just interested in the key highlights (3 pages), read on. ;-)

The proposed DAP 2008 Malaysian Budget focuses on the twin challenges of globalisation and our high dependence on oil and gas resources. With increasing competition from other developing countries and the rapidly evolving technology markets, it is critical that Malaysia puts in place a system which will be able to exploit the opportunities provided by, and at the same time mitigate the negative impact resulting from globalisation. At the same time, a 40% dependence on government revenue from the oil and gas sector is of serious concern, especially in the light of oil reserves which will last for only another 2 decades and Malaysia becoming a net oil importer by 2011.

This Budget will also serve as a distinct departure from the current administration's New Economic Policy (NEP) which is driven by race. The underlying rationale and approach to our Budget is the “Malaysia Economic & National Unity Strategy” (MENUS) which will be based on performance, competence and needs of all Malaysians.

Therefore it is imperative for the Government to build new capacities for the future to ensure that our productivity increase is more than sufficient to replace declining contribution from the oil and gas sector. At the same time, we will strengthen our social security system to ensure that the poor, less fortunate and under-privileged are not left behind in our pursuit for excellence. The wealth of natural resources on our shores must be shared equitably to make sure that everyone gets to benefit and taste the fruits of our land. We must also shake off our habit of designing world-class blueprints, only to fail miserably in their implementation. The DAP will put in place a robust system to improve productivity and competitiveness of the government's delivery system.

Finally, we will utilise responsibly all fiscal measures and tax instruments to ensure that the country does not bury itself in debt and to avoid expenditure on mega-projects which are unlikely to bring significant benefits to the population. Our policies are designed to make ourselves competitive relative to our neighbours as well as to nurture dynamic innovative and entrepreneurial Malaysians.

The key policy measures proposed in the Budget include:

• Legislating the use of oil and gas revenue to ensure that a substantial portion of the revenue is spent on education as well as research and development to build the necessary economic capacity for Malaysia, to ensure that the increases in productivity and innovation will more than compensate for the expected decline in oil revenues. It is proposed that 50% of oil and gas revenues be invested in human capital and research and development, while another 25% be used to strengthen the social security for Malaysians who are in need. Legislating the utilisation of funds will also prevent the mis-allocation of resources to bailout failed projects or other non-productive sectors.
  
  
• Hence, RM43.3 billion is allocated for education and training, accounting for 26.3% of the overall 2008 Budget. The focus of the expenditure will be to enhance the qualitative elements of education instead of the quantitative elements. RM3.2 billion has also been allocated for Research & Development.
  
  
• RM13.6 billion is allocated to improve the quality of the nations transportation infrastructure, particularly the public transport system. The bulk of the increase goes to development expenditure for transportation, which will increase from RM7.3 billion to RM9.5 billion. Key attention is given to the 3 highly congested urban centres – the Klang Valley, Penang Island and Johor Bahru. A blueprint for the “Valley Circle” rail network will also be developed to improve inter-suburban connectivity, by-passing the congested Kuala Lumpur city centre.
  
  
• Barisan Nasional's policies of guaranteeing highway toll concessionaires as well as independent power producers (IPPs) extraordinary profits with grossly unequal contracts with little or no risks to the latter are the clearest cases of the Government failing to protect public interest. The impact of these policies are increasingly felt today with rapidly rising toll rates and energy prices. It is hence imperative that the Government renegotiate these contracts to protect the interest of the public within a 6 month period. In the event whereby no significant headway is made in the negotiations, it is proposed that the Government move to acquire the assets of these entities. The resultant savings will then be passed on to consumers or be diverted to other public interest projects, such as the public transport system.
  
  
• When the Government launched the Multimedia Super Corridor (MSC) project 10 years ago, it promised to make every effort to grow and support local MSC status companies. However, despite the rhetoric, the Government being the largest consumer of information technology services in Malaysia has not given preference to these companies. It is therefore important that in this proposed budget, Malaysian MSC status companies be given specific preference in tendering for the Government IT-related contracts to help nurture these companies into successful regional players.
  
  
• As part of our philosophy, no person or community in need, irrespective of race or religion will be denied the necessary government assistance. In line with this, the DAP will implement “FairWage”, a policy which serves to improve the livelihood of low wage earners above the age of 35, which will at the same time incentivise employers to provide increased employment opportunities. A “Malaysia Bonus” of up to RM1,200 will be granted to Malaysians with income not more than RM3,000 per month. In order to assist the elderly above the age of 60, many who are having problems making ends meet, those qualified will enjoy an the “Senior Malaysian Bonus” of up to RM1,000. These bonuses are channelled into their respective EPF accounts.
  
  The FairWage policy and Malaysian bonus will cost approximately RM9.3 billion to administer.
  
  It is part of the proposed programme to share the fruits of the nation's wealth, particular from the oil and gas sector with all Malaysians in need. In the longer term, more assistance programmes will be carried out in this grant-based mechanisms which are means tested instead of via subsidies which are distortionary in their impact, and often disproportionately benefiting the wealthy.
  
  
• One of the core pillars of MENUS is that all Government contracts should be tendered in an open, competitive and transparent manner. All qualified companies shall be provided with equal opportunities to secure Government supply contracts and projects. To prevent overwhelming disruptions to the current system, this policy, free from race-based requirements, shall be implemented on a gradual basis, commencing with projects or supply contracts sized above RM10 million for 2008. In view of the challenges brought by globalisation, all tenders shall be made competitive, open and transparent by 2015. Assuming a conservative 10% savings is achieved via the new tendering system, this will result in absolute savings in excess of RM5 billion per annum in conjunction with quality improvements.
  
  
• The transformation of the Malaysian economy into one that is knowledge-based will not succeed without the critical ingredient of innovation and entrepreneurship. Therefore it is proposed that the Government set up a new RM250 million seed fund, STARTUP where we will act as a matching co-investment fund with reputable private investors who will assist in the mentorship of the start up companies. To encourage private investor participation, losses incurred by such investments shall be tax deductible from the investors' individual or corporate income tax. To further boost entrepreneurship, start-ups shall enjoy full tax exemption on their first RM200,000 chargeable income for each of their first 3 years of assessment.
  
  
• Government revenue from small medium enterprises which constitutes more than 99% of all enterprises in the country has clearly declined with the dependence on oil and gas revenue. To revitalise the SME sector, and to assist many SMEs whose counterparts in many countries in the region enjoy significant tax advantages, it is proposed that the tax rate for SMEs on their first RM5o0,000 chargeable income be reduced to 18% from the current 20%. In additional a new partial tax exemption threshold will be set at RM200,000 and taxed at 12%. This means that a SME with a chargeable income of RM900,000 will be taxed at an effective rate of 18%, in line, particularly with its competitors across the causeway in Singapore. This measure will help make Malaysian SMEs to be more competitive and at the same time attract more SMEs to set up business in Malaysia, creating more employment opportunities.
  
  
• DAP is proposing a 1% reduction of the top tax bracket to 27%. More importantly however, there will be a revision and a simplification of the progressive tax brackets which will result in significant reduction in taxes by all. Most importantly, to assist Malaysians to cope with the rise in living expenses, particularly in urban areas, the first RM15,000 chargeable income will become tax exempt, with the subsequent RM15,000 taxed at 7%. Currently, only the first RM2,500 is tax exempt while the next RM2,500 is taxed at 1%. Based on the new tax structure, a married worker with RM3,000 pay per month, a full-time housewife who looks after 2 young children will pay no taxes, whereas under the previous tax structure, he will be expected to pay between RM55 to RM445 depending on his insurance premiums and medical expenses for his family, including parents.
  
  
• The rate of global climate changes is accelerating and it has become absolutely necessary for Malaysia to play its part in protecting the environment. Hence, a “Green Tax” is to be implemented in 2010 whereby a “carbon tax” is charged at RM25 per tonne of CO2 equivalent, with the exception of methane emissions from the agricultural sector as well as special exemptions for carbon intensive businesses which adopts global best practices on emissions. In addition, a 5% severance tax shall be imposed on the extraction of metals and forestry products in the country. However, companies which secure certification from The Forest Stewardship Council (FSC) accredited certification bodies will be granted the severance tax exemption for promoting responsible management of the forest.
  
  
• As a part of our new source of revenue as well as to negate the rent-seeking culture, the approved permits (APs) current issued for free by the Ministry of International Trade & Industry to a select pool of “businessman” shall be auctioned to the highest bidders instead.
  
  Based on an estimated 70,000 APs issued per annum and a conservative RM25,000 market price, the auction will provide an additional RM1.75 billion to the government coffers.
  
  
• Women will also benefit significantly with the proposed extension of paid maternity leave from 60 to 90 days if they have worked for at least 180 days prior to delivery with the employer.
  
  Their pay will be shared equally by both the employer as well as the government. This together with other measures proposed in the Budget will play their role in strengthening the bond between the mother and child, promoting strong family values, while at the same time, encourage more women to join the workforce. As at 2004, Malaysian women participation in the work force stands at 47.3%, significantly below that of our neighbours, Singapore and Thailand at 53.9% and 64.2% respectively.
  
  
• Finally, this budget represents a budget which seeks active involvement from the civil society. Instead of attempting to tackle all issues on its own, which the government will not be able to competently and effectively, sizeable grants will be made available to specialist non-governmental organisations (NGOs) to promote, educate and run various social causes and programmes. RM240 million has been set aside as partial or full grants for NGOs to pursue environmental causes, eliminating poverty, promote healthy living, managing women issues or assisting the disabled, to be disbursed over the next 5 years.

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依赖石油彩票

The following article on "Oil & Gas Lottery" was published in my weekly column in Oriental Daily on October, 22nd. I wrote on the same issue on this blog in my earlier post here. ;-)

马来西亚是一个得天独厚，拥有丰富天然资源的国家。我们特别要感激国家拥有大量的石油与天然气，以致国油(Petronas)能够成为国内唯一挤身《财富杂志》500 强的公司。截至2007 年3 月的财政年度，鉴于国际原油价格在过去4 年内，从每桶低过25 美元飙升至超过70 美元，让国油取得763 亿令吉的税前盈利。

最重要的是，国油去年透过税务、石油税、分红及出口税，为国库带来了537 亿令吉的收入。国油及其它设在马来西亚的石油与天然气公司，预计在2007 年为政府带来46.8%的收入。相较于2004 年约25％，以及2006 年约30％，国油不断增加为国家所带来的收入。这些统计显示当前的马来西亚非常依赖石油与天然气工业。

马来西亚拥有丰富的石油与天然气资源，就好比中彩券般幸运。这个资源总有一天会耗尽而不再复返。根据《石油与天然气期刊》，马来西亚截至2007 年1 月的石油诸藏量，从1999 年巅峰时期的46 亿桶下跌至30 亿桶。这个储备量大概只能让我们再支撑大约20 年。

除此之外，若以石油产品消费每年增长4％保守估计，马来西亚预计将在2010 年成为石油净入口国。我国当前的贸易顺差，乃因为跟石油及天然气相关的产品，占我国出口量超过11％所导致。这种过度依赖石油与天然气有限资源的可怕趋势，必然导致国家经济承受巨大的风险。

马来西亚不能跌入经济学家称之为“资源灾祸”的陷阱，即资源匮乏的国家发展比一些资源得天独厚的国家来得好。这令人想起香港、新加坡和瑞士对比拥有丰富油田但发展不健全的中东国家。这样的现象称之为“荷兰症状”。60 年代，荷兰在其北部海域发现油田和天然气，然而上述资源耗尽后，却被失业率和生产力
低的制造业困扰，这是发现资源的负面作用。

真正让马来西亚最担忧的是，生产领域过度依赖天然资源，造成“寻租经济”的现象 ，导致政府内外的掌权政党集中精力于取得较大份额经济蛋糕，而不是创造一个更大的蛋糕。

因此，为了确保一旦石油与天然气税收减少后，我们还可提高本身的生产能力，政府一定要以最有效率的方式，大量利用我们的彩票奖金投资在人文资本。诺贝尔经济学奖得主约瑟夫斯蒂格利茨曾说过：“丰富的天然资源，应该算是一种福气，而不是一种诅咒。我们都知道该什么做，可是缺乏的是政治意志来达成 。”

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Subsidies: RM35b or RM10b?

UMNO leaders typically attempts to talk a little more sense prior to an election, and this years' UMNO General Assembly, which is likely to be the last one prior to the next general election is no different.

UMNO Youth Deputy Chief, Khairy Jamaluddin, rightly criticised the current subsidy structure where the rich benefits more from the Government's subsidy scheme than the poor.

What was however interesting was when Khairy claimed that:

In all, the government had to foot RM35 billion, or 25 percent of government income, lamented Khairy during the debate on economy and education at the Umno assembly today.

Now, this RM35 billion figure is absolutely new to me. For the last I checked, specifically at the Goverment's 2007 and 2008 budget, the subsidy levels are no where near the purported figure given by the Member of Parliament and possible Minister in the making.

Based on the Budget figures provided by the prime minister's office, the subsidies allocated by the Government amounts to only RM12.2 billion and RM10.2 billion for 2007 and 2008 respectively, as shown in the table below.

Federal Government Operating Expenditure by Object 2006-2008

The question, I have then is, who is telling the truth? If the Government's budget is providing the accurate figure, then why is Khairy sensationalising the Government's budget by more than thrice the original amount? Was it to make it look like the Government's burden is higher than it actually is at "25% of total revenue", as opposed to only 7%? It is to illicit the rakyat's sympathy for the government which has wasted billions of the rakyat's tax payers monies in all manners possible?

Or on the other hand, more worryingly, did the Government published budget figure totally inaccurate and hides the fact that the Government (mis)allocates an incredible amount of funds to subsidise parties of unknown origins?

I've always had my suspicions and skepticisms over the manner by which the Government produces their budget numbers (e.g., the discrepancy of RM8 billion (!) expenditure between the Prime Minister's budget speech versus the published Economic Report), but if the above discrepancy is indeed "true", then it's absolutely shocking!

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Budget 2008: Knowledge Economy

Knowledge economy is a big subject. My Oriental Daily column is limited to 700 characters. Hence I tackled the subject in my article last week from the type of investment the country appears to be attracting.

For the past 10 years, the Government has proclaimed that Malaysia needs to be come a knowledge economy. However, besides the "statement of intent" made in the Budget 2008, no particular policy raised appears to leads towards a knowledge economy, particularly from the foreign investment perspective.

As a developing country, we are dependent on technological investments from developed countries to catalyse and expedite our progression towards a knowledge economy. In the 1980s, it was investments from Intel, Motorola, Dell, Western Digital, Sharp and their likes that propelled us to become a manufacturing force to be reckoned with. However, in recent years, we have not seen much of such investments coming into Malaysia.

Instead we are getting investments from the oil-rich countries. These investments are certainly welcome. However, at some point in time, after the "boom" created via investments in the property and construction sector reaches the next phase, where will the factories and businesses that will "occupy" these properties come from? Without attracting the knowledge-based investments which will bring not just a construction boom, but also employment, skills and technological know-how, as well as the creation of entirely new secondary supporting industries, how can we "move on" to become a knowledge-based economy and set ourselves apart from the likes of Thailand, Vietnam, Indonesia and China?

These were some of the questions I raised my article "知识经济开空头支票" or "Empty Promises on the Knowledge Economy" last week.

知识经济开空头支票
潘俭伟

去年，首相阿都拉通过第九大马计划刻意宣布要把我国发展为知识经济国。其中最大原因是全球化的高度竞争，让我国的外来直接投资额遽跌。从1996至2005年期间，我国的外来直接投资跌45％至39亿美元，反观新加坡却增加超过一倍至210亿美元。

为了扭转颓势，政府的目标看来锁定吸引中东投资。最近政府所推动的伊斯干达发展区(IDR)计划吸引到42亿令吉来自中东的投资额。首相也通过明年度财政预算案提出一些能够吸引更多中东投资的政策，其中包括给国内推出回教证券的证券行享有税收优惠。

政府希望吸引中东投资及资金当然没错。但是，鉴于中东资金来自石油飙涨所赚取的收入，除了能够投资股市、地产与建筑领域，就不会带来其它的经济效应。其实，我们应注重各别投资所能带来的乘数效应，进而带动国家经济发展。

马来西亚曾吸引全球著名的科技巨贾，包括英特尔(Intel) 、摩托罗拉(Motorola)、戴尔(Dell)到我国研发及生产最新的科技。这类外来投资不只
带来大量的资金，也带来了大型工厂并制造上万个就业机会、高科技与知识转移，以及协助许多中小型供应与承包商成长。

但是，在过去10年，我们的生产工艺显然落后他人。举个例子，邻国新加坡目前正积极吸引首创新产品的投资商，就如最新的PS3主机与Xbox使用的电子晶片制造商。法国的Soitec半导体公司，亦在新加坡投资7亿新元设立其首个岸外晶圆生产基地。这是属于高科技、高精度的晶圆工艺。新加坡成了Soitec在亚洲设立唯一海外生产基地的国家。

我要进一步争辩，若我们能吸引这类高科技公司到马来西亚投资，其它投资基金包括来自中东的资金，很自然就会引入我国。反之，即使我们能够在短期内吸引到中东资金，却吸引不到或无法建立这类高科技企业来推动国家经济发展，现有的投资基金迟早也会退出我国的。

所以，我们有必要在全球化时代，通过划时代的工艺把全球投资给吸引回来。否则，政府所构想的知识经济根本就是一张空头支票！

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Budget 2008: The Neglected SMEs

Last week in my regular column in Oriental Daily, I wrote on the fact that in the latest Budget 2008 announced by the Datuk Seri Abdullah was extremely disappointing for it neglected the largest productive sectors of the economy, both the manufacturing sector as well as the small medium enterprises (SMEs).

In the entire 44-page budget, there was only 1 incentive for the SMEs, that is taxes for new start ups can be paid in a more flexible fashion within the first 2 years. The manufacturing sector, despite contributing to 30% of our economy, was not mentioned at all except when it was mentioned that it is only expected to grow 3.8% in 2008 from the estimated weak 3.1% in 2007.

Both the SMEs and the manufacturing sectors are facing huge challenges in terms of globalisation and competition. The fact that the Government made no additional incentives or policies to enhance the competitiveness of our local companies relative to our neighbours and competitors is just "shocking". Clearly, there are some misplaced priorities in the Government's economy policies despite the record-breaking RM176.9 billion budget expenditure.


被忽视的中小型与制造业
潘俭伟

首相每年宣布的财政预算案，对国家发展是个很重要的里程碑。媒体大篇幅专注报道预算案，不完全是因为其涵盖我国未来一年预算的开销及收入；更重要的是，预算案指导政府如何面对当前的经济挑战，并发挥本身的潜能。

随着世界经济越来越全球化，同时带给马来西亚更剧烈的竞争。若我们继续固步自封，并让自己成为井底之蛙，这终究会对经济造成无可弥补的破坏。

政府刚刚宣布的2008年预算案，其预算的1千769亿令吉开销再创历史新高。若跟10年前相比，这笔开销无疑增加了两倍。因此，国内企业界总是期待政府通过 庞大的开销，为它们带来一些有利及具有创意的新政策。

然而，这份厚达44页的预算案最让人失望之处，就是政府只提到让国内中小型企业新设立的公司延迟缴付所得税。更失望的是，预算案只是两次轻轻触及国内的制造业。而且，预算案还蛮不在乎地估计制造业今明年将分别以3.1％与3.8％成长。

根据2000年调查显示，中小型企业占国内企业超过99％，其输出占国家总生产率的29%。中小型企业也提供超过560万个就业机会，并为国内生产总值带来31％的贡献。这个领域对国家生产如此重要，却在预算案似乎不值得一提，真是让人难以置信。

新加坡近几年来为支持及鼓励中小型及制造业成长，尤其是加强它们面对全球
化挑战的竞争力，如今推出许多高效率的政策。除了把公司税减低至18％，政府
还在30万令吉的水平设定新门槛，让中小型企业享有部分税务豁免，即首30万令吉新币可征税收入只须缴纳9％的公司税。

为提倡创业及加强创意能力，所有新设立公司首10万令吉新币可征税收入，在首3个税收年度可享有全面免税。这些政策有助于提升新加坡公司的竞争力，同时鼓励开发更多对经济有效率的活动。

政府推动制造业成长及创新肯定肯有特殊的意义。目前，我国政府非常依赖石油与天然气收入。2007年，石油与天然气占国家总收入超过40%的比率。一旦我国从2011年开始变成石油净入口国，而国内石油储备量在未来不到20年内即将枯竭，届时国家收入就会大受影响！

我们唯一能够补救的方法，就是通过创业及创新提高国家的经济生产率，进而替代未来可能失去的石油收入。政府不能忽视中小型企业与制造业的潜能。否则，经济危机迟早会摆在我们眼前！

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糖果在哪里？

I wrote this article on the Budget 2008 for Oriental Daily last week, asking "Where the Candies?" I'll be writing more on the Budget this week, as my schedules frees up a little ;) So watch this space ;).

糖果在哪里？
潘俭伟

上周五，首相阿都拉巴达威刚宣布来届全国大选之前最后一份财政预算案。在此之前，每家媒体都认为这是一份有许多糖果、让国人笑眯眯的预算案。

许多人包括我在内都对预算案有颇高期望。然而，当我听了首相演说之后，我的感觉简直可用3个字来形容，就是“大失望”！

阿都拉所宣布的是一份涉及庞大开支的预算案。政府在2008年总拨款高达1千769亿9千900万令吉。这是我国独立50年来最大笔的预算案拨款，即比2007年拨款增加近11%，亦比10年前增加269%。

因此，这笔庞大的拨款应该可带给人民许多好处。那么，人民有否受惠呢？

当然，个人肯定有受惠。这包括免费赠送一套课外活动制服予家庭收入不超过1千令吉的学生，并宣布所有学生可借用学校本来就免费提供的贷书。

阿都拉还宣布国人能够每个月提取公积金偿还购屋贷款。但是，大家千万要记得，公积金本来就是自己的血汗钱，而政府并没有拨款或津贴国人。

此外，政府也宣布一些免税措施，包括国人明年购买体育器材可享扣所得税300令吉。然而，我国2千700万人口所缴纳的所得税不到200万令吉。要是您目前还没缴纳所得税，您就没有受惠的份儿。这意味有关政策只是让较富裕者得利。

最让国人失望的就是政府没减低个人所得税。虽然在预算案宣布前，几乎每位财经分析员或会计界人士都猜测阿都拉肯定把个人所得税从28%调低至27%，甚至是26%。

尽管这份预算案显示政府收支大幅度增长，但个人所得税却是一分钱都不扣。

除了减轻人民，尤其是城市中产阶层的负担之外，调低个人所得税还有其它正面的
效应。全球许多国家的个人所得税都在调降，甚至我们的邻居――新加坡个人所得税最高缴幅也只有20%。

所以，国人所得税必须调低，才能把外国专才引入我国，尤其是引至重要的知性密集工业领域。与此同时，政府也必须防止我国专才流失到海外，因此更有必要调低个人所得税。

在这种情况下，政府再创记录新高的拨款――1千769亿令吉的开销到底又去了哪里呢？

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Budget 2008: Hear Zewt

Hmm... there hasn't been much time for me to sit down and write down my thoughts on the disappointing budget in full (that means many many pages...). Sigh. I'll try to do this soon, before the entire interest in the Budget sort of fades away.

But in the mean time, have a look at 2 posts by Zewt:

(1) Clarifying the "tax free" dividend policy

...if you happen to be a shareholder of that company, and so happened your tax bracket is lower than 27%... too bad, you’re screwed. If you’re a pensioner and hold a lot of shares, you’re wonderfully screwed.

(2) and some of his general thoughts on the Budget 2008

The proposal which was supposed to make us all feel very good is that EPF contributors will be allowed to withdraw balances from Account 2 to pay monthly housing instalments. Sounds like a good idea. But if you were to think properly… the government is basically allowing us… to use our own money… to pay for our own house. And we are supposed to feel thankful about it? You tell me…

Enjoy. ;)

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Budget 2008: Who Benefits?

Looks like my post-budget work hasn't completed. So just some quick announcements here. There are going to be plenty of discussions and forums on the Government's Budget 2008, yes, the much touted pre-election budget today at 4pm (and I'll be stationed at the Parliament).

For those who are interested to read the DAP version of the Budget, you can now download both the English version as well as the Chinese version. The Malay version is "work in progress".

But for a start, here's what you can do to find out more this weekend:

1. SinChew Budget Discussion Forum (Mandarin)

I'll be speaking tonight (yes, that's this evening!) on the Budget presented by the Prime Minister at the Sin Chew Jit Poh Auditorium in Petaling Jaya. The forum will be in Mandarin together with 3 other eminent speakers. Details are as follows:

Date: 7 Sep 2007
Time: 8.00 pm
Venue: Sin Chew Jit Poh Auditorium, Petaling Jaya

2. Malaysian First: Budget 2008 - Who Benefits? (Mandarin)

The first in a series of forums to be held by the DAP after the Prime Minister announces the budget will be on this Sunday (9th Sep) evening (7.30pm) at the KL & Selangor Chinese Assembly Hall. This one is a Mandarin forum:

大马人优先：2008预算案谁得益？
Date/日期：2007年9月9日星期日
Time/时间：晚上7时30分
Venue/地点：吉隆坡雪兰莪中华大会堂楼上会议室 (KLSCAH)

主讲人：

• 民主行动党秘书长林冠英 (Lim Guan Eng)
• 著名经济评论人何启斌博士 (Dr Ho Kee Peng)
• 秘书长经济顾问潘俭伟 (Tony Pua)
• 时事评论人刘镇东 (Liew Chin-Tong)

We will be organising an English Budget forum early next week in Petaling Jaya. We will provide the update on details once the speakers, date and venue is finalised.

See you! ;)

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DAP Malaysian First Budget 2008

Hey guys, finally I've gotten my big project out of the way :) The 52-page DAP Malaysian First Budget 2008 is finally released to the public today, 2 days before Pak Lah's government announces theirs.

I'm too overdosed with caffeine, accumulated over the past 2-3 weeks at this point in time to write too much about it now. But you can read the latest reports by Malaysiakini in English and in Chinese.

Plus, you can download the full Budget document, entitled "Malaysian First: Unity Driven Equity, Growth & Innovation" to get a firsthand account ;). Know that we have worked on the budget with overwhelmingly limited resources both with regards to people and information and we are more than happy to welcome additional suggestions.

OK, got to go get my sleep now. Will certainly post more on the Budget in the coming days. ;)

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