Saturday, May 24, 2008

Remember the Controversial 'APs'?

I have received a formal reply from the Minster of International Trade & Industry (MITI) on my parliamentary question with regards to "approved permits" for import of vehicles into the country.

My question was:
  1. ...jumlah "Approved Permit (AP)" kereta impot yang dikeluarkan pada 2007 berbanding dengan tahun-tahun yang lalu; dan

  2. apakah anggaran jumlah AP yang akan dikeluarkan pada tahun ini dan adakah MITI bercadang melelong AP supaya hasil yang dikutip Kerajaan dapat ditingkatkan.
The reply from the Minister was as follows:
Bagi tahun 2006, jumlah AP yang dikeluarkan ialah 38,545 unit berbanding sebanyak 57,267 unit pada tahun 2005. Manakala bagi tahun 2007, sebanyak 27,838 unit AP kenderaan telah dikeluarkan.

Untuk tahun 2008, berdasarkan jumlah pengeluaran kenderaan tempatan pada tahun 2007, anggaran jumlah AP 2008 ialah 44,168 unit iaitu berdasarkan had bumbung peruntukan AP kenderaan 10% daripada jumlah pengeluaran tempatan bagi tahun sebelumnya.

Buat masa ini, Kerajaan tidak bercadang untuk melaksanakan kaedah lelongan atau tender terbuka Permit Impot (AP) kenderaan. Ini adalah kerana antara matlamat pemberian AP adalah bertujuan untuk menggalakkan dan memberi peluang kepada usahawan Bumiputera bergiat dalam sektor automotif tempatan. Sekiranya kaedah lelongan atau tender terbuka dilaksanakan, hanya sebilangan kecil usahawan Bumiputera yang mampu membida harga lelongan tertinggi. Ini akan menjejaskan peluang pelaburan sedia ada seperti bilik pameran dan tenaga kerja.
It is disappointing that the government has not decided to make the award of APs a more transparent process which is fair and equitable, while at the same time denying valuable funds which can be raised via auction for the national coffers to help the poor and needy. Based on a conservative market valuation of each AP at RM25,000, an open auction will raise more than RM1.1 billion for the country.

The Minister's excuse that a tender system will not benefit the bumiputera businessman and will only benefit those who are already wealthy is totally unacceptable. Based on past records, APs were largely issued to 4 prominent businessmen popularly known as the "AP Kings". In 2005, it was announced that 80% of the APs went to 20% of the companies, many of which were inter-related.

It can hence be argued that the current opaque policy of awarding APs is subject to abuse and is more likely to create an inequitable distribution of APs. Assuming that the AP is limited to bumiputeras, an open tender by qualified bumiputera companies will provide better opportunities for them to compete and grow. To say that only the richest will succeed in the bidding is also wrong because, bidding too high will not be profitable for the businessmen. Hence it's about bidding smart and not bidding high.

It is important that in our pursuit to raise the number of successful bumiputera entrepreneurs, that they are not created via handouts. The AP system should hence be reformed to encourage the competitive spirit amongst bumiputera entrepreneurs, and not instead serve as a barrier to competition.


Anonymous said...

The rich will be richer, and the poor will be poorer.

Long live the AP kings!

Anonymous said...

The minister is so very wrong.

So what if the bidding favors the rich. They are getting 80% of it anyway.

So if bidding allows the cost of AP to go higher, it only means the govt revenue will be even higher. Tax the rich and use the $ for the general man on the street to help them in housing & education.

Tony, if I were to use your calculation of RM1.1b revenue, it means the govt will be able to provide more scholarships to over 22k students (assuming RM50k for a local degree which is on the very high side)!!

I think we need better economist in the govt team lah.

Justin Santiago said...

Out of curiosity, since the fact is known that APs only go to selected companies, what is the next step in terms of what MPs or state assemblymen could do to make the process more equitable? Or do these questions and answers end here?

Dangerous Variable said...

ONe AP King is dead... 3 more to go. Unfortunately, the dead fella has a son who was crowned the next AP King.

4 empires lived on...

How sad.

Open tender system. Let the government make more money..

SOP said...

If Dato Seri Anwar Ibrahim became the 6th Malaysian PM, who should be his deputy ?

Vote now at

Anonymous said...

The Rafidah bitch will off course justify the AP system - thats how she was able to give "free" money to her late son-in-law - Nasimuddin.

NEO said...

Perato Analysi - 80 20 Rule

Anonymous said...

AP is nothing more than a money making machine for corrupt BN people. Already proven over and over again but still the AAB government still giving them out. Ask Rafidah how many her relative applied for this year. Blame TDM, for it is his cronies who started it. TDM was fully aware of what Rafidah was doing and getting very rich, his way of working the N.E.P.

Anonymous said...

Tony, ask the minister why the government is making a few hundreds bumiputra AP permit holders richer while the ordinary rakyat including poor bumiputras suffers from increase price of essential goods. Furthermore petrol price subsidy is being withdrawn, and is the BN government working for the rich car dealers.

bexe said...

I think we should just abolish the need to issue AP's.

Anonymous said...

The government announced that they will do away with the AP system by year 2011 I believe. Ask this in Parliament so that they will commit to it instead of this again becoming like the NEP (Never Ending Policy) which in fact does not benefit most Bumiputras except the UmnoPutras.

shky said...

One of the thing we should suggest is that if we want to remove the fuel subsidy (which I think is a good thing), the taxes on cars must go. The benefits for such approach will be as follows:

1. Promote market efficiency
2. Reduce the burden of consumers on car ownership.By removing the fuel subsidy and keeping the vehicle tax will be a double whammy for the public.
3. Reduce the risk of government forking out more $$$ for subsidising fuel in a rising fuel price environment

BUT BUT of course, this means AP is no longer valuable. We need to link fuel subsidy, vehicle tax and APs as one !

TP, call me if you want to discuss this further. I am sure u still have my mobile. :-)

Anonymous said...

If the government remain the AP situation as it is, what can the PR MP do? They only can ask questions, supplementary questions, protest, bank the table and bu... in the parlinment!
The only way is to change the government, let the PR execute what they have promised to rakyat...

Anonymous said...

Continue to push the Government to open up the AP's to any Malaysian for open tender. If Rm 1.1billion can be raised through this open tender the rakyat would certainly benefit from this exercise. Keep on pushing the Government.

Anonymous said...

Auction the APs...raise funds to subsidise the poor - lessen impact from the upcoming increase in fuel prices. Can do a "S'pore-COE" auction - raise hundreds of million annually.

But this is M'sia - sigh...

Anonymous said...

I concur with shky. Any subsidy system carries hidden costs and over time allows market distortions which ultimately defeats the purpose of the subsidy. The AP system permitted certain Umnoputras to gain tremendous private wealth at the expense of the motoring public, who are suckered again and again through various vehicle taxes and tolls. An AP is an evil we can live without.

Anonymous said...

Look these are standard answers that have been heard time and again. We need to get beyond these platitudes in debate.

The issue really is the instrument of AP effective and fair as an instrument to pick winners and losers in the auto instrument? The truth is government fails miserably and inevitably in picking winners and loser in almost any industry. And the AP usefullness in encouraging infant entreprenuers of bumis has long past expiry date. They benefit only rich bumis and totally unfair to bumis struggling for upward mobility..

Anonymous said...

Read the above, more comments on the AP matter

Anonymous said...

Hi YB Tony,

Your suggestion of open auction is one of better way to ensure more people enjoy the benefits and also able to improve ours national income, further more the AP is used to import expensive car for oversea.

But I think we should abolish AP totally, if government really interest to help those businessman really interest in automobile business, government should provide incentive and technical assistance to assist them, also opening more technical school to educate ours young to be interest in automobile.

Strong DAP supporter

NEIL said...

YB, Give all the AP to them,after all they cannot live long enough to enjoy the dirty money.Also these stupid guy need AP co's they can't do any other business,only option is to wait for handout.