Tuesday, October 31, 2017

Najib’s toll freebie meant to entice Harapan supporters will only going to cost BN voters more

In Friday’s 2018 Budget speech, one of the big “goodies” that the Prime Minister announced was the abolishment of 4 tolls at Sg Rasau, Batu Tiga, Bukit Kayu Hitam and on the Eastern Dispersal Link (EDL).

On the surface, it looks like the Najib administration is hard pressed to replicate the Pakatan Harapan Alternative Budget which promised abolishing all highway tolls over time.

However, before Malaysians decides to rejoice, the first question that arises is how the government intends to compensate the existing toll concessionaires for their loss of revenue.

The Second Finance Minister, Datuk Johari Abdul Ghani very quickly burst the balloons by admitting that the government is looking at increasing the concession period for other tolls belonging to concessionaires as compensation.

This simply means that Malaysians will end paying toll fares for longer periods.

More specifically however, the tolls abolished were located in Selangor, a state which Dato’ Seri Najib Razak is only too eager to regain; and in Kedah as well as Johor, where BN is at the risk of losing with the twin threats of Tun Dr Mahathir Mohamad and Tan Sri Muhyiddin Yassin.

The 3 tolls at Sg Rasau, Batu Tiga and Bukit Kayu Hitam are owned by PLUS Malaysia Bhd. As a result, compensation for abolishing just three tolls will see the extension of its concession on any other highway under its management including the North-South Expressway, Seremban-Port Dickson Highway, Butterworth-Kulim Expressway, Malaysia-Singapore Second Link.

Very simply, the burden of the political move by Dato’ Seri Najib Razak to “free” the tolls in Selangor, Kedah and Johor will be “shared” by BN supporters in other parts of the country.  It appears to make a lot more sense to demonstrate support Pakatan Harapan because then, the BN government will actually show more love for you.

That however, isn’t the whole story.

The EDL is currently owned by MRCB, who just so happens is desperately looking to sell the loss-making highway.  MRCB also doesn’t own any other highway assets.

Hence the only way for the EDL toll to be abolished is for the Federal Government to fork out multi-billion ringgit compensation for MRCB.  Therefore, Dato’ Seri Najib Razak must come clean as to how much tax-payers must fork out to pay for the EDL and how the compensation is calculated.

The rakyat’s biggest fear is the Najib administration bailing out highway concessionaires, further proving that BN’s intrinsic economic policy is to “privatise profits and socialize losses”.

Monday, October 30, 2017

Minister of Finance confirms that EPF has not confirmed or approved any specific investments amounting to USD3 to 4 bil. in the US, contradicting the Prime Minister's boast to President Trump

The Prime Minister, Dato’ Seri Najib Razak went to the United States (US) last month and wasted no time impressing on President Donald Trump that he is out to boost the US economy.  He said “Number one, we want to help you in terms of strengthening the US economy.”

Among the most controversial and very specific promise by Dato’ Seri Najib was for the Malaysian Employees Provident Fund (EPF) to investment an additional “three to four billion dollars” to “support... infrastructure redevelopment in the United States.”

I had asked in my parliamentary question to the Minister of Finance whether the EPF has already specific projects amounting to “three to four billion dollars” to “support infrastructure redevelopment in the United States”.  I further asked, if yes, how much have been approved.

Tony Pua meminta Menteri Kewangan menyatakan sama ada jawatankuasa Kumpulan Wang Simpanan Pekerja (KWSP) telah meluluskan pelaburan sebanyak US$3 sehingga US$4 bilion bagi tujuan menyokong pembangunan semula infrastruktur di Amerika Syarikat.  Jika ada, apakah nilai pelaburan-pelaburan spesifik ini yang telah diluluskan.

In a relatively lengthy reply received from the Minister of Finance dated 25 October (attached), he effectively confirmed that EPF has made no such specific decision to invest “three to four billion dollars” to “support infrastructure redevelopment in the United States”.

The reply stated that every EPF investment is evaluated on a case by case basis on strict, disciplined and diligent criteria.

The reply did try to play down the Prime Minister’s promises to the American President by claiming that what he said was “consistent with the long term strategy of the EPF to increase its overseas investment, particularly in property and infrastructure”.  The Minister of Finance also tried to justify property and infratructure projects are relatively low-risk investment providing a relatively good rate of return.

However, my question has absolutely nothing to do with what forms of investment provides better or safer returns.  My question is specifically on whether EPF has already decided to make the specific US$3 billion, possibly up to US$4 billion of investment to “support… infrastructure redevelopment in the United States.”

Malaysians are relieved that the EPF will not be making any rash investments in the United States, more so inexplicably to “support… infrastructure redevelopment in the United States”.  It is not our job to “make America great again”.

We have no objections to EPF investment a proportion of its funds overseas, as long as the risks involved are properly mitigated and the investments are evaluated on strict and diligent criteria.

However, the above proved that our Prime Minister boasted empty promises to the American President.  The question then is, why did Dato’ Seri Najib Razak have to go out of his way to impress the Trump administration?

The answer appears to be obvious, from his stay the the Trump Hotel to his boasts at the White House, the Prime Minister pulled out all stops to curry favour the American President in order to hope that the United States government will go easy on the single largest anti-kleptocracy money laundering seizure in the country.

Friday, October 27, 2017

Despite 2 years after the implementation of the Goods and Services Tax, Budget 2018 projects increasing reliance on income taxes

Dato’ Seri Najib Razak proudly announced that the projected budget deficit for 2018 will be 2.8% compared to 3.0% expected for 2017.

However, this target is to be achieved not via more prudent spending but significantly higher government revenue collection.  As previously expressed by the Prime Minister, his administration has been “saved” by the implementation of the Goods & Services Tax (GST).

The GST is expected to contribute RM41.5 billion to the treasury coffers in 2017, and further increase to RM43.8 billion in 2018.  This compares against income from Sales and Services Tax (SST) last collected from Malaysians in 2014 which amounted to RM17.1 billion.

However, despite the massive increase in Government revenues resulting from the GST, there was no reprieve for individual and corporate income tax payers.  In fact, it has become increasingly painful for Malaysian income tax payers.

For individuals, income tax contributions increased by 4.7% from 2015 to 2016.  However, for this year (2017), individual income tax contributions will increase by a massive 9.2% to RM30.1 billion.  For 2018, individual income tax collection for the Government will increase by another 7.1% to RM32.2 billion. This is inspite of the proposed 2% decrease in income tax rates for taxable income up to RM70,000 per annum.

For corporate tax payers, the increase in burden isn’t any less. While corporate taxes dropped by 0.1% from 2015 to 2016, it is expected to increase by 6.6% to RM67.8 billion this year.  Next year, the increase is even more, at a projected 6.9% to RM72.5 billion.

The above increases in individual and corporate income taxes are disproportionately higher than the 4-5% economic growth rates for Malaysia.

The above lends credence to the widespread discontent against the Inland Revenue Board (LHDN) for their heavy-handed tactics in squeezing substantially higher tax contributions from individuals and businesses. Some have even termed LHDN’s tactics as “tax terrorism” by demanding, with hardly any room for negotiation, backdated taxes of up to 10 years.

The above Budget proved that the Najib administration has not seriously implemented policies to impose prudence in spending.  Instead, it is relying almost entirely on increasing taxes to balance its books instead of cutting wastage, eliminating corruption and reducing the cost of government.

As a whole, this is reflected in the significant increase in the Federal Government operating expenditure which is expected to increase by RM14.4 billion 6.5% to RM234.3 billion in 2018.  In contrast, the increase in only by RM9.7 billion or 4.6% in 2017; while in 2016, the operating expenditure actually reduced by 3.1%.

In addition, the operating expenditure as a proportion to total expenditure continued its increase to 83.6%, the highest in Malaysian budget history.

Dato’ Seri Najib Razak’s 2018 budget speech, like the year before, was littered with political sniping and peppered with a litany of election year goodies.  It contained no meaningful reforms in economic policies and institutions to end corruption and wastage.

The 2018 Budget only served to prove the widespread fears that as long as there are no such serious reforms in place, ordinary Malaysians will be forced to bear increasing higher tax contributions – whether it is via the GST, individual or corporate income taxes.

With outrageously creative accounting and a preposterous tax-payers’ bailout admitted by 1MDB itself, perhaps 1MDB will indeed be “on track to realise a profit”.

On Wednesday, I had accused the Prime Minister of peddling lies with the outrageous claim that 1MDB “is on track to realise a profit”, when 1MDB is nothing but a shell today laden with some RM40 billion of outstanding debt (including debts that have been assumed by the Ministry of Finance (MoF) over the past year).

1MDB tried vainly to defend the Prime Minister yesterday by spewing another set of half-truths and establish new standards of creative accounting.

I had, not for the first time, argued that 1MDB made some RM2.3 billion of losses from the sale of its acquired power plants to China General Nuclear Corporation.  And not for the first time, 1MDB tried to argue that 1MDB didn’t lose money because of dividends purportedly received from the energy subsidiaries.

Let me remind the CEO of 1MDB, Arul Kanda again - he had conceded to the Public Accounts Committee (PAC) that were the purported RM2.18b in dividends to be counted, he also needs to account for the huge RM3.5 billion in interest costs on the loan is taken to purchase those assets in the first place.

Only a half-baked CEO would tell his shareholders that he made money from the dividends, without taking into account the massive interest bill which was substantially higher than the purported dividends!

Worse, when I checked the financial statements of 1MDB’s energy subsidiaries, there was not a single year where they declared dividends to their 1MDB parent.  This meant that Arul Kanda cooked up the entire ‘dividend’ bullshit.

The Prime Minister himself declared that the proposed 1MDB rationalisation exercise practically ‘complete’ way back on 31 December 2015.  He said then, “it is therefore clear that 1MDB’s major challenges are now behind it as I promised they would be last summer.”

Except two years later, the plans are not only far from complete, they have completely unravelled.

As I’ve already highlighted previously, the RM7.41 billion deal to sell 60% of Bandar Malaysia which was the pillar of the 1MDB rationalisation exercise, has collapse spectacularly with no end in sight.

1MDB which had no ability to develop the massive property project had surrendered Bandar Malaysia back to the MoF, as proposed by the Public Accounts Committee (PAC).  And as 1MDB rightly pointed out, I was part of the committee which made the particular recommendation.

However, what PAC did not at any point in time recommend for the RM2.4 billion sukuk bond 1MDB borrowed for Bandar Malaysia to be also handed to MoF.  This is because the Auditor-General has confirmed that hardly a single sen from the above bond was actually spent for the purposes of the Bandar Malaysia project – a fact which was also conceded by Arul Kanda to the PAC.

Most shockingly however, as admitted explicitly for the first time by 1MDB in its statement to condemn me, was that 1MDB is expecting to “receive payments, over time” from MoF for the above debt-laden asset transfers.

In layman terms, it means that not only the tax-payers were forced to assume 1MDB’s debt, we bloody fools have to even pay 1MDB to assume these debts!

The above doesn’t yet include the fact that MoF has only recently in August, directly or indirectly bailed out 1MDB by making some US$600 million (RM2.5 billion) in settlement payments to Abu Dhabi’s IPIC.

Perhaps, I was wrong after all.  Despite being a shell laden with some RM40 billion of debts, Dato’ Seri Najib Razak was right to say that 1MDB “is on track to realise a profit” – with outrageously creative accounting and a preposterous tax-payers’ bailout.

Thursday, October 26, 2017

Dato’ Seri Najib Razak is clutching at straws arguing that the ringgit has performed well this year when it has barely recovered a fraction of its losses since 2013

Dato’ Seri Najib Razak wants Malaysians to believe that “the ringgit had performed better than the currencies of many other large commodity exporter countries, and forecasters had predicted that it will regain its strength”.

Is the Prime Minister trying to convince us that the 5.9% appreciation of the ringgit from RM4.49 to the dollar on 1 January 2017 to RM4.24 today is an achievement worthy of a standing ovation from Malaysians?

Does he need reminding that when he became the Prime Minister on 9 April 2009, the exchange rate was RM3.58 to the dollar or 18% higher than what it is today?  As a matter of fact, since the 2013 general election, the ringgit has tanked significantly on an annual basis.

In 2014, the ringgit slumped 6.3% from 3.281 on 1 January to 3.502 a dollar on 31 December.

The Prime Minister had then told us in January 2015 that the Ringgit will bounce back from the then five-year low versus the US dollar as “Malaysia's financial market is sufficiently robust”.  Believe it or not, the Ringgit was then trading at 3.50 to the Dollar, which now seemed like a parallel universe away.

Instead, in 2015, the ringgit collapsed 18.5% to 4.303 a dollar on 31 December.

Even then, despite continued re-assurance from the Government and Bank Negara that our currency was undervalued and unjustifiably depreciated for those 2 years, the ringgit tanked a further 9.6% in 2016.

If we had all trusted Dato’ Seri Najib Razak and invested based on his financial advice, some of us would be bordering on suicidal tendencies today.

The thing is, if every other currency had declined at the same rate against the Dollar, it wouldn’t have felt so bad.  What is particularly galling is that the Ringgit performance is the worst among all the major regional currencies over the past few years.  We have weakened significantly against the Hong Kong and Singapore dollar, the Thai baht, the Indonesian rupiah, the Chinese yuan and many more.  Hence the Prime Minister’s call for a celebration for a marginal improvement in the exchange rates this year is a serious case of clutching at straws.

It appears that everyone knows the real cause of the ringgit’s terrible performance except our clueless or pretend-to-be-clueless Prime Minister and his merry men. The fundamental cause is because of the complete collapse in confidence in our currency and economy ever since we have been outed as a major global kleptocracy and the failure of the Malaysian authorities and Government to take any action against those responsible.

The direct consequence of a badly depreciated ringgit is not only significantly higher travel cost overseas, it is the much higher cost of imports which translates into the highest inflation rates Malaysia is facing since the last global financial subprime crisis.

We cannot let Najib’s focus on the Ringgit’s short-term improvements distract us from the bigger picture. In order for the Ringgit to recover to RM3 to the dollar, the only way will be to rid the country of a kleptocratic administration and implement clean, transparent and competitive economic policies to bring back the confidence of local and foreign investors in Malaysia.

Wednesday, October 25, 2017

Dato’ Seri Najib Razak is the biggest purveyor of ‘fake news’ by singing 1MDB's praises in his blog but has no courage to debate the mother of all scandals in Parliament

On his blog yesterday, Najib gave us his economic vision for the country ahead of the 2018 Budget announcement on Friday.

However, the entire credibility of his “economic vision” collapsed with the outrageous claim that 1MDB has not only “brought the country good” but “is on track to realise a profit”.

1MDB is currently an empty shell, holding absolutely nothing but some RM40 billion of debts.  How in the world is 1MDB “on track to realise a profit”?!  If this is not a brazen attempt by the Prime Minister to create ‘fake news’, what is?

Dato’ Seri Najib argued that it was 1MDB which solved the lop-sided power purchase agreements attributed to the previous BN Prime Minister.

We are thankful that Dato’ Seri Najib finally admitted that those independent power producers (IPPs) were allowed to profit astronomically from the BN government of which he was part of before.  However, Malaysians are still clueless as to how 1MDB apparently “solved” the above injustice.

As far as we are concerned, Malaysians didn’t enjoy a single sen in benefit as electricity tariffs have only increased and not decreased since 1MDB started acquiring these IPPs.  Worse, the 1MDB’s RM12.1 billion-misadventure in the power sector resulted in multi-billion ringgit losses when it was forced to dispose of its entire energy interests to a China outfit for a mere RM9.3 billion.

Dato’ Seri Najib Razak further told Malaysians to laud 1MDB for its Corporate Social Responsibility (CSR) work including its sponsorship of hajj pilgrimages and scholarships purportedly amounting to RM690 million.

What the Prime Minister failed to tell Malaysians is that the so-called CSR is funded entirely with government-guaranteed debt amounting to more than RM40 billion.

More pertinently, while RM690 million of the debt may have found its way to CSR initiatives, US$732 million or approximately RM3 billion found its way from 1MDB to Dato’ Seri Najib Razak’s personal bank account in Ambank between 2011 to 2014.  The Prime Minister has to date failed to debunk this expose by the US Depart of Justice.

Najib must think Malaysians fools to believe in all his outrageous lies.

If the Prime Minister really thinks that 1MDB has been the saviour of Malaysia, then he should immediately lift the ban on sensitive 1MDB questions raised in the august House.  Instead, he should table a Ministerial Statement to ‘debunk’ all the so-called ‘lies’ by the members of the opposition and allow for a full debate on the 1MDB scandal.

However, if Dato’ Seri Najib Razak chooses not to be accountable in Parliament, then he will prove himself to be the most corrupt and cowardly Prime Minister in the history of Malaysia who relies on the BN-controlled mainstream media to propound his ‘fake news’.

Tuesday, October 24, 2017

The Speaker has gone bonkers in his over-zealousness to cover up the 1MDB mega-scandal, in this case a US$600 million (RM2.5 billion) emergency bailout of 1MDB by the Ministry of Finance in August 2017

The Parliament question time has become a complete joke.  During the last sitting, I had 5 questions rejected for asking questions with regards to 1MDB.  This round, I have 3, in part because I submitted less questions on 1MDB to avoid too many questions being thrown out.

However, the basis of rejecting the questions I had posed remained completely untenable.  For example, I had asked submitted the following question to be answered today:
Tony Pua meminta Menteri Kewangan menyatakan adakah 1MDB membayar lebih kurang US$600 juta kepada IPIC pada bulan Ogos 2017 melalui pengewangan (“monetisation”) ‘unit’ dana pelaburan 1MDB?  Adakah Kementerian Kewangan telah membantu membiayai bayaran tersebut secara langsung atau tidak langsung?
The question was whether 1MDB’s settlement to Abu Dhabi’s IPIC was funded through the monetisation of 1MDB investment ‘units’ and/or whether the Ministry of Finance (MOF) had helped support these payments either directly or indirectly.

However, I received a rejection letter from the Speaker claiming that the question could not be answered presumably because it would be subjudice as “the matter is in court”.  But the above payment which is part of an agreed settlement with IPIC has nothing to do with any court, whether in Malaysia or any where around the world.

I didn’t even ask about the ‘settlement’ itself.  I merely asked if the MOF helped 1MDB, directly or indirectly, with the US$600 million payment to IPIC which was made in the month of August.  Hence, how is this in any way related to any court case?

The Speaker should be reminded that in April this year, it was 1MDB itself who claimed that its payment obligations would be funded by the monetisation of investment ‘units’.

In August, 1MDB changed their tune and said that the payments were funded through the ‘proceeds of the on-going rationalisation programme’. What exactly is this rationalisation programme?

Is it not ridiculous that 1MDB can make all sorts of conflicting and vague statements to the public but Members of Parliament have no recourse to obtain any clarification or confirmations from the Ministers?

Both 1MDB and the MOF need to come clean about the source of these payments. If the Ministry is helping make these payments, surely the rakyat have a right to know.  In fact, the refusal to respond has only confirmed the suspicions that the MOF has indeed conducted an emergency RM2.5 billion bailout of 1MDB in August this year.

We very much regret that the purportedly independent Speaker’s Office is now helping 1MDB and MOF cover up questions on the scandal.  I will certainly raise this question again in my speech in this sitting and it will make a complete mockery of the Budget debate if the Finance Minister cannot tell us where our money has been used or spent.

Monday, October 23, 2017

The single biggest economic challenge which Dato’ Seri Najib Razak must address in the 2018 Budget is rising inflation

We will expect Dato’ Seri Najib Razak to wax lyrical about the higher that expected economic growth as reflected in the recent GDP figures. Bank Negara Malaysia (BNM) said given the strong growth in the first half of 2017 at 5.7%, the economy is expected to expand by more than 4.8% in 2017.

The question must be asked, if Malaysia’s economy is doing so well, why is it that ordinary Malaysians on the streets are feeling so pained?

The answer is obvious.  While the BN leaders sing praises of themselves over their supposed achievements, Malaysia’s inflation rate – which reflects the cost of living in the country, has been hitting record levels unseen since the global financial subprime crisis a decade ago.

Malaysia recorded an inflation of 4.3% year-on-year in September, the highest since March, mainly due to the rise in transportation costs and prices of food and non-alcoholic beverages.

According to the latest the consumer price index (CPI) released by the Statistics Department on Friday, transportation segment increased 15.8% on costlier fuel while the food and non-alcoholic drinks group rose 4.6%.

To put the above figures in context – despite GST’s implementation in April 2015 which resulted in a spike in inflation, the CPI had only increased to 2.1%.  In 2016, the inflation rate continued remained persistent at 2.1%.

Back then, the BN Ministers argued that the rising inflation was only a temporary “one-off”, and assured that the inflation rate will decline after a year or so after the implementation of the GST.  However, the CPI not only remained stubborn, it has accelerated to 4% year to date in 2017 demonstrating how wrong the BN administration have been.

In fact, Malaysia is currently suffering from negative real interest rates.  A survey of the local banks would show that they are only paying up to interests of 3.05% for 1-month fixed deposits.  If one keeps cash in a current or savings account as most Malaysians do, the gap would be even bigger.

This means our hard-earned savings kept in the banks are worth less tomorrow than they are worth today.

Hence not only Malaysians have gotten markedly poorer globally as a result of the massive depreciation of the ringgit over the past 4 years, our wealth is shrinking even in local ringgit terms.

Hence, the single biggest economic threat which must be addressed in the 2018 Budget to be announced on Friday this week is Malaysia’s inflation rate.  If Dato’ Seri Najib Razak decides to gloss over the issue by pulling the wool over the people’s eyes in an election year, the consequences for the people will be dire as Malaysians will be faced with even higher cost of living expenses in an environment of stagnant wages and rising unemployment, especially among youths.

Saturday, October 21, 2017

Why is the MCMC quick to the draw when the Prime Minister is ‘insulted’ on Facebook, but completely silent when tens of millions of private, and possibly confidential data have been stolen?

Lowyat.net reported on Thursday alledged that stolen personal data belonging to millions of Malaysia were up for sale publicly. However, instead of coming out with an investigation into the matter, the regulator MCMC demanded that Lowyat.net remove its report.

The the now ‘deleted’ report exposed that the data includes personal data sourced from various telecommunication providers, medical associations and housing loan providers. The data being sold was reportedly stolen between 2012 and 2015.   This data could include citizens’ private bank details, mobile phone numbers, addresses and emails. Clearly, the magnitude of this sale of Malaysians’ private data should be a cause for concern as it concerns.

Why is the first move by the authorities at MCMC to block the report?  Why is it that after 2 days, MCMC has yet to make any comment on the issue?  Is it because the public sale of stolen personal data also exposed how MCMC is utterly toothless in enforcing the Personal Data Protect Act passed in Parliament in 2010?

Or is the MCMC protecting all the 'big' players in the market from telecommunication companies to banks to government agencies from being charged for breaking the law, by failing to take adequate measures to protect the privacy of their customers' data?

The complete silence by MCMC contrasts against the series of lightning quick and harsh actions taken against individuals who were merely expressing their anger and frustration at the state of affairs in this country by hurling insults at the Prime Minister or the Government on Facebook or Twitter.

Many of these individuals have been investigated and charged under Section 233 of the Communications and Multimedia Act 1998 which provides for a maximum fine of RM50,000 or jail of not more than a year or both, if convicted.  In addition, MCMC wasted no time blocking access to multiple blogs and websites which have exposed scandals of the Prime Minister, such as Sarawak Report and The Malaysian Insider, whereby most, if not all, of the allegations have proven true

It would appear that MCMC treats itself as a political watch dog for Dato’ Seri Najib Razak and Barisan Nasional, instead of playing its role to protect the interest of ordinary Malaysians.

MCMC and the Ministry of Information and Communications need to provide Malaysians with an assurance that our private data online is being protected and breaches are investigated thoroughly. Perhaps, instead of political policing, it is time they focused on policing cyber threats and protecting Malaysians’ privacy.