Wednesday, June 11, 2008

Subsidy Mentality 02

Points from YB Dato’ Shahrir Samad, Minister of KDNHEP, during a debate with YB Salahuddin Ayob, Kubang Kerian on RTM tonight:

Money saved from reduction of subsidy in 2006 was used up with rising costs due to increase in petrol price
  • Profit made by Petronas (not revenue) has been reinvested into assets around the world to ensure sustainability of fuel source for at least 1-2 decades
  • Money saved from subsidy reduction this year to be used to subsidize food
  • PM-in-waiting DSAI wants to lower fuel price by subsidizing, contradicting his stance against TDM’s policy to subsidize fuel during the 1997 financial crisis and wanting to oblige to IMF
  • We cannot continually deprive Petronas of growth by burdening it with subsidies, they have done their part by paying royalty and tax to the Federal Government

    My points:
  • Petronas must be allowed to use its resources as it finds fit to continually support our economy and be allowed to compete with the major oil companies, the likes of Exxon and Shell
  • The danger of this is that the royalty and income tax from Petronas constitute almost half of the revenue earned by the Government. We must be serious and committed to create a robust 2nd and 3rd engine of growth now before we run out of oil!
  • Alternative energies must be studied and researched thoroughly. Yes, these are not popular alternatives to fossil fuel due to economies of scale but does that mean we should just sit around and do nothing? The results of the research need to be shared with the public more often, as I know that numerous agencies are working on this. Nuclear perhaps (the most misunderstood and 'political' energy source)?
  • The network of LRT must be extended immediately. The National Physical Plan launched earlier in 2004 must be revisited and progress must reported.
  • The government needs to start thinking about decentralizing KL and develop a second satellite city, perhaps Seremban? This will enable people outside of KL to enjoy economic growth and stimulate job creations instead of just relying on subsidies. Also, the city plan must include massive integration of public transportation the likes of New York subway system, Singapore's MRT or London's tube. It is too challenging to integrate that in KL.
  • Taxi drivers must be allowed to charge more and especially during peak hours.

Then again, whatever the government does will be condemned. The construction of Twin Towers and F1 circuit were known to be wasteful, now they are deemed as icons of Malaysia. TDM was heavily criticized during his premiership, dubbed cruel and undemocratic. Now people 'miss' him being the PM. Can you ever win with the Malaysian people? No wonder we are far behind.


bats said...

we're thinking along the same lines here. transport, infra, town planning.

good point about not burdening petronas. the way i see it, they re-adjust their commitmments to the country and the CEO makes the decisions that are best for the company, not the gomen. can he do that? does our own gomen allow the CEO of our only fortune 500 company to operate like one? if our gomen don't allow for that, you and i might as well shut our traps.

this fuel price hike was inevitable, i think. in fact, i don't even know. but i've broken free of oil subsidy mentality. tak bole budget when it comes to cost of living... too artificial with subsidy in place.

but there's a lot of money coming from petronas. a lot. gomen have to be transparent, or we, as malaysians will not sit easy. where are all those billions going? why are we still shitting bricks? why still no LRT in subang? why everyday jam like mad? why politicians kids rolling in benzs and beamers? why? if they open the books, there are more than enough knowledgable malaysians to assure the rest of us if we're being conned or not.

transparent gomen... demokrasi. but how la wei? am i being too hasty with my suggestions here?

opcharlie said...

1. don't know details about how the CEO of Petronas operates but he is still answerable to PM under Petroleum Act 1974.
2. if you're interested to see where the billions are and will go to, refer to budget 2008. That's a detailed documents of how govt plans to spend the money.
3. The cost for LRT and public buses are subsidized. Education is subsidized including vernacular schools. There are a lot of subsidies going around, not just for petrol (which we still enjoy).
4. Traffic is an issue for all big cities in the world. Yes, they have better public transportation system but they still have traffic jam. Boston plans to do an underground road system whereby all pedestrians will be on surface and all cars will be underground by 2025. I think KL is too 'rojak' to add more infra. I think we need to decentralize and have another 'chicago' or 'los angeles'.
5. transparency is a matter of perception bro. A transparent govt doesnt mean that it doesnt have corruption or cronyism or lobby groups or 'fund raising', etc etc. I do admit that we have much to improve. We have our own political constraints. That needs to be worked out using the current system we have.
6. democracy is also a state of mind or perception. US claims to be democratic in their country but fails horribly internationally by unilaterally 'invading' iraq. is that democratic? same like the aussies. is that tax payers money well spent?