A rich man’s budget, Poor To Get Poorer

While agreeing that the budget deficit must be reduced, Pakatan Rakyat leaders stressed it should not be at the expense of the people.

In their first reactions to the Goods and Service Tax (GST) as announced by Prime Minister Datuk Seri Najib Razak today, Pakatan leaders said the move would only burden the poor.

Opposition leader Datuk Seri Anwar Ibrahim said the GST would transfer burden to the masses.

“If you want to alleviate burden, there should be a coherent policy covering the whole spectrum.

“You talk about lowering tax for the rich, for investors, you talk about incentives and whatever special funds for companies but at the same time you impose a general tax on the larger population. There is paradox here and then you talk about rationalising the move?” he asked, when approached by reporters after the Budget speech at the Parliament today.

In his Budget 2014 speech this afternoon, Najib announced that the GST would be implemented starting April 1, 2015, at a rate of 6%. He also said the sales and service tax would be abolished.

Anwar pointed out that the government was at the same time reducing tax on the rich, which he said would widen the gap between the rich and poor.

“Our concern in this issue is the inequality and we will oppose endlessly the implementation of GST,” he added, and warned that the GST would further burden the public.

DAP’s Kluang MP Liew Chin Tong said the GST, alongside cuts in subsidies, would hurt the lower income group even more.

“I think the government has a very insulated or compartmentalised way of looking at the economy. They think these people have less money to spend, it’s OK we pay them some BR1M, but the economy is sustained by demand and is a cycle.

“It will affect demand and when overall demand is down, the result will be an economic downturn,” he said.

PKR deputy president Mohamed Azmin Ali lamented that the root problems of financial leakages, wastages and corruption had been ignored.

By not dealing with these problems, we are looking at a bottomless pit,” said Azmin.

“No amount of taxes collected will solve these problems.”

Azmin described the Budget as a “rich man’s budget”, saying the poor would get poorer due to the GST.

“For Malaysians, the cost of living is high enough without GST. With this tax now, a heavier burden is placed on the poor since they have little choice but to spend most of their disposable income,” he said.

He said the Budget’s emphasis on tourism and on vying with the world to have the best cities would not benefit the people.

“Where is the effort to bring down transportation costs or improve public transportation services? There is nothing on making homes more affordable. Health care has been neglected.

“Though the allocation is substantial, the problem again will be the distribution of the funds,” he said.

On the entrepreneurial fund through soft loans to ease unemployment among graduates, Azmin said it would lead to more debts.

“What these graduates need is greater soft skills and more training in vocational and technical areas to enhance their employability, not more debts.

“The proposal to fund SPM leavers for vocational training is good in principle but the follow through and the actual areas of specialisation is important,” said Azmin.

DAP secretary-general Lim Guan Eng was baffled that the budget did not have any new measures to combat corruption.

“Malaysia is labelled a champion in corruption by western media and Transparency International, why no new initiatives to curb corruption?

“We welcome more allocation for security, but we hope it is used properly. They should not lose guns and not have any accountability,” the Penang Chief Minister, who is also Bagan MP,  said.

Lim said there must be an increase in police personnel as their presence can stem the rise in crime.

Zairil Khir Johari, DAP’s Bukit Mertajam MP, said Najib appeared to be a “bad plumber”.

“Instead of plugging the leakages, he’s turning up the water pressure. Lots of funds announced for various projects but what are the checks to ensure they are spent prudently?

“For example Education sees an increase to RM54 billion, 21% of the budget. Consistently one of our biggest expenditure. But our results getting from bad to worse vis a vis international assessments and university rankings,” he said. – October 25, 2013.

Source : The Malaysian Insider