Tanjong Pagar and subsidies

The past week has been an interesting one. Firstly Najib overruled Mahahir's objection to Daim Zainuddin's 1990 Point of Agreement with Lee Kuan Yew (and I wonder why the Dr did not shout at Najib the way he did when Badawi cancelled his bridge).

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http://en.wikipedia.org/wiki/Malaysia%E2%80%93Singapore_Points_of_Agreement_of_1990



Malaysia-Singapore Points of Agreement of 1990 (POA) is an agreement between two Southeast Asian countries on the issue of the future of railway land owned by the Malaysian government through Malayan Railways (Keretapi Tanah Melayu or KTM) in Singapore. This agreement has been an issue that makes relationship between the two countries less than warm. It was signed between former Prime Minister of Singapore Lee Kuan Yew and former Finance Minister of Malaysia Tun Daim Zanuddin on behalf of their respective countries on 27 November 1990.



The 1990 POA states that the KTM railway station would be moved either to Bukit Timah first, or directly to Kranji. In exchange, under the 1990 POA, three parcels of railway land — at Tanjong Pagar, Kranji, and Woodlands — would be jointly developed on a 60-40 basis with the Malaysian Government holding the larger share. However, three years later, Prime Minister Mahathir expressed his displeasure with the POA as it failed to include a piece of railway land in Bukit Timah for joint development.

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I just wonder how Daim felt after all his hard work came to nothing. And what made Najib reversed Mahathir's reaction to a signed agreement after 3 years. On the plus side, Mahathir's firm stand, and willingness to arrest the progress of a signed agreement, did give Malaysia some "holding gain".


Secondly, the decision on withdrawal of subsidy, which Idris Jala claimed to have cost the country RM73 billion and will bankrupt Malaysia in a few years.


I can't help but put together the 2 events and ponder:

1) BN administration claims that it needs to cut subsidy, and part of the subsidy highlighted was RM394million for toll compensation. (who agreed to this kind of stupid arrangement?) while at the same time, it was announced that


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Cheaper toll soon


http://www.malaysianmirror.com/nationaldetail/6-national/40849-tanjong-pagar-train-station-for-woodlands


Both leaders also announced that Malaysia and Singapore have agreed to reduce the toll charges for the Second Link to increase the road connectivity.

The toll charges at both sides of the Second Link, connecting Tuas here and Tanjung Kupang in Johor, would be reduced significantly, both the leaders said at a joint press conference after the retreat.

The new toll charges would be announced within a month.

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er....are the tax payers of Malaysia going to bear more compensation or subsidy as a result? Perhaps a Parliament question should be raised.


2) With regards to the proposed M-S Pte Ltd, I just wonder:


2.1 who will represent Malaysia as the 60% shareholder of this Joint Venture?

2.2 how is the capital for this joint venture be raised and how much Malaysia has to invest in?

Investing in Singapore is not cheap, given the exchange rate situation, and Malaysia's external borrowings is already at unprecedent high and will CIMB again be appointed as one of the arranger of syndicated financing?

How would this affect the actual expenditure vs the 2010 budget which hope to address the decade long deficits?

2.3 what is the expected return on this joint venture; if and how the return of this joint venture will flow through to Malaysians?

Looking at the trend established by privatisation, most Malaysians do not get any direct benefit from GLCs. Do Ali, Chong and Muthu get anything from Indah Water Konsortium, Pos Malaysia, Tenaga, Telekom apart from paid services and increasing tariff?


Let's see what our 40% partner has for their citizens:-

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http://www.mof.gov.sg/budget_2008/growth_dividends.html


Growth Dividends

Overview
All adult Singaporeans aged 21 and above will receive Growth Dividends as part of the Government’s move to share the nation’s surpluses with Singaporeans. Lower- and middle- income groups will receive more. Older Singaporeans will receive additional Growth Dividends. NSmen, ex–NSmen and NSFs (including those below the age of 21) will also receive an additional $100 of Growth Dividends to recognise their contributions to national security.

..............

Growth Dividends will benefit about 2.4 million Singaporeans and cost the Government $865 million.

--> about S$360 / RM836 per person
--> The phase "sharing the nation's surpluses with Singaporeans" a damn alien concept to us...but perhaps this will be a new propoganda term around Malaysia not before long?



http://www.guidemesingapore.com/singapore-immigration/c636-singapore-citizenship-benefits.htm


Baby Bonus Scheme
....... A cash gift of up to SGD 4000 for the first and second child and up to SGD 6000 for the third and fourth child is provided by the Government.

......Government contributions in the form of a dollar-to-dollar matching for the amount of savings you contribute to your child's Children Development Account (CDA). ....for your first and second child is up to a cap of SGD 6000 and up to SGD 12000 for the third and fourth child.

--> something like that Tawas Scheme going about in Selangor
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I personally feel that the terms of the joint venture agreement should be disclosed, debated and weighted in Parliament.

Malaysians have the right to know how our money is being spent; in addition, the annual financial results should be released to the public, just like any listed company or licensed financial institution

But I can almost hear someone telling me this should not be for public information due to either 1) sensitivity of the subject matter 2) necessary to keep "commercial terms" secret 3) for national security reasons blah blah blah ....

If there is so much necessity to keep things secretive then I rather stick with the existing Tanjong Pagar station with that newspaper stand selling Hooters and Maxim at S$11.90 per copy than to pay a lot for something that taxpayers are kept in the dark. Not another PKFTZ, Putrajaya, Matrade please or the country will go pokai.

On the subject matter of subsidy, I came across this great post by Dato Ariff Sabri

http://sakmongkol.blogspot.com/2010/05/cutting-subsidy-1.html

According to Dato's post:-

10 b went to debt servicing ^
10b went to subsidize the price of fuels.*
Pension payments 5.12b,
3,10b went to dividend payments (paid to who? if it's for PNB bond then Malaysians contribute a loan to the government hence can't be called subsidy)
2.3b went to MARA#
2 billion went to federal roads achieving minimum standards,
1.5b went to UITM#
1.38 billion went to human capital development
KLIA got 1 billion (why KLIA needs financial aid?)
906million went to makanan asrama (is there an open tender process?)
541m went to UPM#
515m to USM#
497m went to MU#
382m to UTM#
Toll subsidies- 394m

# about RM5.7 billion for the 6 universities and we get sliding international rankings, unemployable graduates and stifling environment where simple straight forward campus election can get "complicated"

^ Why blame and penalise the average Malaysians on the debts incurred by BN administration and what the hell the loans were taken for? Until now, no one can tell us.

*The Malaysian public is described as being addicted to cheap petrol that consumed hell lot of subsidy but then again these are the very same people forced to purchase cars at much higher than necessarily price and paying hire purchase interest on inflated prices to boot, no thanks to Mahathir's ego-boosting and horribly implemented Proton project, no less a national embarrassment as after decades of protectionism, has not delivered respectable value or quality in our own backyard.

And not forgetting the AP holders who until now, I struggle to suggest any constructive role they have played in making Malaysia a better place to live and play.

Remember when Pak Lah raised the petrol price to unprecedented RM2.80 per litre? Najib's answer was "change your lifestyle"; which brings my attention to this old issue featured in the Sun (Fri, 12 Dec 2008) :

http://www.thesundaily.com/articlePrint.cfm?id=28431

Two interesting disclosures were made during this week’s meeting. On Wednesday, the prime minister in his written reply to Liew Chin Tong (DAP-Bukit Bendera) said the government spends RM6 million a month on rental and maintenance on his official residence in Putrajaya. The money is paid to Putrajaya Holdings.

On Thursday, Foreign Minister Datuk Seri Syed Hamid Albar said the government owned about RM3.6 billion worth of properties overseas, mainly buildings housing the country’s foreign missions abroad.
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In order to fulfil his pledge to Utamakan Rakyat, Najib administration should consider selling off the properties and pay off the debts and reviewing if any outpost can be scrapped. Our money is better off being used to look after the urban poor in Kuala Lumpur or the much deprived in rural areas on both side of the South China Sea rather than some privilege civil servants in some exotic places so please review and cut the budget for foreign affairs.

The socialist democratic (not commie) in me understand that taxes and subsidy is an economic tool for re-distribution of income (I hope my tingkatan enam Ekon teacher, Puan Chokalingam, is reading this...I still remember what you said, cikgu) and I see nothing wrong when a rich dato businessman or a high earning professional paying their 20% to 27% and the money is used to share some of cost of living of the poor and all.

If the BN administration wants to remove the subsidy, fine, start with the following:

1) the IPPs;

2) the AP holders;

3) the government suppliers who got their contracts without going through proper open tender process;

4) the traitors who sold our subsidised petrol to foreigners;

5) civil servants who live well beyond their means;

6) that sad excuse for a car manufacturer who cling onto protective policies longer than all the soap drama series put together;

7) the rent seekers ... no prize for naming who they are...and I am just quoting from the NEM

After that, please review and if there are any wasteful, unnecessary project like advertisement on first lady, the space tourist, some nice advertisement about 1Malaysia, ad hoc by-election splurge a.k.a dead man ang pow etc.....

And then round up all department heads in civil service and tell them to cut the department budget by 10%, and it can be simple things. If the Penang state government can convert a deficit position to a surplus with sufficient reserve to give RM100 to warga emas then I am sure the BN administration with more than 50 years running a country can match that hardly 2 year old toddler.

Then and only then we talk about taking subsidy off the people who actually paid to subsidise themselves.