Malaysian tax is not for public healthcare but public healthcare is for tax

I strongly believe that a democratically elected government has a moral responsibility to enable its citizens to live with dignity and comfort. In their time of desperation and need, there is no extortion imposed upon them and their love ones.

Health care is something that I believe, should not be privatized. A sick, weak and severely threatened person is in no position to negotiate.

Do consult all our religious teaching and conscience – is holding the sick, terrified and weak, and his or her loved one to ransom the right thing to do?

Let’s take KPJ Healthcare Berhad as a sample and examine the additional costs that we have to bear in privatized healthcare

In financial year ended 31 December 2010, it earned revenue of RM1.6 billion with a profit after tax of RM126million. Now that is a lot of extra cash for sick persons to dish out.

By letting the private profiteers/capitalists running the show, the following additional burden is imposed on the sick and needy:

1. Private doctors charge a lot (how many rich specialists stories you have heard) and the environment as such is that public hospitals are losing talents to the private sector (for a lot of other non-financial reasons too). Note 8 to the accounts revealed that in 2010 alone, RM438 million were paid to medical consultants.

2. Additional cost for running private companies: samples of unnecessary expenses include RM68.9mil rental of land and building, RM7.6 mil for advertising, RM2mil for directors’ remuneration and RM0.8 mil for auditors. (Refer to Note 8 again). No such necessity for public hospitals.

Mahathirnomics drove the medical cost up as well. Do you know that in October 1996, Faber Group, a hotel business was suddenly given a 15 year concession to provide cleaning services to 15 government hospitals and today, it has made enough money to publicly gloat about the huge amount of profit made as a result of having a monopoly of cleaning jobs that civil servants could have done at no profit at all.

3.    In the balance sheets of KPJ, total investments in shares of subsidiaries and associated companies were RM762.6 mil and RM307.4 mil respectively. These are mostly money spent on buying shares of companies and nothing to do with providing medical services.

The RM56.6 mil above was spent on buying shares of SMC Healthcare Sdn Bhd (RM51mil) and Sri Kota Refractive & Eye Centre Sdn Bhd (RM5.6 mil) so made some shareholders happy and leave patients to foot the cost of these acquisitions.
4.    Being a business conglomerate, it is normal to borrow money from banks to buy assets to operate the business, and also buy into other companies as mentioned above. Of course, the banks will charge interest which the business would build into their invoices to customers/patients. A public hospital would not need bank loans as tax money is interest free. The profit and loss accounts show interest expense of RM6 mil and RM14 mil for 2 years running.
5.    KPJ paid dividends of RM41mil and RM77 mil for 2010 and 2009 respectively. Would you like to pay for some dividend income to so rich entrepreneurs as you are suffering from pain and feeling extreme discomfort and vulnerable?

6.    We are suppose to pay taxes to the government so that we can get good public service in return, for example competent medical service. However, in privatized healthcare, we see a reversal whereby government tax is a “mark-up” on an already inflated medical bill.

7.    Retained profit means money earned and kept in the company not for public entitlement. In 2010, KPJ spent RM62mil of its retained profits as dividend (RM41mil) and bonus shares (RM21 mil) while RM393mil worth of accumulated profits is sitting in the consolidated balance sheet. (refer Note 35). So imagine paying RM393 million extra for people to sit on it, after paying off dividends.

It is most galling to find KPJ is owned by Johor Corporation, a government body! So it is a caring government charing private profits unto its citizen and levy tax on these charges. What a double whammy!
Incidentally, it excluded itself as a bumiputra shareholder but I will let it introduced itself:

 Johor Corporation (JCorp) is a market-driven Johor State Government-linked Corporation. It is to date one of Malaysia’s leading business conglomerates, comprising more than 280 member companies and employing more than 65,000 employees in Malaysia as well as regionally.
Alhamdulillah, the successful growth of the JCorp Group into a sizeable corporate entity that it is today has been fundamentally due to the energy and drive of hundreds of Intrapreneurs throughout the Group, all achieved without any promise of privatisation, stock options, or MBO. JCorp’s Intrapreneurs were energized and driven fundamentally by their higher pursuit for fully translating into reality JCorp’s Business Jihad ideals!

Personally, I have strong resentment against a market driven government who declare business jihad and profiteering on the sick and suffering it suppose to look after. I do not think Islam condone profiteering on someone who is sick, injured and in need.

1Malaysia, Rakyat Diutamakan indeed.


Tackling rising costs (HL)

by Sean Augustin

PUTRAJAYA: The government has introduced a new National Key Result Area (NKRA) to tackle the rising cost of living affecting the people, the prime minister said yesterday.


Yeah, right.

Proponents of capitalism might say those who refuse to pay can turn to public hospital instead but given the brain drain away from public hospitals and other well documented problems with Malaysian public hospitals, how many satisfactory alternatives Malaysians have and are they getting their tax money’s worth back?


  1. If you want to have excellent medical services then be prepared to pay out 40-50% of your pay as taxes.Are you game for it? If you want to pay little or no taxes then don't complain. It is the rich who pay lots of taxes and it is the rich who go to private hospitals thereby susidizing the poor. Private hospitals is a business and the bottom line for any business is to make money.Have they done anyhting unethical? Do not mix business with social issues.
    The problem here is enormous corruption in the govt. If that is eliminated , there is more than enough for everyone.

  2. Good points raised by the writer. We may not reach the state of US health care mess but we are following the same dangerous path with privatization of health care services and increase reliance on health insurances . Should the current mess of US health care system be a good reasons for our government to really look hard at the policy and direction of this issue?

    But then we may be too late because on the surface the government still keeping the hospitals but the suppliers in medicines and services ( cleaning as pointed out) are already "privatized" & pushing the cost of health care to sky high and eventually forcing the government hospital to be privatized like UH and/or pushing insurance premium higher.

    We may be paying higher "tax" in other forms without realizing it if we factor in the toll+high car prices + local security fees due to lousy police work + higher than normal prices due to monopoly of services + extra petrol due lousy transport system .... You can think for yourself for the others...

    The writer has point out clearly this so called private hospital is using public funds ( Johore Gov is the major shareholders)but running it without care of the public in mind and without public control and oversight.

  3. where do you go when you are sick? private or government hospital?

    private hospitals or clinics exist because there is are not forced to go to these entities since you always have a choice...

    but if you are not satisfied with your choice, channel your complaint to a right not blame other parties..

  4. So what is this Mr Wee suggesting:.. closing down KPJ and other private medical centre..?..or govt to take over these private centre, using taxpayer monies?

  5. If you want to save public healthcare in this need to change or even privatize its management...

    The government's management structure consists of doctors trying to manage admin, finance, HR, accounts, legal etc....doctors are not trained to do this...especially finance, credit control and auditing...and what of the consequences.....disaster!!!... with leakages in pharmaceuticals, consumables, doctors, nurses, attendants playing hookey, petrol being frittered off ambulances...the system is hopelessly corrupted...

    Like subcons in a building contract, by the time the 1 dollar reaches the patient, it is only 50 cents or even less, because money has been blown on inefficient hospitals, obsolete equipment mana ada duit lagi to treat patients...

    The government should just close the KKM, decentralize hospitals, put in independant managers and let the auditor general monitor them closely....otherwise, our government hospitals will remain what they are currently...a one way ticket to heaven or hell...

  6. To the commentators above, as a socialist at heart, I believe in not having private healthcare.

    Give healthcare workers good pay, administrative support, post retirement care so that they can focus on giving care.

    Yeah sure, cannot pay go away as some of you should say.

    Then again, illness do not discriminate the rich and the poor so why should humans impose this upon ourselves?

    In compassion there is no room for survival of the riches capitalism.

    We are too far down the path. To realise what I envisage, nationalise these hospitals, or improve the public healthcare system to wipe out competition from private sector, or corner private sector healthcare to boob jobs and nose jobs..not to save lifes.

    All citizens who are sick or threatened deserve first class public healthcare.

    My dream will cost less than the annual compensations paid to toll concessionaires and the useless submarines and the unnecessary Mig 29.

    Lee Wee Tak


    written by MaddieC, August 25, 2011 19:41:19

    Don't we all already know that private hospitals are like vampires sucking their patients' blood? Haven't we already heard enough horror stories of how private doctors kept on asking patients to opt for surgeries when they are not necessary, etc. just to fill up their pockets? Of course these private hospitals and their doctors will deny this. If so many people are complaining, there must be truth in it. Don't forget that the system you, private hospitals and doctors, have created now will be experienced later by your children, your grand children, etc. They may be the one suffering in future because they may not be rich or in the medical profession like you. You have really cursed your own future generation. As the saying goes, what goes round, will come round.
    written by Fart Fart Wah, August 25, 2011 12:58:15

    Our tax money is used to pay morons who issue frivolous fatwas, and those who raid churches and break down doors to see who is screwing who. They are also used to pay a 40,000 staff used for the PM and the rest of the 800,000 civil servants who do nothing much for the country..and on top of that are given half month salary or ex gratia payment for doing nothing for nothing. We had another moron running the country for 22 years and pushed his people to produce like rabbits to 70 million but never looked into building public hospitals. Per the requirement each state should have 5 public hospitals by now..One should send this bugger to the Klang Hospital incognito to the 3rd class wad..and he will die within 24 hours I guarantee it. Actually he had planned to privatize hospitals and put them under his son Morrkhzani but the public found out his dirty wheeling and dealing and now a Singaporean has bought over his shares. If he had been a visionary...we would by now have enough public hospitals for Malaysians and not promote more and more private hospitals..bloody fool!!!


  8. I concur with the writer and Anonymous 8/25/2011 10:22:00 PM. I believe society should uphold public welfare over private profits. Healthcare is one of the sector that should never be compromised to please the capitalists. Don't forget that the right to life is a right enshrined in the UNHDR.

    Its all a matter of priorities. Cuba, a poor country, has one of the best healthcare system in the world, and it is state run. Yes more taxes will be imposed, so what? I'm willing to pay more taxes to have the peace of mind that the person treating me is genuinely concerned for my health and not trying to find ways to rip me off.