RM60 Billion “stimulus” package: How the man-on-the-street will NOT feel it!

- relevant to P1, P5 and all Malaysians

1. On the outset, the government should be commended for doing something about the global recession crisis. The announced package is RM60 billion. However, it’s worth a closer look to see if it really benefits the rakyat, you and I.

2. Lets get to the details of RM60 billion. RM10billion allocated for investment fund over 2 years. From track record, Government Investment House – Khazanah, will continue pour good money over poorly managed GLC (Government Linked Companies) like Telekoms, Proton and Maybank who continue to make us squint at the failures such as overseas (costly) investment, selling out-dated car technology to us and extending risky loans that spikes NPL [Non Performing Loans], respectively. In effect a bail out of under-performing civil servants managing these GLCs.

3. That leaves RM50 billion. RM5billion are for guaranteed loans to SMEs provided (i) banks approve such loans in which in current credit crisis, laon approvals are very stringent, and here is the good part (ii) only if the borrower defaults will the government pays. So the incentive is extend to poor credit status SME (I can’t help it but think of politician cronies) and then government will use taxpayers’s fund to repay the bank.

4. That leaves RM45Billion. Another RM15 billion will be extended to Large companies. Who? Well take your pick, MAS, PLUS, Sime Darby, all of which at best only offers mediocre performance.

5. That leaves RM30billion. Spent RM7 Billion on mega project in which government said will be the likes of LCCT (though was announced the project was cancelled) or something equivalent. Never mind that we already have 2 major airports in Selangor, One military airport in Sg Besi (Kuala Lumpur) and disuse airport in Subang. Lets build another white elephant project. Who benefits? Well, newspaper said that Sime Darby is the front runner. But they will “Fund” the project. This means that the RM7Billion does not come from the government although they are too happy to claim it so.

6. That leaves RM23 billion. Another RM 5 billion will be for industry restructuring. Well, to restructure what? No details here except the name suggest, bail out some industries that are in trouble. Who, you might say? TENAGA (Electricity) will fit the condition nicely for they as the sole seller of power could still incur loss of over RM1Billion. Now, that requires some ‘restructuring’.

7. That leaves RM18billion. RM3 Billion for tax incentives where retrenched workers could get the 1st RM10,000 tax exempt instead of normal RM6,000. Each retrenched worker will have tax savings of RM640 per year. Hardly to shout about and provided the retrenched worker able to find another job in this global recession where jobs are obviously scarce.

8. That leaves a paltry RM15billion. Now I am a bit exhausted here, so won’t go into details. Just give the benefit of doubt, that the balance RM15billion is spent to directly benefit the rakyat, which is over 2 years, to a population of 29 million Malaysians. That works out to RM517 over 2 years which is an average of RM21.55 per month. A stimulus effect? I bet your pocket money is bigger ‘stimulus’.

9. Is all of the above enough? To quote former economics advisor Tun Daim Zainuddin, “The (global recession) crisis is a ‘moving target’ and we have yet to see the worst of it. Therefore, I don’t think that this mini-Budget is the single cure for the crisis.”

10. To clinch Tun Daim concluding chilly statement, “Nobody really knows the extent of this crisis. For example, many analysts believe that the US economic contraction has still a long way to go and has not reached the bottom yet...”

11. In my humble opinion, I have propose a stimulus package that invest and emphasise developing Human Resource talents, Telecommunication infrastructures, mega projects like bullet trains linking to Singapore, attracting soft skills talents to set up research based universities and liberalising lame ducks industries (cars, banks, air travel) to nudge them to achieve world-class level of competition. For more details, please visit the article in http://marcusong88.blogspot.com/2009/02/my-letter-to-prime-minister.html

What does this mean for you?
If the Government continues to drag its feet of “too late and too little” effect, we will all bear the consequences.

There is a solution! You ‘invest’ in yourself! Education which Empowers you, truly! I suggest then, don’t wait for handouts from the government for destiny is in your OWN hands. Be Masters of your own [good] fate. Happy studying!