The term austerity is gaining currency in some Malaysian circles. The press and several brokers have mentioned it to describe what they think the Malaysian government is doing in light of various renegotiation or cancellation of megaprojects.

Austerity is a sexy term to pull in some eyeballs but really, I think the term has been used rather loosely to a point that it is inaccurate enough and starts to lose its meaning.

So what is austerity? How do we define austerity?

The first pass-definition should be an overall cut in absolute government spending. In other words, austerity happens when the government runs contractionary fiscal policy. A slowdown in government spending growth itself is insufficient to qualify as austerity. It has to be a cut in spending itself.

The refining factor to work with the first-pass definition is a significant tax hike that discourages spending and contributes to economic contraction. For those with knowledge in macroeconomics, I am thinking of a simple shift to the left in the IS curve in the IS-LM framework, which results in economic contraction.

Yet another refining definition is if these two contractionary policies – reduced government spending, higher tax or both – happen during a period of economic contraction. In tighter language, austerity is when fiscal policy works pro-cyclically during a downturn.

In Malaysia so far, that has not happened. Neither fiscal policy and the economy are in contractionary mode. Public data shows January-August government spending increased by 6.1% this year versus the same period last year. For the May-August period, government spending rose 1.1% YoY. From GDP perspective, public investment and spending rose in the first half of 2018 versus the first half of 2017. Meanwhile, the economy expanded 5.8% and 4.9% in both nominal and real terms in the first half of 2018 versus the same period last year.

And we must not forget, Malaysians received a significant tax cut in the form of 3-month tax holiday and the replacement of value-added consumption tax GST with the less burdensome production tax SST.

Meanwhile, the government has made public statements that Malaysia is not embarking on any austerity program, although it has committed itself to cleaning up its accounts due to years of off-budget abuses and opaque dealings.

Under this situation of continuing economic growth, public spending expansion and the absence of a tax hike, I think it is clear there is no austerity in place.

The truth is, many of the renegotiation and cancellation do not lead to absolute cuts. Rather, the changes are there to make way for other spending that are aimed to be more productive than, for instance, merely servicing overpriced debt for financially and economically unsustainable megaprojects negotiated incompetently by the previous corrupt government.

What is happening is a reallocation of resources. Not absolute cuts. Definitely not austerity.

Critics rushed to assign the new Pakatan Harapan government grades for its 100-day performance. MCA had the cheek to give the government a D grade. Others gave a B. If Pakatan Harapan had its own Pemandu, I am certain grade A+++ would have been announced in a pompous self-congratulatory parade.

I am unsure what grade I would give the government because of the subjective nature of the whole business. One could make it more objective by having a sheet tallying the weighted score, but I just won’t do that. Looking at my desk, I have many other things to do.

As I take a breather, all I can say is that I have my share of disappointment. Government action with respect to the recent child marriage case has been so underwhelming that I feel it is best for me not to think of it. Meanwhile, the official attitude taken against the LGBT community is not something I could defend. There are other problematic decisions, but all that points to the fact change does not happen overnight. It takes time, especially when it comes to culture.

In a democracy, changing the government alone is not enough. What is required is a change in the attitude of the people. At this moment, we need a leader who can make that happen without worrying too much about his or her approval ratings. But as I have been told, that is easy for me to say because I do not have to face the voters.

Yet, all those disappointments do not at all make me regret for doing what I did on May 9. In the days after it became clear there would be a Pakatan Harapan government, I think I understood early on how difficult it would be for change to happen and disappointment was something to be expected. Larger change needs time to happen.

And at the end of the day, before we rush to judge this government on its 101st day, I think it would be good to remind ourselves that at the very least, this government has a 5-year mandate. I would reserve my judgment until close to the end of that mandate.

This however does not mean the government should be free of criticism. Criticism is important to remind this government what is important, and to me, the most important agenda is the promised institutional reforms that will make sure the likelihood of past abuses repeating itself is low. The rest of the promises are secondary.

If we managed to set our institutions straight, then we would have a great foundation to build on in years to come beyond the 5-year period, regardless whichever side may come to power later. For me, that will be the true test of this Pakatan Harapan government.

I have been extremely busy and I have just realized the last time I updated this blog was just slightly more than 3 months ago.

I still want to keep this going, except this time, no real commentary. But the second quarter was quite a quarter, externally and especially domestically. These events had added significant short-term uncertainty that might have affected growth.

How fast do you think did the Malaysian economy expand in 2Q18 from a year ago?

  • Below 3% (8%, 1 Votes)
  • 3.0%-3.9% (8%, 1 Votes)
  • 4.0%-4.5% (23%, 3 Votes)
  • 4.6%-5.0% (38%, 5 Votes)
  • 5.1%-5.5% (15%, 2 Votes)
  • 5.6%-6.0% (8%, 1 Votes)
  • More than 6.0% (0%, 0 Votes)

Total Voters: 13

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We have the right to celebrate May 9. It is after all the first time in Malaysian history change at the very top happened. For years we were only chipping at the edge. Progress felt irrelevant. But now, here it is. Change.

Yet, not all or even most of the changes Malaysia needs have been instituted. It will take time and work for these changes to happen. There will be residual resistance to change and perhaps using the adjective residual understates the problem at hand. After more than six decades of Perikatan/Barisan Nasional in power – seven decades if you go all the way to the first Malayan general election in 1955 – there is a kind of deep state the new Pakatan Harapan government will need to win over and even fight.

There will be disappointments, and Pakatan supporters and sympathizers will accuse the new government of betrayal and hypocrisy.

But before any of us levels those accusations, we must understand that the government will have to pick their battles. Some will be won. Some will be lost. Pakatan and their supporters will need to be smart in which battles they want to win.

More importantly, before throwing those accusations in the future, we need to understand the long arc of history all of us have to deal with. Malaysia’s deep multifaceted history – with dimensions of race, religion, Peninsula-Borneo, federal-states, urban-rural, national origins, class, gender, etc – is the proper context to judge the new government in the next few years. No action could be judged in isolation.

And the future is just as important as the past in understanding this new Malaysia and the new government.

Our demography and culture are changing at glacial pace. It is slow but the inertia is massive: our society is set to become less diverse in a meaningful way. By 2050 the Bumiputras will form 70% of total population from about 60% in 2014. So would be the Muslims. The Malay population share will rise to 60% from 50% in the same period.

At the same time, we will be an aged society by 2050, from our low median age of 28-29 years old and low dependency ratio.

I fear the two demographic shifts could make our society less open and less progressive in our values. It is not the Malays and the Muslims per se that I fear. It is the increasingly monolithic nature of our society, and hence, the possible intolerance of differences. I fear that future where the Malaysian mind would narrow to a point that leaving is the only reasonable option for too many people.

This is the reason why the 2018 election was the last chance to change in time. The trends are pushing against us, especially against the liberals. It is not simply an election rhetoric. It is a real long-term concern about the fate of Malaysia. This is why I feel spoiling your votes or not voting is unwise: the advocates of the tactics (who wanted some kind of change) are ignorant of history and blind to demographic changes.

It was also the last chance to change because substantive changes that Malaysia needs could not be made by the same side that benefited from the closing of the Malaysian mind. Najib Razak tried it in 2009-2013 and he failed. All his attempts were in the end reduced to mere silo economic targets that stood alone outside of multifaceted Malaysian contexts, making them utterly dissatisfying as a vision. So dissatisfying that we had to go back to the 1990s to move forward.

And substantive change will need more support from Malaysians. While the Pakatan victory is the first step, we have to remember Pakatan won only plurality in popular votes, not majority. Lasting change would require Pakatan to get more Malaysians on board.

Puji dan syukur pada Ilahi
Anugerahnya tiada terhingga
Kedamaian kemakmuran
Malaysiaku bahagia

Dengan tekad untuk berjaya
Berbakti pada nusa dan bangsa
Kami junjung cita-cita luhur
Perpaduan seluruh negeri

Seia sekata sehati sejiwa
Menghadapi cabaran
Kami sedia kami setia
Berkorban untuk negara

Bersemarak Malaysia tercinta
Kibarkan panji kebesarannya
Kami rela menjaga namamu
Sejahtera Malaysia

Bendera berkibar di angkasa
Lambang negara jaya
Rakyat sepakat sehati sejiwa
Dengan berbakti dengan megah

Hadapi cabaran masa muka
Penuh tenaga murni
Bakti dicurah sehara-sehala
Dengan wawasan yang suci

Wawasan meningkat kemajuan
Tiada lagi kepincangan
Kemewahan rasa-dirasai
Bersama kita nikmati

Wawasan 2020
Satu pandangan jauh
Bukan impian malah kenyataan
Bersama kita jayakan

I take pride in knowing my streets and its history. When I drive in the city, I generally go around without any navigation aid. When I am in a rideshare vehicle,  I sometimes override the driver who is totally reliant on his or her not-so-smart smartphone. “No, no, no… please turn left instead. I know a better route.”

But yesterday was one of those little humbling moments. I have never had any reason to visit Pandan before. But Mahathir was speaking there last night. I wanted to see and feel how it was like to be in such a crowd during the campaigning week. I am in some ways a protest junkie. I enjoy witnessing people converging for political purposes. In order to not get lost in Pandan in the dark, I needed direction.

Kuala Lumpur was wet last night. It drizzled but that did not stop any political event. Mahathir, Muhyiddin, Wan Azizah and the local candidate spoke. Mat Sabu arrived later close to midnight, having to crisscross the city to speak at multiple venues. Earlier in Bangsar where I was, a loud multiracial crowd had their colorful umbrellas opened against the orange streetlight. A stranger shared her umbrella with me by the road. Even the poorly attended Umno rally filled with demotivated bored men (no women) talking something about the NEP went on.

Both Pandan and Keramat along with the more famous Kampung Baru are in the same parliamentary district of Titiwangsa, where I have been voting since 2008. The Pandan local economy is more integrated with the one in Pudu, which means it should have been part of the Cheras seat within the geographical context of Kuala Lumpur. But the electoral map in Malaysia is contorted to take into account other considerations to benefit the ruling party in an unfair fight, not so much what makes sense on the ground.

Pandan is an urban Malay kampong in the same way Kampung Baru and Datuk Keramat are. Tall buildings rise outside Pandan. The Exchange 106 in the new business district that symbolizes the corruption 1MDB stands tall close by, making it impossible for local residents to miss it. While trying to keep rallygoers occupied, somebody on the stage pointed out that if the trees were removed, we all could see the Towers from here. This is a complete contrast to the experience of the other two kampongs: the Petronas Towers loom large while the ugly menacing Barad-dûr-like monolith glass tower is far on the horizon.

The candidacy of Mahathir for prime minister is about attracting Malay votes away from Umno and Barisan Nasional. Mahathir was there within a collection of Pandan low-cost flats to tell the Malays there that it was okay to vote for change. Mahathir has been telling all Malays to make cultural and economic change for ages, but it is only in the past two or three years that he has developed the courage and the appetite for political change.

I had expected a largely Malay crowd. I was wrong. Instead the crowd was quite multiracial, almost as diverse as the one in Bangsar except bigger. The Chinese of Pudu and Cheras must have come here to listen to Mahathir together with the locals. I myself, who is now living on the other side of the city, took a 45-minute drive to get to Pandan to listen to Mahathir. It would be a shorter ride from Pudu.

But I wonder…

I have this theory that it was really only in the 1990s that we had something that we called Malaysia. It is not Malaysia per se, but an idea of Malaysianness as the primary identity. It is the Malaysian nation, the bangsa Malaysia. It is something I have been writing for the past two years and hoping to finish in the next two.

But in short, before or after the 1990s, there was none of that sort. Bangsa Malaysia has always been unnatural to Malaysia. Malaysia is not a nation-state from the very beginning. The nations that exist in Malaysia in the modern post-1963 sense of the word, are not Malaysians, but Malays, Chinese, Indians, and many others. British colonialism has made this land diverse in a spectacular way, both as a blessing and a curse.

The Malays before the 1970s, and even before Malaya became part of Malaysia, felt economically marginalized compared to other communities. So marginalized were the Malays that they refused to be called Malayans despite Malaya was named after them. To them, the Malayans were the others, the Chinese, the Indians, the Eurasians, the immigrants.

When Malaysia was established, the Malay identity did not go away because the economic marginalization did not disappear. Merdeka and Malaysia were largely a political change. It was less an economic one. That made the Malays disillusioned, and angry at Tunku Abdul Rahman.

And the others, the Chinese especially, after 1969 racial riots felt they were politically marginalized. The government in response to the riots became very interventionist and began to integrate the Malays into the modern economy better. The New Economic Policy sought to redress economic imbalance that existed between ethnic groups.

It was a redistributionist policy: there were winners and there were losers. The winners would call it justice and the losers injustice. In the meantime while pushing Malayness as the foremost Malaysian identity, topics regarding Chinese schools and language were fiercely fought at the parliament. The assimilation policy was pursued doggedly by the government led by the Malays, and the Chinese were deeply bitter about it. Some, even up to these days.

The twin-marginalization — it does not matter whether it was an actual marginalization as what is important is what the group itself feels — discouraged the creation of a bigger nation that goes beyond ethnicities. The marginalization strengthened group consciousness and identity. Unity across races was impossible, unless you were of a certain class.

And then came the 1990s, that decade of great economic growth. The 1990s and the 1980s were a period of Malaysia’s own industrial revolution.

The Malays began to feel less marginalized economically. With less marginalization, came confidence for political concessions: for instance, Mahathir unbanned the lion dance in the 1980s. The Chinese meanwhile starting to feel less of the redistributionist policy because economic growth made the pie bigger for almost every group. Mahathir himself liberalized the NEP to enable rapid industrialization through exports-driven model.

Economic growth lessened the marginalization each group felt, allowing all to come together as one. The Malays felt they were Malaysians, the other felt they were Malaysians too. There was, perhaps, for the first time, a Malaysian nation. The song Saya Anak Malaysia finally meant something.

But that nascent Malaysianness fell apart in the late 1990s. The political and economic crises Malaysia experienced beginning 1997 undid the progress for bangsa Malaysia. The regression was partly Mahathir’s doing.

I am still trying to understand, prove and explain many factors relating to this. But I wonder, were the non-Malays coming to listen to Mahathir, to support him, in the middle of a very Malay Pandan was looking back, longing for that decade of bangsa Malaysia?

Later in the night, when everybody was exhausted, tired of standing for more than two hours, the organizer played a video of Mahathir explaining why he was doing what he was doing. Mahathir claimed he did wrongs and he wanted to right those wrongs. He had very little time left.

I spotted an old Chinese couple nearby me. Their eyes were fixed on the screen. I thought I spotted tears on their cheeks.

I consider myself lucky. I have gotten enough education opportunities to ride on the benefits of globalization and technological changes. So big are the benefits I have reaped that I think I could travel around the world tomorrow if I wanted to without worrying too much about my financial obligations back home. If I lost my job somehow, I could afford to enjoy my unemployment as a short holiday and more importantly, I could get another good job in Malaysia or elsewhere with the skills, the connection and qualification I have. My social capital and wealth are great enough to tide me through such difficulties.

But the same modernization can be unkind to others. Not everybody benefits from such changes. Some are unequipped to ride the waves with the same education paths available to me. Worse, the wave could smash and sink whatever raft they are on. That fact sometimes makes me feel guilty of living the life I live now.

The last time that guilt hit me hard was when I found myself on the side of the Irrawaddy in Mandalay several years back. I remember walking by a shanty town where homes were haphazardly built along the river, with no access to clean water. There was no sanitation. The people lived in wooden homes on stilts with pigsty below. Trash of various kinds could be found everywhere and some children no older than ten would play happily among flies, fleas and maggots, contend with their small world simply for not knowing any better. I have seen how poverty looks like before but the kind in that Mandalay village is by far the worst kind I have ever witnessed.

I felt guilty just for being luckier than them, just for doing much, much better than them economically.

That feeling re-emerged recently as I travelled through southern Thailand for work. The Deep South as the Thais call it is a Malay heartland, just as how northern Malaysia is. The people on both sides of the border, more so on the east coast, have cultural ties restricted by the logic of modern states.

Somewhere by the beach in northern Narathiwat, the province that borders Kelantan to the south and Pattani to the north, is a village called Naim. There is a traditional Malay boatmaker aged in his 50s working hard to meet his orders. The only additional hands he gets are his son’s aged 20.

Ten or twenty years ago, he claims there were about 20 boatmakers on the same beach. Today, he and his son are the only ones left. So few are the traditional builders throughout southern Thailand that he is busy for the next four years meeting whatever demand that exists. It takes about four months to finish a boat, and by that account, he should have 12 boats to build.

The traditional boats he produces are magnificent. Made out of wood, they are 20-30 meters long. He uses modern tools to saw off wooden plank, before shaping and carving them. During my visit to his workshop, he and his son were working on the bottom most part of the boat, which had holes drilled into the sides and wooden studs jutting out of it.


The final stage of boatmaking involves painting the boat in bright contrasting colors, making the intricate pattern drawn on its body impossible to miss on land and in the sea. I would later visit Pattani located farther north and I found similar boats floating on the river that cuts through the city. An former MP for Narathiwat told me even the painters are a dying breed.

The modern economy has made traditional boat building an unlucrative business. It takes about BHT300,000 to make a boat, with the labor share of the cost being very small. Obtaining capital to finance the boat is also very difficult and the boatmaker complained nobody has helped him to keep the trade alive.

He also told me nobody wanted to become an apprentice anymore because of great sacrifices required. Apprentices are usually, or more accurately were, taken in young. Doing so today would mean missing out school days and missing out school would mean limiting one’s economic opportunity to escape poverty and rise up the social ladder. And the people in the village are largely poor living in their wooden homes and riding their motorcycles. Many live in wooden shacks in fact that could be mistaken as having been abandoned. One could get modern education and try to integrate with the modern changing economy, or risk one’s life making traditional boat for local fishermen, who themselves likely unable to compete with larger boats with deep sea capability, at a time when fishing stock is depleting regionally.

Boat building is a heritage of this part of the world. And he and his son are among the last of Narathiwat boatmakers. They are the last of traditional boatmakers on Banton beach.

And the same economic setup I am benefiting is killing that beautiful boatmaking culture. The importance of modern education is taking labor away from this trade, a trade that is a public good.

So, how would I rate Pakatan Harapan’s massive manifesto for the 2018 general election?

I generally agree with the conclusion reached by the people at the Institute for Democracy and Economic Affairs. Pakatan’s institutional reform agenda is impressive, and it satisfies my demand enough. But its economic proposals are difficult to stomach wholly.

Pakatan’s economic side may suffer from credibility crisis because the coalition has multiple big pushes that will affect government revenue negatively (namely GST abolition, income tax reduction, greater sharing of petroleum royalty with the states, sharing of income tax with the states) while committing to big expenditure plans (free tertiary education, the return of fuel subsidy albeit more targeted and highway concession takeover). This will strain government finances. Pakatan should be prepared to put a cost on these measures and cite the potential sources of financing for these policies. These are big changes that will take time to carry out. It can work, but with very careful planning. A very gradual sequencing could be very important.

But I believe at this stage Malaysia needs institutional reforms more than yet another boost in our short-term growth. Stability is important, but at the same time long-run prosperity will depend on our institutions and our social capital, without which our economic achievement might be short lived. Sometimes we need to slow down and reassess what we have. In this flawed democracy that we have, perhaps populism has to be engaged first before the reforms could be made.

You need to win the election first. That is the ultimate objective, as obvious as it sounds. The manifesto has to be taken as a whole. And so, weighing the two, I will give the manifesto a thumb up.

I have a wishlist. I am naturally disappointed some of them are not taken up, but also happy that some others are included in the manifesto. This is a democracy. Some compromises are inevitable however disappointing and discouraging.

Another thing, while we judge parties by their promises and their ability to fulfill it, we also have to take into account things they do not mention and will not do. I think a lot of people out there do not quite realize the importance of which sides would not do what. Too many are focused on what political parties explicitly said they would do. What they would not do could be just as important as what they would do.

Here, I try to assess all the manifesto points made by Pakatan. Before we go there, I would like to apologize for any typo and grammatical problems. The manifesto is very, very long and hard to read. It took me two days to properly finish it. Once I got to the end, I had lost all interest in editing this post.

I will say this. The document needs a bit formatting. It is too massive to be easily read. I take the size of the document as a sign of growing maturity of the two-party system in Malaysia, as well as the complexity of working with too many people. After all, this is an actual organization of diverse people, not a hashtag.

Well then, let us get on with business. There are five main pillars:

  1. Reducing living costs
  2. Institutional reforms
  3. Exciting economic growth with fair distribution
  4. Returning powers to Sabah and Sarawak
  5. Buillding an inclusive and moderate Malaysia

There are other minor sections, but I will skip that.

So, knock yourself out.

Mohd Hafiz Noor Shams. Some rights reservedMohd Hafiz Noor Shams. Some rights reservedMohd Hafiz Noor Shams. Some rights reserved

Core 1: Reducing living costs Summary: I feel a large part of this section is difficult to swallow whole. Abolishing GST and reintroducing fuel subsidies are a step backward. Meanwhile, I feel measures on PTPTN needs more thinking, although there is no easy solution to it; the current model does not work well. Nevertheless, there are some good points here and I like the anti-monopoly position taken. There is also a nod to renting as a solution, a good counter to the madness of homeownership culture.

  1. Abolish the GST. I oppose and my reasoning is here. There is a better way to do this.
  2. Reduce inflation. It is difficult to give a yes-no answer here.
    • I like the anti-monopoly position taken. I would have vested greater power and independence into the Competition Commission, while promising to expand its resources.
    • I like the excise duties reduction for low-powered cars. But on cars, such policy must come together with fuel tax to address usage.
    • I am of two minds about the abolition of tolled highways. By default, I oppose it because I believe in pay-as-you-go approach to limit usage costs to actual users. But the issue is complex. Some abolition might be cheaper for everybody (in positive externality sense) because the political pressure to keep toll charges unchanged and the subsequent compensation that must be paid to private operators might be more expensive than an outright takeover by the government. Furthermore, as far as Kuala Lumpur (and Penang as well?) is concerned, I would not mind if such takeover functions as a precursor to a systematic congestion charge system, like in Singapore.
    • The implicit reliance of price control tools is a downer, but that is nothing different from what is happening right now.
    • On the ringgit, all I can say, politely, leave it to the central bank. The executive branch of government should have limited say in on this matter and the independence of the central bank must be guarded so jealously.
  3. Share the wealth. This is another point where it is not so clear-cut.
    • Continuation and more importantly, the depoliticization of the cash transfer program BR1M is a plus. I would have added a rule-based program, rather than continue with the discretionary method used today. A rule-based program with automatic transfer, in my opinion, is the best depoliticization tool around. The manifesto is silent on the exact method to achieve depoliticization.
    • Establishing universal safety net is admirable, but it may require more hashing out. Malaysia has a fragmented system that needs to be merged systematically. I have a feeling BN will come out with a more sophisticated version of this promise, especially because they have access to the relevant professionals and experts by virtue of being the government of the day. I know several programs the BN government plans to roll out in the long term and they are generally good.
    • Streamline and centralize welfare data. This is good for efficiency and as part of the safety net system.
    • I think I can support reallocating more petroleum royalties to the states. I think this is probably better than what Sarawak, Najib and Barisan Nasional are doing with Petros and related matters. Nevertheless, I wonder if this is the best way, given Pakatan’s other set of promises.
  4. Introduce affordable homes and rent-to-own scheme. I generally support this.
    • I support rent-to-own scheme, as a way to steer current homeownership culture to a more sustainable system.
    • I support anti-monopoly measures on land by putting a limit how long a developer can own an undeveloped land. But I fear, this might not be enough, because the state themselves make money by selling land to fill up its own coffer. This goes back to the separate issue of state revenue.
    • I oppose incentives given to small developers. My support for anti-monopoly measures does not translate into giving out business goodies to the small guys.
    • I support developing Islamic grant land (waqaf) as new residential areas. A digression: these waqaf lands most of times are unproductive and untaxable. More effort should be done to make them productive, while discouraging the creation of new waqaf. In fact, I would support the taxation of waqaf land, with the exception of very few cases. I would also slap all waqaf land with a 99 years tenure, which later must be returned to the state, which its status converted automatically to conventional land, except when the state agrees otherwise.
    • Proposal to redo PR1MA is unclear.
    • I support the creation of a master housing authority to streamline and absorb all housing government bodies so that we can have a more consistent approach/policy.
  5. Reduce living costs for the youth. 
    • I am undecided about delay in PTPTN repayment. There are 3 specific suggestions deserving attention:
      • Pakatan wants a program where borrowers would only pay back once their gross income hits RM4,000 per month. I think this good for the borrowers (financial problems faced by young graduates is a problem) but I am a bit concerned with the sustainability of PTPTN. The fund, even right now, appears unsustainable and this would force PTPTN to finance their long-term assets with more short-term liability (it is already doing so). The interest differential under this suggestion would exacerbate PTPTN current problem. PTPTN currently is unsustainable without massive government support and I do not see Pakatan (or BN for that matter) addressing this problem, which could turn into a monster. I see a gargantuan bailout, regardless who is the government of the day, sometime in the future. The sooner we solve this, the better.
      • Discount or debt forgiveness for high-achievers. Disagree, because this group of people are the ones most able to pay back their loans. If they get discount, that means PTPTN would have an extremely high ratio of bad borrowers in their books. Sounds like a bad business model made worse. But I understand PTPTN is not a business, but again, its sustainability is a problem and giving out discount exacerbates it. It might be better double down on it by gradually do a debt forgiveness or even heavy discounting for all with a view to close the fund down, rather than exacerbate the unsustainablility of PTPTN. This will be extremely expensive one way or another.
      • Incentive for employers that somehow help their employees payback their PTPTN loans. I am unclear about this to have an informed opinion.
    • Marriage incentives. I am ambivalent. I prefer baby bonus.
    • Job creation promise. I do not see details.
    • A cross-Asean labor mobility program for young graduate. As a regionalist, I support this.
    • Reduction in internet cost. I support and this will go back to controlling monopoly. I am looking at you Telekom.
  6. Abolishing tolled roads. This an expansion to the same point above but, explained in greater details. It says Pakatan would reassess all concession agreements, and on case-by-case basis, end toll collection. Put it this way, I might be more agreeable to such takeover.
  7. Introduce targeted fuel subsidy. I oppose. Expensive in cost. Expensive in implementation. I have been opposing fuel subsidy for the longest time, and I have been pro-cash transfer as a replacement of such subsidy since at least 2010. We should improve on the cash transfer instead of returning back to an inefficient policy. Pakatan wants to use better identification technology to design a targeted subsidy regime, but economically, cash transfer is more efficient in the sense that it is cheaper and more welfare enhancing. You can increase the cash size for poorer folks. I do not mind that. Just do not revert to the inferior solution.
  8. Improve public transport. Generally agree but this section feels too focused on bus and lacks other solutions like congestion charges, bus lanes, etc. I do not feel it is as comprehensive as it should be.
    • More bus through concessions, with profitable routes subsidizing less profitable ones. I agree, although I would add the routes (profitable ones paired with the less attractive ones) should be opened to transparent bidding by interested parties. But I think what is missing here are bus lanes.
    • Cost reduction for bus license. Okay I guess, for it reduces the operation costs for bus as a means of public transport.
    • 10,000 additional buses on the road by the end of the first term of a Pakatan government. I am unsure about the number, but perhaps it is in the right direction.
    • Monthly public transport pass. Agree.
    • One-pass-for-all approach for the pass. Agree, only if it reduces costs relative existing native system. And oh, no TnG.
    • Ridesharing services. I am leaning towards disagree. Pakatan wants to encourage the sector. I think apart from making protecting drivers’ rights and the necessary laws to make the sector legal and safe, maybe the government should stay out of it. Let Grab and Uber or anybody else handles it. No need to give out extra incentives. I do not want to give out sweets here. They can survive on their own.
  9. Improve quality and access to health services. I am unclear or ambivalent about the measures. Some proposals are too general that one goes meh, while some are too specific that I would prefer to ask an actual doctor for his or her opinion.
    • Promise of 4% of GDP spending on health care versus 2% currently. Cool, but what would they spend on?
    • RM500 health voucher for treatment at private clinics. Sounds great, but at the back of my mind, I think there will be tons of abuse by the doctors. I can agree with the proposal if I could be convinced there is a mechanism to detect the abuse and punish the abuser.
    • Allocation and incentives for private companies and welfare bodies to treat rare diseases. I do not know enough to have an opinion here.
    • Focus on noncommunicable disease. Feels too general to merit a response.
    • More resources for mental health. Agreed although more details are required.
    • Compulsory pneumococcal vaccination. I do not know and I am not going to google that.
    • Incentive for palliative care centers. Agreed given Malaysia is ageing but may want to guard against an oversupply of such centers. I do not want such centers to cater foreigners, which is sort of becoming a big business in Malaysia with clients from places like Korea and Japan. Government funding, in this particular case, should be reserved for Malaysians only.
    • Reduce houseman waiting time. I am undecided. I have heard horror story that shortening it might not be a good idea.
    • Medical scholarship abroad to be limited. Agreed. After several conversations with doctors, the quality of a lot of foreign graduates in medicine is pretty bad. I found this shocking but began to understand later that those would could not quality into medical programs in Malaysia generally go outside to get their degree at foreign universities with low reputation. Digressing altogether, there needs to be a qualifying exam (is there already?) for foreign graduates intending to become a doctor in Malaysia.
  10. Guarantee basic food supply and farmers’ welfare. This will make me sound bad, but I largely oppose it. While I support “food security” measures, I oppose self-sufficiency for the costs it imposes on the majority.
    • Introducing tech to farmers. Agreed, but I am unsure if this is any different from current practice.
    • Abolition of rice monopoly by Bernas. Agreed although its abolition should not give rise to other monopolies, private or otherwise. I would suggest a no quota, free imports market.
    • Tight control over rice imports. I oppose. The deltas of Irrawandy, Chao Phraya and Mekong produce tons of rice that could produce the foodstuffs very cheaply. Farmers’ can be aided in other ways, perhaps through diversification away from paddy planting.
    • Cash aid for purchases of farming supplies. I am unsure about this.
    • Aid for disasters for farmers and fishermen. It does not say it so explicitly how, but I think I can support a government-funded income insurance for the groups.
    • Establishment of rubber reserves to control the price of rubber. I oppose. When I read this, it reminds me of Thailand’s disastrous rice reserves.

Core 2: Reforming national institutions Summary: This is perhaps the best part of the manifesto. Direct, clear and what I think this country needs at this juncture so badly. I disagree with very few points only.

  1. Empower the Malay institutions. As I said, Core 2 is the best part of the manifesto. But it is unfortunate that it begins with a section that gives out recommendations that I on average oppose.
    • Empower the sultans and the rajas as a check to the executive. Oppose because I am aware of… checks gone wrong here. I prefer for us to empower other non-royal bodies for check-and-balance purposes.
    • Return religious affairs back to the state and federal intervention removed. Agreed but perhaps with multiple reservations which I will not mention. These reservations could be addressed by a strong federal guarantee on civil liberties and the supremacy of the civil courts over all religious authorities.
    • Establish a consultative body on national harmony. Agree.
    • Encourage research into Malay studies. Okay-lah.
    • Upgrade the Royal Museum into a research center. Okay-lah.
    • Safeguard Malay reserves. I am unsure of this because such status affects the land value adversely. I do not have a solution for this, so I will reserve my judgment. A way has to be figured out to develop certain places, like Kampung Bahru and Kampung Datuk Keramat in Kuala Lumpur.
    • Selected government-owned companies would be prepared for management buyout to raise Malay and bumiputra equity percentage. I oppose. Is there anything special about MBO that I am missing? But MBO could easily go wrong in the cronyism kind of way. I feel it is better to float such companies, and have PNB handle the equity concerns.
    • Table annual status report on the Malay and Islam. Unsure if this is a good idea, but I do not oppose it.
  2. Limit the PM’s terms and reform the PMO. Agreed wholly.
    • 2-term limits on the PM and CM offices. Agreed. In fact, they should enforce this immediately at the state level, regardless whether Pakatan wins Putrajaya.
    • PM to hold no other office. Agreed. This separates the roles of the PM and the finance minister.
    • Reducing the number of ministers in the PMO with functions absorbed by the relevant ministries. Agreed.
    • Reducing allocation for PMO. Agreed.
    • Reducing the number of agencies under the PMO and reassign these agencies to the relevant ministries or bodies. Agreed.
  3. Address scandals in 1MDB, Felda, Mara and Tabung Haji. Agreed wholly.
    • Credible investigation in to the scandals. Agreed.
    • Legal prosecution. Agreed. I would add a promise to throw that crook into prison.
    • Depoliticization and professionalization of these bodies. Agreed.
  4. Reform Malaysian Anti-Corruption Commission. Agreed wholly with additional suggestions.
    • MACC to be placed under the authority of the Parliament, instead of within the PM Department. Agreed.
    • Security of tenure for commissioners. Agreed, if it means they cannot be removed earlier than their term expiry. The term expiry needs to be longer than the term of the parliament, possibly 7 years to increase its independence from the executive.
    • Reforming the Whistleblower Act, Official Secret Act and Witness Protection Act. Agreed. My suggestion is that whistleblower protection should include protection from legal prosecution under any laws, and avenues of legitimate whistleblowing to include, perhaps among others, the press.
    • Compulsory asset and income declaration for all MPs, senators and top civil servants. I would include those at the state levels too.
    • Joining Open Government Partnership. Agreed.
  5. Make the Attorney-General more independent. Agreed wholly with additional suggestions.
    • Splitting the AG chamber into the public prosecutor office and the government’s legal advisor office. Agreed.
    • A qualified MP to be appointed as the legal advisor, who will be a minister. Agreed.
    • Public prosecutor to be independent of party politics. Agreed but I would suggest his or her appointment must be approved by the Parliament with tenure longer than 5 years. I propose a tenure of 7 years
  6. Empower the Parliament. Agreed largely, with additional suggestions.
    • Speakers of the Parliament to be appointed among the members of the House/Senate. I think I disagree but such disagreement may be a matter of definition. I prefer for the Speakers to be elected directly, just like in the UK.
    • Speakers to cannot be a member of any political party. Agreed.
    • Establish a committee to address members’ complaints against the speaker. Agreed.
    • Opposition leader to be a cabinet member. Agreed.
    • Transparent state funding for all MPs. Agreed. I would include the Senators too.
    • Compulsory minimum 100 day sittings a year. Agreed.
    • Establish select committee to keep all ministries in check. Agreed.
    • Top positions to Human Rights Commission, Election Commission, Anti-Corruption Commission, etc to be confirmed by the Parliament. Agreed but I would add their tenure must be longer than 5 years to make them independent of the Parliament after their appointed. Seven is a good number. I do not want to have an overly powerful Parliament that if they become corrupt like during the Cromwell days, then there would be no recourse. It is important for these positions to be independent of the executive and the legislature after their appointment.
    • Select committees to have the power to call major government regulators in for questioning. Agreed but I would say the committees should have the power to call anybody for questioning, the jail time for failure to attend any hearing.
    • Public Accounts Committee chairman to be appointed from opposition MP. Agreed.
    • Compulsory public feedback for all bills. Agreed.
    • The number of all state senators must always be greater than federally-appointed members. Agreed. But here, I am disappointed there is no move to have election for all senators.
    • Publication of board membership on all companies by all MPs and senators. Agreed.
  7. Guarantee the integrity of the electoral system. I do not object. But the proposals do not go far enough to my liking. I prefer the first-pass-the-post method be replaced with proportional representation.
    • Creating a permanent committee on caretaker government. Agreed.
    • Instituting previous electoral recommendations from Bersih and Ideas. Agreed.
    • Cleaning up the electoral roll, improving voting process and minimum 21 days official campaigning period. Agreed.
    • Lowering voting age to 18. Agreed.
    • Automatic registration. Agreed.
    • Guaranteed access for all registered party to state tv and radio. Agreed.
    • Anti-malapportionment and gerrymandering measures. Agreed.
  8. Establish political financing mechanism. Agreed wholly.
    • Pass an act to make sure political financing is transparent and legal. Agreed.
    • Provide state financing for political parties. Agreed.
    • List out all legitimate financing sources. Agreed. I would also ban foreign financing, and provide protection for all local sources. No tax break for this purpose. I would also put a ceiling a corporation could donate.
    • Financing reporting each year. Agreed.
    • RM1 billion limit on assets held by political party. Agreed.
    • No government-linked companies are allowed to give political contribution. Agreed.
  9. Instill trust in the judiciary. It’s okay. I think there is also a need to reform how the AG has a say in the appointment of lower judges, which the manifesto is silent on. I want that to go away.
    • Merit-based promotion without interference from the Prime Minister. Agreed.
    • Improvement in wages, bonuses and incentives for judges. Ambivalent.
    • Parliament select committee to have a say in judge appointment. Agreed.
  10. Instill trust in the police and the military. Largely agreed.
    • Increase in funding for the police. Ambivalent.
    • Decentralization of the police force. Ambivalent.
    • Establish IPCMC. Agreed.
    • Special branch to have its political policing role removed while focusing on domestic security, terrorism and organized crime. Agreed.
    • Reforming pension for the police force. Agreed. There are no details, but it has to be contribution-defined benefits.
    • State financing for ex-police/military associations. Ambivalent.
  11. Empower the civil service. Too general.
    • Depoliticize the civil service. This feels too general to be meaningful.
    • Limits on external consultants participation in policymaking. I am unsure if this is good because there are a lot of good people outside of the civil service. But it is clearly a response to the Pemandu experience.
    • Merit-based promotion. Agreed.
    • Instilling out of the box culture. Is this a manifesto item?
  12. Improve governance at GLCs. Mixed.
    • Improving governance in troubled GLCs. Agreed but too general.
    • GLCs to be active in sectors with market-failure and not compete with others. Unsure. From the way it is worded, the author does not understand the concept of market failure.
    • Management buyout for GLCs to increase bumiputra equity level. I oppose.
    • Politicians to not sit on GLC board. Agreed.
    • GLCs to have bumiputra vendor program. Opposed.
    • Establish a select committee to vet GLC’s financial performances. Agreed.
  13. Improve government procurement. Wholly agreed.
    • Wider used of open tender system. Agreed. You know what would be awesome? Ratifying the new TPP government procurement chapter.
    • Revise recent infrastructure contracts given out to foreign firms. Agreed.
    • UKAS to be transferred to MOF from PMD. Agreed.
    • Wider use of IT system to avoid the role of discretionary in contract awards. Agreed, with reservations.
    • Share a public list of all government contracts awarded, along with relevant financial information. Agreed.
    • Support for SMEs to navigate the bidding process. Agreed.
  14. Realizing federalism. Agreed, with some reservations.
    • Limit changes to the ninth schedule to prevent the strengthening of the federal government vis-a-vis the states. Agreed.
    • Decentralize services. Partially agreed. Some of the areas mentioned may need federal powers. For instance, I do not trust the state in managing the forest due to its incentives to encourage timber production. The federal government needs to check some powers invested in the state.
    • Each state to enjoy 10% of income tax collected from the state residents. Agreed but may need to lower the amount.
    • 50% of development expenditure to be directed to the five poorest states in the next three years. Partially agreed. The figure might be too high but I have not done the calculation to have a firm opinion on the matter.
  15. Empowering the local council. Agreed, although I feel the promise of “mengukuhkan demokrasi setempat” is a bit vague. May need to wait for the English version to come out. I would take that as reintroducing local election, but I could be wrong.
  16. Protecting human rights. Agreed wholly.
    • Members of the Malaysian human rights boards to be appointed by the Parliament. Agreed.
    • Improve Malaysia’s standing at the Universal Periodic Review. Agreed.
    • Greater funding for human rights bodies. Agreed.
    • Upgrade the powers of Malaysia’s representative to the Asean human rights body. Agreed.
    • Ratification of various agreements regarding human rights. Agreed.
  17. Abolish oppressive laws. Largely agreed.
    • Abolish Sedition Act, Crime Prevention Act, University and College University Act, Printing and Publication Act, National Security Council Act. Agreed although I am unsure if Crime Prevention and University and College University Acts should be abolished. I think maybe an amendment is suffice.
    • Amend laws relating to public assembly. Agreed.
    • Amend Communication and Multimedia Act. Agreed.
    • Amend SOSMA. Agreed.
    • Amend Peaceful Assembly Act. Agreed.
    • Amend POTA. Agreed.
    • Amend laws to allow the courts to revise decisions by the government. Agreed.
    • Professionalize RTM and Bernama. Agreed.
    • Media ombudsman to be established. Agreed.
  18. Abolish BTN and PLKN. Agreed wholly.
  19. Increase transparency to the budget process. Agreed.
    • Midyear review of budget at the Parliament. Agreed.
    • Implement accrual accounting to government finances. I will leave to this to accountants.
    • Centralize all data on off-budget spending. Agreed.
    • Stats department to publish machine-friendly data. Agreed, but might be irrelevant under this section as most of data from the department is unrelated to the budget process. Fiscal data usually comes from the Finance Ministry.

Core 3: Economic growth and equality Summary: I feel I could see Bersatu’s influence the strongest here. I think I am mostly 50-50 here.

  1. Raise national economic growth. Mixed.
    • Maintain an open economy. Agreed.
    • Support SMEs. Mixed.
    • Support bumiputra economic activities. Mixed.
    • Publish the latest bumiputra equity holdings in the market and do a yearly report on it. Agreed.
    • Bumiputra economic NGOs to be official dialog partners. Opposed. What is the significance of being dialog partners? I feel they should not be given special access to the government.
    • Focus on achieving Wawasan 2020. Ambivalent.
  2. Encourage investment and simplifying business and trade. Agreed.
    • Participation in Asean-linked agreement and RCEP. Agreed. I hope this also means ratification of the TPP.
    • Proceed with bilateral with the EU. Agreed.
    • Focus on attracting high-quality investment from China, but with safeguard especially with it comes to public infrastructure projects. Agreed.
    • Business associations to have access to the ministries and the relevant agencies. I am unsure why this needs to be mentioned.
    • MPC to be given power to cut red tapes to increase productivity. Agreed.
    • Encourage women participation in the labor force. Agreed. But wrong section.
    • Increase English competency in the labor force. Agreed.
  3. Revamp the taxation system. Leaning towards opposing it.
    • Revamp personal income, corporate income and other taxes. Unclear what the revamping entails. I would suggest closing all the tax holidays/incentives for old industries.
    • Reduce tax rate for small businesses. Mixed. Malaysian tax rates are already quite low relative to most countries in the world.
    • Cut income tax for the middle 40%. Opposed. Such cut cannot come together with abolition of GST or an equivalent tax cut in consumption tax.
  4. Establish Equal Opportunities Commission. Agreed. This is important to move beyond affirmative action/positive discrimination and address negative hiring discrimination in the public and the private sectors.
  5. Raise household income. Oppose most of the measures.
    • Raise economic growth and provide safety net for low-income workers. Too general.
    • Standardize minimum wage across Malaysia. Opposed.
    • Raising minimum wage to RM1,500 monthly. Mildly opposed. I think the orthodox view is that 40% MW of median wage should be okay and RM1,500 and below should not affect market rates that much.
    • Government to subsidize RM250 of the minimum wage. Mixed. With the abolition of the GST, and further proposed cuts in income tax, the raise in expenditure might be too much. I need to see its projected total cost to decide.
    • Reducing foreign labour to 4 million from 6 million within 3 years. Opposed. The impact of reducing 2 million work within that short timeframe can cause a recession. There is already a shortage of workers in Malaysia in multiple sectors.
    • More efficient zakat aid for the needy. Agreed, but no details.
    • Special agency to distribute BR1M. Mixed. I am unconvinced of the need to have a special agency for that. The document does say the agency might be a genesis of a safety net system. I prefer a migration towards negative income tax system, which will make BR1M redundant.
  6. Create quality jobs. Agreed. The point on work rights for refugees is particularly brave and the right thing to do.
    • Reintroduce unions and collective barganing at workplace. Agreed.
    • Create 1 million quality jobs. Unsure.
    • Free retraining for new economy. Okay, maybe.
    • Legalizing and allow refugees to work in Malaysia. Agreed.
    • Subsidized child creches throughout the country to encourage labour participation. Agreed.
  7. Introduce EPF for homemakers. Opposed. Cash flow can be as important as savings. If you do not have enough cash flow while starving, savings that could only be tapped into 30-40 years from now will not be useful. I support if it is voluntary.
  8. Guaranteeing public finance sustainability. Agreed.
    • Preventing the government from taking public funds money. Agreed, without quibbling too much with the presumption here.
    • Revamp KWAN. I am unsure what the revamp is, and how their proposal is different from current setup.
    • Allocate RM60 million yearly to New Villages, from RM20 million now. Ambivalent.
    • Soft loans for small businesses in rural areas. Ambivalent.
  9. Protecting Orang Asli. Agreed.
    • JAKOA to be led by an Orang Asli. Agreed.
    • Implement Suhakam’s recommendation relating to Orang Asli’s land. Agreed.
    • Renegotiate Orang Asli’s land rights affected by land development schemes. Agreed.
    • Demarcation of Orang Asli’s land. Agreed.
    • Bringing public utilities and services to Orang Asli’s settlements. Agreed.
    • Funds to preserve and promote Orang Asli’s culture. Agreed.
  10. Stronger environmental protection. Largely agreed.
    • Enforcement of timber quota. Agreed. This will need federal power, which may call for a slow down in some decentralization proposals.
    • 40% carbon reduction by 2020. That sounds unrealistic. It is also unclear. 40% of what and when?
    • Source of renewable energy to be increased to 20% from 2% by 2025. Agreed, but that may require lots of dams.
    • Establish a climate change body to focus government response to the phenomenon. Agreed.
    • Taman Negara as a World Heritage Site. Ambivalent.

Core 4: Sabah and Sarawak Summary: Largely agreed, but there are multiple points that may suggest the manifesto decentralizes power by too much, and ignores the sustainability of the federal government finances.

  1. Establish a commission to review and implement the 1963 Malaysia Agreement. Agreed, mostly on the reviewing part. Implementation may depend on the reviews.
  2. Encourage economic growth. The section is a misnomer. It is more about royalties and rural development. 50-50.
    • Increase state share of petroleum to 20% from current 5%. Leaning towards opposition. Opposed. Government revenue will take a big hit in conjunction with abolition of GST and cuts in income tax. If the share is increased, it will be hard for the federal government to raise expenditure in Sabah and Sarawak.
    • Radically expand clean water supply in the interior. Agreed.
    • Better road access to the towns and the interior. Agreed although I am concerned how this will affect forest cover.
    • Build a trans-Borneo rail service. Agreed.
    • Review PDA to allow Sarawak have a petroleum company of its own. Opposed.
    • Pan-Borneo Highway. Agreed.
  3. Create Job opportunities. Mixed.
    • Borneonization of public agencies located in the states. Mixed. It is good to have a good mix. There are Sabah and Sarawak people working in the peninsula and Borneorization might segregate people unnecessarily, taking these people to fill up positions at home.
    • Establish an industrialization fund in Sabah and Sarawak. Agreed.
  4. Make Sabah and Sarawak as model society. Very fluffy. Not worth writing much.
    • Student exchange programs between the peninsula and Sabah-Sarawak. Agreed.
  5. Improve education and health services. Largely agreed, but there is a bad idea here.
    • State government to have the right to decide on education services. Agreed although there has to be certain requirements that the state must adhere to.
    • Parents to get options on the teaching medium. Agreed.
    • Local content in school syllabus. Agreed.
    • Upgrade of all Borneo hospitals. Agreed.
    • GLCs to contribute to upgrades of schools and clinics. Opposed. Let the government use the tax money to do so. It is not the responsibility of the GLCs to do this. It is the government’s.
    • Introduce health insurance in the rural areas. Agreed.
  6. Protect rural welfare. Largely agreed.
    • Reduce bureaucracy when it comes to birth registration. Agreed.
    • Encourage the use of microdams, solar and biogas power in the interior. Agreed.
  7. Defending the sovereignty of Sabah and Sarawak. Agreed. But there is no mention of China’s presence off Sarawak and plans to end curfew in eastern Sabah, which is disappointing.
    • Establish truth and reconciliation policy on immigration into Sabah. Agreed, but will oppose if it involves expulsion of long-time residents.
    • Increase the strength of border patrol in Sabah. Agreed.
  8. Decentralizing power to Sabah and Sarawak.
    • To spend 50% of all revenue generated in the states within the states themselves. Weakly agreed.
    • To delegate trade and commercial policy to the state government. Weakly agreed.
    • Grant the state government the power to abolish trade barrier and tariff. Undecided. I am okay with it, as long as it does not affect the single market status of Malaysia.
    • State government can control the relevant federal enterprises active in the states. Weakly agreed, but isn’t it is already the case?
    • Upgrade the adat court. Mixed. I am unsure how this will affect the civil courts.
  9. Address native customary land conflict. Agreed.
    • Compensate any loss of native land. Agreed. I must also say, the compensation must likely come from the new owner of the land.
    • Mapping of customary land. Agreed.
    • Establish tribunal courts to settle land conflict. Agreed.

Core 5: Building a moderate and inclusive Malaysia Summary: I like the focus on technical and vocational schools.

  1. Make government-funded schools as the schools of choice. Agreed, although this section is not comprehensive enough. The question of vernacular and religious school is largely untouched.
    • Reserving a level of SBP and MRSM quota for high-performing students from poor families. Agreed.
    • Upgrade roads connecting schools with homes. Agreed.
    • Encourage the private sector to aid and adopt schools. Mixed. The private sector could do it if they want to, but the government should use its own resources to improve these schools.
    • Encourage the private sector to aid and adopt schools. Mixed. The private sector could do it if they want to, but the government should use its own resources to improve these schools. One reason I am skeptical of such CSR is that these companies get tax break. I oppose such loopholes for whatever reasons. That tax money could better be used by education experts, which these companies unlikely to have. Why would we delegate education expenditure to PR or HR personnel in, for instance, a telecommunication, power or petroleum company?
    • Improve trust schools. Mixed. If it does not work, can we go back to the simple public/private school model?
    • More GLC scholarships for poor students. Agreed.
    • Scholarship for teachers. Agreed.
    • Depoliticize school syllabus. Agreed.
    • Raise the status of vocational and technical schools. Agreed. This is very important, as it provides an alternative educational route. Not everybody is suited to attend university, at least not immediately.
    • More resources for vernacular, missionary and Islamic schools. Too general. I prefer a gradual move towards a unified national school stream that deemphasizes religion and offers various languages as a subject, not as medium of teaching.
  2. Improve the quality of Malaysian universities. Agreed.
    • Free university education. Mixed. If it is free, perhaps we can start abolishing PTPTN. Also, if it is free, abolishing GST and cutting down the income tax will be an incredible policy to follow. Making university education free will be a big undertaking.
    • Guarantees students’ political rights. Agreed.
    • Self-governing student bodies. Agreed.
    • Universities to have the autonomy in appointing its Vice Chancellor. Agreed.
    • Expansion of technical and vocational training. Agreed.
    • Recognizing UEC certificates. Agreed.
    • On PTPTN, there is a proposal to abolish the practice of blacklisting. While I may agree on raising the minimum wage for servicing one’s debt, I oppose doing away with the blacklist. There has to be a cost to not paying. The blacklist, at the very least, could include a ban from foreign travel.
    • Increase opportunities for massive open online courses. Mixed.
  3. Protecting the welfare of disabled persons. I would be a monster to oppose this.
    • Several research institutes to be established to look into the requirements of disabled persons. Agreed.
    • More schools for the disabled. Agreed.
    • Incentives for companies for hiring disabled or special needs workers. Agreed. I have to add, the best way to do this is to have tight labor market.
    • Government supports for centres catering to special needs people. Agreed.
  4. Fighting crime and social ills. Largely ambivalent.
    • Raise allocation for wages and equipment for the police force. Agreed but at the back of my mind, revenue issues.
    • Further training for police officers for sexual crimes. I am not an expert in this field so I will refrain from so saying too much.
    • Address online crime. Ditto.
    • Enforcement against the smuggling of alcohol and tobacco products. Mixed. The source of high smuggling activities is the astronomically high duties imposed on these products. A better way is likely to reduce the duties significantly.
    • Stern action against… moonshine. See statement on duties.
    • Do anti-bully, anti-crime, and anti-social ill campaigns at schools. Meh. Note me down as unimpressed.
    • Work with NGOs for drug addiction rehabilitation programs. Ambivalent. I do not have any strong opinion on this.
    • Apply harm reduction principle in addressing drugs addiction. Ambivalent, largely because I do not know what it means.
  5. Inculcate neighborliness and support the family institution. Mixed, and too fluffly.
    • Transferable tax allowance between husband and wife. Agreed.
    • Tax allowance for married couple. Agreed although, better not be too much.
    • Encourage balanced urban-rural development to keep families together. What?
    • Encourage local activities at the neighborhood level. Agreed, but needs details.
    • Corporate tax break for companies-sponsored activities that support the family institution. Opposed. No tax break for companies doing CSR. Keep the tax code simple.
  6. Empower the civil society and encourage social entrepreneurship. Mixed.
    • Simplify the process to establish welfare bodies and non-government organization. Agreed.
    • Grant tax break for welfare bodies. Opposed. I would grant income tax break up to a certain level only. After all, if they are welfare bodies, why are they making large profits? I would go further and tax the income of any large profitable NGOs.
    • Establish a commission (Charities and Non-Profit Organizations Commission) to regulate the NGOs, taking over the function of Companies Commission and Registry of Societies. Agreed.
  7. Making public space for youth. Largely agreed.
    • More recreational and sporting space. Agreed.
    • More local libraries. YES!
    • Encourage entrepreneurship among youth. Too general.
  8. Establish National Harmony Consultation Council. Agreed.
  9. Clean up Malaysia’s reputation with respect to corruption. Too general although the other proposals could be counted under this section.
  10. Strengthening border security. This section feels remarkably disappointing. In my opinion, Pakatan should have addressed military and border authority capacity, to include the ability to defend the Spratly’s, curfew/security in eastern Sabah and piracy in the Straits of Malacca.
    • Increase resource for the maritime enforcers. Agreed but too general.
    • Engage Indonesia and the Philippines to address border issues. Agreed, but too general.
    • MACC to keep a close eye on border authority. Agreed, but too general.
  11. Address the the Rohingya crisis as well as the conflict in Palestine. Agreed with the Rohingyas but might be too ambitious when it comes to Palestine.
  12. Strengthen Malaysia’s foreign policy. I agree with pro-Asean proposal, disagree with non-aligned principle.
    • To get a Malaysian to be the Secretary to the OIC. Blergh.
    • Encourage the formation of an Asean community, and reenergize Malaysia’s role in Asean. Agreed, but needs more details.
    • Upgrade the Malaysian office to Asean human rights commission. Agreed, but needs details.
    • More Malaysians to be appointed to the Asean Secretariat as well as to the Commonwealth Secretariat. Agreed with Asean, but I feel we are wasting our time with the Commonwealth.
    • Reassert non-aligned position. Opposed. Time to put our feet down.

Two of Pakatan Harapan’s ten big promises are the abolition of GST (returning to the SST regime) and the reintroduction of fuel subsidy.[1] While I can agree with most of its other proposals that include credible investigations into various financial scandals besetting the Barisan Nasional government, I oppose these two policies.

With respect to the GST, I think there is a better way to get what Pakatan Harapan seeks to achieve: cut the GST rate to as low as 4% from the current 6%. This policy is equivalent to abolishing the GST without actually abolishing it.

To make sense of why they — abolishing the GST versus cutting the GST rate — are effective equivalent, we have to understand two things.

First, consumers essentially face the end prices only. It is the end prices that matter to them, regardless of tax regimes. If the SST regime had been maintained and its rate hiked to 20% from its previous 6%-10% rates, consumers would have still felt the pain of rising prices. It does not take a GST for that statement on pain to be true.

Second, there is an equivalent GST rate to the old SST one. From my understanding, 4% GST rate is the same to the old 6%-10% SST rate. We know this because at 4% GST rate, government GST revenue would have been the same as its SST revenue (we call this revenue-neutral). In other words, the tax burden faced by residents in Malaysia collectively would remain unchanged if the GST rate had been introduced at 4% back in April 2015. To put it yet in another way, if the GST rate had been implemented at 4% instead of 6% in 2015, consumers would not have faced the price pressures they suffered in 2015-2016. Theoretically at 4%, there would have been no inflation attributable to the taxation system change.

Once we understand these two factors, we can immediately reframe the 2015 introduction of the GST as a tax hike, from 4% to 6%.

So, instead of abolishing the whole GST system altogether, Pakatan Harapan, if it comes to power, should cut the GST rate to 4% at minimum. That in effect will undo the 2015 tax hike and achieve the same effect as abolishing the GST from the perspective of the consumers, given that only the end prices matter.

I think this is the best way to acknowledge and to address the pain many felt during GST implementation, while keeping the benefits of having a transparent and efficient taxation system.

Mohd Hafiz Noor Shams. Some rights reservedMohd Hafiz Noor Shams. Some rights reservedMohd Hafiz Noor Shams. Some rights reserved

My fear of returning to the old SST way is that it could lead to an inflationary pressure worse than what we experienced in 2015 and 2016 (discounting the collapse of energy prices). The SST suffers from double taxation problem, unlike the GST. This has the potential of creating a cascading effect throughout the supply chain. Such a large rise in price level would be disastrous to a Pakatan government that campaigned not just against GST, but more importantly, a coalition that campaigned against rising living costs. To prevent such inflation from happening, a SST rate lower than 6%-10% might be needed, which would be a big hit to government revenue (essentially cutting the equivalent GST rate to below 4%).

This is another point to consider: government revenue. There is pressure to increase government revenue for social services, at a time when Malaysian society is ageing, unless you believe in a strict libertarian understanding of the state, which is not the norm in Malaysia. Under current situation, I think Malaysia can afford to loosen up its deficit ratio, but taxes could only be cut so low.

Mohd Hafiz Noor Shams. Some rights reservedMohd Hafiz Noor Shams. Some rights reservedMohd Hafiz Noor Shams. Some rights reserved

[1] — Pakatan Harapan (PH) says it will only take 100 days for it to put into place 10 major policy changes if it is voted into government in the 14th general election. [Pakatan pledges to fulfill 10 promises within 100 days of GE14 victory. Kamles Kumar. The Malaysian Insight. March 7 2018]

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