Categories
Economics Politics & government Society

[2859] Manifesto promises I would like to see made

There were a lot of talks about the budget recently. About those by the opposition and by the government.

The opposition may have to improve on its budget quality especially on the assumptions made, but I believe the annual tabling of such alternative is healthy and is a positive development in our increasingly flawed democracy. Why? Because it provides a clearer picture of a different near future, regardless whether we agree with it or not. Imagining an alternative (or a utopia even) is always important so that we do not fall into the trap of Doctor Pangloss, or unnecessarily resigning to a bad outcome.

But a budget is just a budget however important it is. It is merely a short-term roadmap towards whatever goals we want to achieve. A better document offering a clearer alternative would be a goal-setting manifesto.

Below is a partial list of matters I would like to see in the manifesto. Some of them are general and others are specific.

I have not costed it, but whenever costing is relevant, I think it is doable. In truth, a lot of crazy ideas are economically feasible and mine, I do not think they are crazy. And some of them may already exist, or in the process to coming to reality. Some admittedly are fluffy.

Let just say it is a non-comprehensive wishlist for further discussion.

Election matters

  1. Introduce proportional representation to address gerrymandering and malappropriation in Malaysia. Having a PR system in place of first pass the post would help make our electoral system fairer and so, instil more confidence into our democratic system. It would also be more robust against possible cheating.
  2. State funding for all individual contesting for public offices. This hopefully would make money less important in an election. To avoid abuse, candidates failing to get a certain percentage of votes would be required refund the state. Candidates will be allowed to receive contributions from private citizens.
  3. Mandatory reporting for all contributions received by all candidates. Limits to be applied on parties and individuals. Contributions will be taxed above a certain limit.
  4. A complete ban on private corporations and government bodies from making contributions to any political parties. This includes no program with any political parties. In Malaysia, government bodies especially have serious conflict of interest and this ban would help reduce corruption.
  5. Ban political parties from running or owning for-profit entities.
  6. Automatic registration for all Malaysians age 18 and above. We should not put up barriers to voting.
  7. Yes, reduce voting age to 18.
  8. Reinstate local elections, starting with cities with population more than half a million. This should help make local authorities more responsive to the local population instead of to Putrajaya.

Parliament

  1. Election of Senators.
  2. Create a smaller Senate by limiting federal appointees to no more than total state senators. Federal Territories’ representatives be reduced to 3. Representatives for Sabah and Sarawak be increased to 3 each. This will create stronger check-and-balance in the Parliament and return power to the states.
  3. Reserve special seats for the Speaker of the House and the Senate, and have them elected. The Speaker must renounce membership with any political party. This is to ensure fairness in the Parliament.
  4. Greater funding for all MPs for area servicing and hiring of research assistants.
  5. Parliament to remain in Kuala Lumpur.

Government

  1. Ten-year term limits for the positions of prime minister and chief ministers. The years are cumulative. This is to encourage new talents to enter politics and the government. Also, to avoid having a long-term authoritarian as a leader.
  2. Enforce retirement age on all civil servants. No contract extension.
  3. Public declaration of assets and income for all public office holders, and as well selected civil servants.
  4. Encourage diversity in the civil service. Malaysia is a diverse country and our civil service should reflect our demography.
  5. Total function separation between the prime minister and the finance minister at the federal and the state levels. This is to address conflict of interest.
  6. No minister will be allowed to hold more than one portfolio.
  7. Decentralize powers of the Prime Minister’s Department through closure of several agencies or relocation of agencies to other authorities.
  8. Separate the office of the AG between government’s legal advisor and the public prosecutor. This will also include separating the AG from appointment/promotion of judges.
  9. Downsize the size of the Cabinet. The decentralization of power of the PM Department would also mean fewer ministers without definite portfolios.
  10. Limit federal funding to regional development authorities designed to circumvent state governments. States to have strong representation in the relevant regional development authorities.
  11. Total separation between the government and Pemandu’s overseas business. The entity will not be allowed to use Pemandu’s name, or government resources. Private enterprises should not use government name or resources for private gains.

Government finances

  1. Target 1%-2% deficit of NGDP. Balanced budget unnecessary.
  2. Reduce government guarantees for government-linked companies.
  3. Migrate civil service pension scheme towards defined-contribution plan fully.
  4. Include off-budget spending in government accounts, though no necessarily merged.

Taxes

  1. No GST hike in the next 5 years. Rate to stay at 6%.
  2. No GST refunds for foreigners.
  3. No zero-rated GST for goods bought by corporations.
  4. Rideshare services to pay GST.
  5. No income tax holiday for TRX.
  6. No tax-free treatment for real estate projects.
  7. Income tax holiday to be reserved to selected manufacturing and high-tech services.
  8. Create several new income tax brackets and push the top income tax rate higher.
  9. Close loopholes for corporations with respect to income tax.
  10. Negative-income tax for all Malaysians.
  11. Wealthy NGOs and religious institutions will be taxed, regardless of profit/non-profit status.
  12. Find a way to get global internet companies with operations in Malaysia to pay income tax.
  13. Gift or donation above a certain high threshold to private individuals to be taxed.
  14. Temporarily reduce income tax rate marginally for married working women to encourage labor participation rate as well as address gender pay gap.

Government-linked companies, funds

  1. Complete professionalization of GLCs by banning MPs and retired politicians from heading any government-linked companies or funds.
  2. No bailouts of government-linked companies.
  3. Remove government ownership in Malaysia Airlines.
  4. Reduce government holdings in non-strategic private companies, especially by Khazanah.
  5. GLCs to be closely monitored by Malaysian Competition Commission.
  6. No Arul Kanda in Khazanah or any other GLCs.

Corruption

  1. Independent investigations into 1MDB and all of its related cases.
  2. Ensure fair trials for all 1MDB actors.
  3. Closing down of 1MDB and SRC.
  4. Malaysian Anti-Corruption Commission to be placed under the Parliament to strengthen its independence.

Social services

  1. Basic income of RM200 monthly for Malaysians aged 60 and above. This could be an experiment for a universal basic income scheme.
  2. Baby bonus of RM1,000 for the first two children. This is to address ageing demography in Malaysia.
  3. Citizenship bonus upon birth for all Malaysians, to be invested at PNB funds. Quantum to be decided.
  4. Zero cash handling for BR1M. Government to set up bank accounts for those without one.
  5. BR1M requirements to be tightened but individual payments enlarged.
  6. Central creches to encourage higher labor participation rate, especially among women. Mandatory preschools could double-up as central creches for older young children.
  7. Stronger affirmative actions for Orang Aslis and other non-Malay natives. Government agencies managing Orang Asli affairs to be led by Orang Aslis only.
  8. Ancestral land of Orang Aslis and those belonging to Sabah and Sarawak native communities to be protected fully.
  9. Temporary unemployment benefits, possibly lasting 3-6 months. I think Perkeso can be reformed to manage this. Such benefits also is an automatic stabilizer in the economy, so less need for discretionary fiscal stimulus in times of recession.

Education

  1. Malay remains as the medium of exchange in national schools.
  2. Malay and English remain compulsory.
  3. Offer non-native languages to all students in national schools (this includes major Asean languages: Thai, Khmer, Vietnamese, Tagalog and Burmese).
  4. Reduce the role of religion in national schools to sustain diversity, and limit it to religious classes only.
  5. Moral classes to be reorganized into civic classes open to all students.
  6. Work to strengthen the national school system and make it the first choice for most Malaysians.
  7. Greater autonomy for universities and political freedom from students.
  8. Mandatory preschooling. Free for poor/lower-middle class families.
  9. Mean-tested PTPTN, reserving such funding for poor students only.
  10. Meritocratic process entrance into universities. The process will be tempered with socioeconomic concerns to help create a more equal society. Affirmative action for under-represented communities to be merged with the meritocratic process.
  11. Limit public undergraduate scholarships abroad. More graduate-level scholarships abroad instead.
  12. Mandatory study-abroad for a semester or two for all Malaysian public university students to Asean institutions.
  13. Expand places at public universities.
  14. Automatic partial scholarship for students from poor families attending public universities, in place of PTPTN.

Health

  1. No raising of patent protection period.
  2. Increase access to generics.

Homes

  1. Limit ownership of residential properties by foreigners.
  2. Additional ad valorem tax on foreign-owned residential properties.
  3. No expiry on real property tax gains on foreigners.
  4. RPGT on Malaysians to be lengthened to 10 years.
  5. Tax relief for residential rental payments for Malaysians earning below a certain threshold and landlord up to a certain threshold. This will be combined with the negative-income tax structure.
  6. Stronger protection for renters.
  7. High-quality affordable public housing for rents in cities and its suburbs especially for the young. This is to encourage the young to remain in the cities. Having the young in will keep the cities lively.

Islam

  1. No raising of punishment for Islamic laws violations.
  2. Conversion of minors requires approval by both parents.
  3. Reduce conflict between civil and shariah courts by defining the division of powers more clearly.
  4. Reduce barriers to marriage. Make marriage classes optional.
  5. Reduce religious authority’s ability to spy and conduct raids.
  6. Remove religious identification on the national identity card.

Discrimination

  1. Institute a law to address discrimination in the private sector with a focus on race, religion, political belief and gender.
  2. Minimum mandatory 30 days paternity leave to address gender pay gap and change societal expectations on gender.

National service

  1. Reorganize into a voluntary 1-year military service, with possible merger with the Wataniah regiment.
  2. Strip party politics from the program.

The press

  1. RTM to be made more independent and remodelled after the BBC.
  2. No licensing of blogs.
  3. A media ombudsman to handle public complaints against the press.
  4. Pass Freedom of Information Act.
  5. Reform Official Secret Act to reduce abuse.

Civil liberties

  1. Limit the police’s ability to restrict peaceful assemblies.
  2. Address discrimination against religious minority.
  3. Sosma to be limited towards terror activities only.
  4. Sedition Act to be scaled down.
  5. Tighter requirements for book banning.
  6. Stronger privacy and data protections law and enforcement.

Environment

  1. Limit reclamation projects in Johor, Malacca and Penang. Stronger national requirement for reclamation proposal.
  2. Reduce fragmentation of jungle, especially in Peninsular Malaysia. Possible jungle crossings over highways and roads.
  3. National park status for Belum-Temengor.
  4. No logging within a certain distance from river banks.
  5. No development within a certain distance from the beach.
  6. Stop new hill development above a certain height.
  7. Arm wildlife officers/enforcers and increase punishment for wildlife violations.
  8. Yearly federal payments to states for maintenance of primary jungle coverage. Part of the payments to be reserved for replanting purposes to negate previous jungle loss. Audit to be made twice a year on jungle coverage.
  9. Reduce logging permits and raise the cost of the permits.
  10. Introduce carbon tax.
  11. Total ban on sand exports.
  12. Rehabilitation funds for land ravaged by illegal bauxite mining in Pahang.
  13. Limit dams construction.
  14. Work with Singapore to open up water flow under the Causeway.
  15. Reduce greenhouse gas emissions.
  16. Raise fuel efficiency of vehicles.

Public transport and transport infrastructure

  1. Cashless payments to be opened for others and not limited to TnG at all train stations, buses as well as highways.
  2. TnG will be forced to provide no-fee reloading access points at all train stations, or contract will not be renewed/early termination if possible.
  3. Inquiry to be conducted on why TnG was chosen over RapidKL’s native cashless payments method, and why MRT is unable to process RapidKL’s native cashless payment method.
  4. Reassess the need for MRT3 due to low ridership for MRT1. MRT2 to continue as planned.
  5. HSR to continue as planned with open tender. Reduce the number of stops.
  6. JB-Woodlands rail link to be constructed.
  7. No tunnel for Penang.
  8. Federal support for trams in George Town.
  9. Cancel the ECRL but build a Kuantan-KL double-tracking electrified line. Upgrade the existing East Coast line, with at least electrification.
  10. Continue with the Pan-Borneo Highway.
  11. Mavcom to be funded directly by the government instead of revenue from airport/passenger taxes to avoid the Commission’s conflict of interest as a regulator and a taxing authority.
  12. Daily float of retail petrol.
  13. Tax vehicle fuel. Proceeds will be used to subsidize public transport.
  14. Renegotiate highway contracts to limit toll hikes as well as possible compensation to contractors.
  15. Mandatory deregistration of vehicles after 15-20 years on the road.
  16. Much, much higher road tax and excise duties on luxury vehicles.
  17. No new port in Malacca.
  18. Construct the Labuan-Sabah bridge.

Monarchy and state rulers

  1. Head of states are banned from participating in business. Existing holdings to be divested and placed in trust fund managed by the state for rulers’ welfare.
  2. Title awards by all states and by the federal government to be significantly limited.

Immigration and border control

  1. Abolition of road charges but maintain VEP. VEP to be expanded to all entry points.
  2. Work towards visa-free status for all Asean citizens.
  3. No airport tax equalization or hike.
  4. Work towards the lifting of curfew in eastern Sabah.

Security and defense

  1. Cut any role in the Yemen war.
  2. No unilateral declaration of curfew by the PM under the NSC Act. The government must compensate any loss of property by innocent victims.
  3. Establis IPCMC.
  4. Establish Asean security forces.
  5. Upgrade facilities in the Spratlys.

Asean

  1. Strengthen Asean roles in the region.
  2. Work towards to a common Asean position on the South China Sea.
  3. Work towards an Asia-Pacific free trade area.
  4. Work towards the establishment of an Asean parliament, with representatives elected by Asean citizens.
  5. Create Asean scholarships for non-Malaysian Asean citizens at Malaysian universities to encourage integration between Asean countries.
  6. Resolve border dispute with Asean neighbors.
  7. Accession of Timor Leste into Asean as a full member by 2025.

Internet and communication

  1. Enforce net neutrality. Internet service providers are not allowed to bundle connection services with other services.
  2. MCMC to focus on service quality and technology adoption. No power to censor the internet unilaterally without consultation with other authorities like Suhakam and the courts.
  3. Work to diminish Telekom Malaysia’s monopoly as an ISP with a view to cut down on internet access cost.

Kuala Lumpur

  1. Less power for Minister for Federal Territories. Federal government’s decision must be approved by an elected mayor.
  2. No new development for Bukit Gasing and Bukit Nanas.
  3. Stronger actions against indiscriminate parking. Malls and hotels will be held responsible for illegal parkers outside of its compound to force drivers and property/business owners be more responsible towards their surroundings.
  4. More working pedestrian lights and on-grade crossings.
  5. Open the relevant KL train stations for free crossing by pedestrians.
  6. Wider use of Balisha beacons instead of crossing lights for non-major roads.
  7. Enforce pedestrian-first rules versus road vehicles.
  8. More pedestrian crossings, and stronger enforcement/punishment against vehicles for not stopping at crossings.
  9. Introduction of congestion charges. Income set for public transport funding.
  10. Limit the city hall’s ability to close access to  Dataran Merdeka or any public space except for emergency purposes.
  11. Maintain green space, and increase large tree counts in the city.

Foreign labor

  1. Hiring of foreign labor to be simplified to cut off the middle men and corruption.
  2. Reduce human rights abuse faced by foreign workers.
  3. Set up mandatory savings(EPF?) for foreign workers in Malaysia to equalize hiring costs between Malaysians and foreign workers. Withdrawal allowed upon return to home country only or emergencies.
  4. Clear attainable pathway to citizenship for foreigners, with minimum 10 years residency, no criminal records, Malay language proficiency as some of of them prerequisites. May have to set a yearly quota for socioeconomic and political factors.

Miscellaneous

  1. Stronger anti-trust body, focusing on the food, vehicles, properties, construction material, banking, internet, medicine, payments and GLCs.
  2. Stronger commitment to open tender. No direct award above a certain threshold.
  3. Bigger equalization funds for Sabah and Sarawak.
  4. The government to release all public data on the internet in machine-friendly format.
  5. Abolish the death sentence.
  6. Limit outrider count for government officials and rulers. No outriders for private citizens. Outriders cannot be hired.
  7. No duration increase in patent/copyright protection.
  8. Jos soli citizenship.

I will add more if I have the time.

Categories
Economics

[2858] Household income growth and Malaysian unhappiness

Some opposition politicians and supporters are prone to exaggerate when it comes to economic matters. Malaysia is bankrupt, there is no income growth, etc.

Those exaggerations make it easy for the Barisan Nasional government to disprove those allegations. But in its eagerness to do so, the government oftentimes denies that any problem even exists. This is unfortunate because the exaggerations are based on real worries on the ground. And the worries are based on real problems.

This is true when it comes to income growth of Malaysian households.

The Department of Statistics recently published its 2016 Household Income Survey, showing Malaysian households experienced average yearly income growth of 6.8% in 2015 and 2016.[1]

Minister at the Economic Planning Unit, Abdul Rahman Dahlan, pounced on the fact there was income growth and that the growth was faster than the inflation rate. He said “this debunks the popular notion that income in Malaysia is stagnant or income increment does not match the rising price of goods and services.”[2]

While he is right about income growth, he does not quite address the cause that made so many Malaysians ready to believe in the opposition’s allegation. And that cause is decelerating income growth.

Yes, income rose. But it did not rise as fast as it used to be. This I think is one of the sources of Malaysian unhappiness.

While household income grew 6.8% yearly on average in the 2015-2016 period, this is dramatically lower than the 12.4% average yearly expansion experienced in 2013 and 2014. Indeed, it is lower than growth in 2010-2012:

The drop was felt by Malaysians regardless of exaggerations. GDP growth was not doing well either in 2015 and 2016.

I drew the chart based on 15 household income surveys conducted by the Department of Statistics since 1979. There were earlier surveys but it covered Peninsular Malaysia only. Sabah and Sarawak were covered beginning 1976. I chose 1979 as the starting point because I had trouble getting CPI data up to 1976.

(I have to add for clarity, in the 1980-1984 period for instance, it means nominal household income grew more than 10% on average yearly, not that income grew more than 10% between 1980 and 1984. Huge difference between the two.)

As a side note, this chart probably explains why Abdullah Ahmad Badawi became so deeply unpopular, despite starting out so well. Abdullah was the Prime Minister from 2003 to 2009 and income growth during his years was terrible by Malaysian standards. And 1997-1999 were years of unrest in Malaysia, coinciding with the Asian Financial Crisis.

I am not going into the debate whether the 2010-2014 growth and subsequent 2015-2016 slowdown were due to the government or external factors. But the stark slowdown is real and it goes a long way explaining why Malaysians are so unhappy now. Well, partly, because there are other factors out there that include among others, the GST and those private accounts at Ambank.

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

[1] — The Department of Statistics actually reported the average growth as 6.6% yearly, not 6.8%. The 6.6% is calculated by using natural log. Given the context of the publication, I find the use of natural log as inappropriate and prefer to use compounded growth formula instead, which gives out 6.8% growth. What is the context? Percentage growth. Malaysian household income grew to MYR5,228 in 2016 from MYR4,585 in 2014. Using 6.6% as the growth rate in this context (MYR4,585*[1+0.66]^2) will not get you MYR5,228. But 6.8% will. The 6.6% figure would be right, if the Department had stated it was measuring the log difference, instead of percentage growth. Yet, the context is percentage growth, not log difference. I see the press keep on using the 6.6% in the wrong context.

[2] — “In terms of real value, median monthly household income grew at 4.4 percent, which means the Malaysian household income grew faster than the inflation rate of 2.1 percent for the past two years. This debunks the popular notion that income in Malaysia is stagnant or income increment does not match the rising price of goods and services,” he added. Abdul Rahman said for the overall incidence of poverty, it had improved from 0.6 percent in 2014 to 0.4 percent in 2016. [Bernama. Minister: Household income statistics show strong GDP benefits people. Malaysiakini. October 10 2017]

Categories
Economics

[2857] Bruce Gale is wrong on GST, income tax and tax avoidance

Bruce Gale wrote a piece in the Straits Times defending Najib’s economic policy recently.

While I do agree with on points like subsidy removal, I have several issues with the article. The one I take the most exception is his claim that the goods and services tax (GST) was needed because Malaysians were avoiding income tax, and went on to cite a figure, which context he did not quite understand, as a proof.

In his own words, the “GST, this was necessary in order to force the middle class to share the tax burden. Tax avoidance in Malaysia is a serious problem. Only one in 10 people actually pays income tax. This is significantly lower than in many other middle-income countries, and far lower than in the high-income economies Malaysia says it wants to emulate.”[1]

I do not oppose the GST and in fact I think it is a necessary tax reform. Malaysia needed to diversify its sources of government revenue and the recent collapse of energy prices proved that. But Gale is wrong when he linked tax avoidance with the fact that only one in 10 people paid income tax.

He is wrong because a majority of Malaysians do not pay income tax due to a different factor altogether.

First, his statistics are possibly outdated. The one in 10 persons figure was true at some point but by 2015, the figure was closer to two in ten. The head of the Internal Revenue Board was reported in June 2017 stating “18% of the population paid taxes” in 2015.[2]  I tried to find the actual figure from a primary source instead of through newspaper reports. But even the annual report of the Internal Revenue Board does not share the total number of individual income taxpayers. It is a difficult number to pin down.

Second and more importantly, the reason behind the low ratio is not tax avoidance. Rather, it is due to the high income taxability threshold relative to the Malaysian median income. Malaysians do not make enough to qualify into the lowest income tax bracket.

The 2014 Household Income and Basic Amenities Survey published by the Department of Statistics shows the median household income in 2014 was MYR4,585 per month. With an average two breadwinners in a household, that would translate into a median of MYR2,293 per person. That means half of all Malaysian income earners earned less than MYR2,293 per month.

Couple that with the fact Malaysians would only be eligible to pay income tax in that year once they made at least MYR2,500 per month.

We can be more exact than that. Based on the same survey, I estimate about 55% of Malaysian income earners were no eligible to pay income tax in 2014. It is an estimate because the survey expressed its results on household basis and I would have to convert various figures into individual terms. I can show you the estimated individual income distribution by brackets (groups in red were not eligible to pay income tax that year):

The large share of those who did not qualify to pay income tax in 2014 could probably be seen better in the following cumulative function chart:

And this is before the typical tax breaks provided by the government: all Malaysians get an automatic MYR8,000 annual relief, or MYR667 monthly. This alone meant about 60%-65% of total Malaysian income earners did not have to pay income tax in 2014. That tax break has since been raised to MYR9,000. There were other typical breaks — books, medicine and even the Islamic tithe — granted by the Malaysian government that raised the number of those who did not have to pay that year to very possibly close to 80% if not higher.

Tax avoidance is a problem in Malaysia. But it is not the top reason why only one in ten (or the updated 2015 figure, two in ten) pay income tax. Other factors pale in comparison to eligibility concerns.

And even if they did not pay income tax, the same majority already paid sales and services tax prior to the introduction of the GST. To say the majority avoided tax when only a minority did so is not only wrong, it is insulting to every honest working Malaysians.

And do you know who do not pay tax? Those benefiting from donation.

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

[1] — Bruce Gale. Najibnomics has been good for Malaysia’s economy. The Straits Times. September 1 2017

[2] — Sabin said that based on 2015 figures, 18% of the population paid taxes in Malaysia. He said the threshold of taxability was generally quite high, therefore a significant number of the population falls outside the tax bracket. [Jagdev Singh Sidhu. Higher revenue for IRB. The Star. June 5 2017]

Categories
Politics & government Society

[2856] The police should release arrested Rohingya protesters

The Rohingyas in Kuala Lumpur had a small public protest at Ampang Park today. The Rohingyas were protesting against the latest rounds of atrocity committed against their community in Myamnar.

The Malaysian police broke up the demonstration and arrested quite a number of the participants.[1] The police should release them.

It is disheartening to see the treatment the Rohingya protesters received from the Malaysian police. The police should have been lenient with them, and allowed the demonstrators to disperse peacefully without arrests.

They are treated badly in their own country. Raped and murdered. Home burned. We do not need to be as harsh as we have been on them.

In December, Prime Minister Najib Razak held a political rally supporting the Rohingya minority, together with his Umno and Pas friends. The arrests show the insincerity of this government, using the Rohingyas cynically for election brownie points. The government can prove that is untrue by releasing the protesters without pressing charges.

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

[1] KUALA LUMPUR:Hundreds of ethnic Rohingya   to the Malaysian capital of Kuala Lumpur on Wednesday (Aug 30) demanding an end to the bloodshed in Rakhine.

[…]

More than a hundred protesters were arrested by police for assembling illegally and obstructing traffic at midday in downtown KL. Another 20 protesters were arrested for alleged immigration offences. [Rohingyas protest in KL over unrest in Myanmar. Channel NewsAsia. August 30 2017]

Categories
Society

[2855] Improvement TnG must make to create better train commuting experience

The use of Touch ‘n Go (TnG) payment system as the sole cashless payment option for KL trains, specifically those operated by RapidKL, in my opinion has been unnecessary. TnG is inferior to the native cashless system that RapidKL had previously.

Prior to the full migration, the trains accepted multiple payment options, but the superior method to me was the native cashless payment. Topping-up was easy and free. It was hassle-free relative to having to use TnG cards. In case of any problem with the native payment system, the station attendant would be able to help out the users almost immediately. Even the problem would be solved quickly on the spot. In contrast, trouble with TnG cards would require users to put in extra effort to reach out to TnG and their vendors, and their customer service takes time to respond to you.

Unfortunately in July-August 2017, the superior option was phased out in favor of the TnG cashless payment method. The official reason for the migration is most mind-boggling. The whole RapidKL network— the monorail, the LRT, the MRT and the buses — needs to phase out the native cashless system because after billions of public money spent on the MRT, the new MRT line has troubles processing the native cashless system.

But hey, it could process TnG system just okay. Why is that?

Instead of making the MRT line integrated into the existing widely usely system, the whole train network has to be integrated into underused MRT’s line and with weak payment method.

I have yet to come across the explanation the MRT payment method is that bad, and how that was possible. It feels like somebody overlooked the payments side. Just saying the MRT could not accept the native cashless payment and so, the migration had to happen is not enough. There has to be an explanation why the MRT payment method is that bad. It is either somebody overlooked it, or the system has been captured by special interest.

But the train has moved on and missed a station.

So, rather than moving back to the old system and possibly incur additional migration cost (I do not know whether the TnG system is cheaper than the native cashless system for RapidKL to operate; this is something to watch out for), I think the better way now is to improve the current system.

Here is a list of things I would want to see happening soon in order to improve train commuting experience for everybody, except for Najib Razak:

  1. Place TnG reloading machines at all train stations. At the moment, most stations do not have the machines, which offer free top-up services. This forces users to go to other places to reload and incur top-up charges (imagine, being forced to use TnG and then having to pay fees to top-up). In contrast, all stations have many machines that could process the native cashless payments (and even so, places like KLCC had trouble keeping the lines short: imagine the situation with TnG now). Furthermore, all those native machines have now been rendered unnecessarily obsolete by the full TnG migration. How much money has been wasted? Sounds like a job for the Auditor General.
  2. Have more than one machine at all stations. One would have thought for such a high volume traffic network, TnG would place a lot of machines for train users. But no. Even at KL Sentral, the hub of the city’s transportation, I could spot only 2 or 3 TnG reloading machines. The limited availability of the machines, which forces users to top-up at other places like 7-Eleven and incur top-up fee, makes me suspect this is intentional. It feels like a classic rent-seeking exercise, which possibly a case Malaysian Competition Commission should look into (I am toying filing a complaint. I have read the submission guidelines and it is not that hard to digest).
  3. Upgrade the reloading machines to process commands faster. Right now, it takes several minutes to complete a transaction. It is slower compared to RapidKL’s machines, which by the way, are now underutilized and processing cash payments only. One would operate the old native machines for cashless transactions like this: you touch the screen, insert cash and go. It is possible to do this under one minute unlike the so-called Touch ‘n Go machines, which require the patience one would reserve for a dead turtle.
  4. Upgrade the reloading machines to enable it to give refund at point of sale. The slow inadequate TnG machines could only receive cash. There is simply no slot to spit out cash. In case of failed transaction, no refund is possible. For refund, users would have to contact TnG customer service over the phone and such response does not happen immediately. I have been waiting for nearly three hours to get a refund. I complained to the station attendant, who redirected me to TnG’s external vendor. I have also complained to TnG and demanded my refund, which they later redirected me to the same external vendor. The vendor has yet to reply to my request. In contrast, the whole refund process would happen immediately under the old system, because refunding is possible at the point of sale. Transformation indeed.
  5. Until these suggested improvements have been made, TnG must suspend top-up fee charged at other top-up locations. Top-up should be free from the time being.

Suggestion 1-4 are investments TnG should have made when it knows it would be the sole payment option for the high-volume traffic train network. TnG clearly has underinvested in its infrastructure, happy to take in revenue it does not deserve.