Wednesday, September 16, 2009

Don't just generate hot air. Do something!

I’ve spent a year now on community service. When I quit my full-time job, it was with the intention of spending more time with family and focusing on doing things I enjoyed. However, MP Tony Pua persuaded me to lend a hand for a better Malaysia.

So, I helped to craft the privatize PLUS proposal, which the MCA subsequently decided to support and now the Barisan government under PM Datuk Seri Najib has commissioned a study on Malaysia’s toll highways.

The DAP’s Alternative Budget is on its way, and if all goes well, my book The Budget: How the Government is Spending OUR Money will be published by mid-October. I think it’s a good informative read. Buy a copy and tell me if you agree ; -) It’s not all boring financials – Antares (formerly known as Kit Leee) is working on the illustrations. Mail orders also possible - please send an email with your name, address and phone number to econs@chichang.net. Publishers REFSA will contact you just before the book hits the shelves.

Along the way, I also started this blog, helped in explaining the extent of the Port Klang Free Zone (PKFZ) debacle and worked on other odds and ends …

With that, it’s time to go back to paid work. Circumstances change, and a steady cash flow stream would be nice again. Senior managers at statutory bodies may not know what cash flow is, but the rest of us hard working Malaysians fully understand its importance. No cash flow = no money!

All my work was done pro-bono. The only expense claim I’ve made is for one return (Firefly) flight to Penang. All other expenses such as fuel, toll and parking charges and telephone and other bills I paid myself. No donations came my way, and certainly no trips to Disneyland or private jet flights! I would likely have justified a nice, tidy sum in consulting fees if I’d been hired by the government, but that’s the way it is … In the meantime, hats off to all the dedicated staff and volunteers I’ve met.

As for the people who continually gripe about the state of our country, our education system, the crime rate, our politicians .… We get the government we deserve. If you want things to be different, contribute, whether it be in time, effort or money.

Today is our nation’s birthday. Don’t just sit around spouting hot air. Resolve to do something productive instead.

Thanks for reading. This is the 99th and last post for a while.

Well it's all right, remember to live and let live
Well it's all right, the best you can do is forgive
- The Traveling Wilburys


PS: Just a reminder- PLUS can be privatized at zero cost to the taxpayer. It could be toll-free before 2020!

Tuesday, September 15, 2009

The Budget: How the government is spending OUR money

Finance Minister and Prime Minister Datuk Seri Najib will present Budget 2010 in Parliament on 23 October.

Every year, come this time, there is plenty of speculation about what “goodies” the government will “give” the rakyat. And every year, after the Budget is announced, there are the usual proclamations of “it’s a people’s budget”, “it’s people-friendly”, “it’s a growth budget”.

You may walk away happy with a small income tax cut, or on the fact that cigarette and beer taxes have not gone up. But there is much more to the Budget than just those few ringgit you saved.

The real “goodies” are hidden away from public view. RM47.8bn is being spent on education and training this year. That’s equivalent to RM8,000 for each student in public education. And yet, so many parents feel compelled to send their children to private schools or for private tuition. So, what happened to all that money?

Also, did you know we spend the same amount on defence - RM13.7bn – as we do on healthcare ? Do you think that is the right choice?

My upcoming book, The Budget: How the government is spening OUR money is a guide to how our government raises its funds and how it spends all that money. The federal government alone spends about RM200bn per year. On top of that, there is also spending by state and local governments. Do you think you got your money’s worth?

The first of its kind in Malaysia, this book explains in plain English where the federal government gets its income and what it spends it on. Interested citizens and taxpayers will find this an accessible read, while professionals will, for the first time, find the numbers compiled in a concise format.

Or, just buy it for the illustrations by Antares!

It’ll be in bookstores by mid-October. If you’d like to a copy delivered to you by mail, please send your name, address and phone number to budgetbook@chichang.net.

Publishers REFSA will contact you just before the book hits the shelves. Indicative price is RM25 + RM5 postage within Malaysia.

Wednesday, September 9, 2009

Headlines

The media shapes our beliefs and prejudices. It can be for the better, or for the worse, insidiously.

I was clearing a pile of old newspapers when I came across a few covering the time in February 2009 when wheel-chair bound Member of Parliament Karpal Singh was confronted by a group of UMNO Youth members.

Under a caption “Face of Fury”, the Star front-paged a picture of MP Gobind Singh shielding the disabled Karpal Singh from the strapping young men seeking to confront him. The New Straits Times said “Parliament Violated”.



Both headlines and the picture (from the Star) skirted the core issue: A mob of young men confronting a disabled MP twice their age could have been construed as an attempt at intimidation. Yes, they had their grievances. But couldn’t they have appointed one representative to present a memo to Karpal? Surely they didn’t need to feel safety in numbers?

Our government says the media has an undue influence on the young. So we have bans and restrictions on depicting Mat Rempit, effeminate men, long-haired males ….. In the same vein, the government and civic elders should display intolerance of boorish behaviour. Downplaying such antics foments a society where civil, reasoned debate is foregone in favour of might is right.

Media influence also extends to politics, of course. Here are headlines which could have been:

“Terengganu UMNO out of control” – remember the Mercs, the disagreement over who should be Menteri Besar and the on-going issues?

“Deputy Prime Minister Defends Disbarred Lawyer” – the UMNO candidate for Permatang Pasir

This is something easily addressed. If you agree the mainstream media has become unduly one-sided, stop consuming it. Don't buy the daily newspaper and watch less tv. Read independent news and good books instead.

Wednesday, September 2, 2009

Should the CEO also be the CFO?

The two most powerful positions in corporate management are of chief executive officer (CEO) and chief financial officer (CFO). The CEO is the boss and sets overall direction. The CFO controls the purse-strings.

Quite often good CEOs and CFOs will disagree. CEOs by nature and expectation have to seek new growth opportunities to expand corporate profits. They would tend to emphasise the rewards over the risks. CFOs are entrusted with financial stewardship. And when it comes to stewardship, being conservative and risk-averse are the preferred traits.

So, that’s how it works in the corporate world. No reasonable board of directors would countenance the CEO also holding the CFO position. There is just too much at stake to have one person holding the two most senior positions.

That’s also how it’s supposed to work in government. The prime minister leads and the finance minister tells him what the government can afford. Perhaps the most celebrated such pair in recent history was telegenic British prime minister Tony Blair and dour Chancellor Gordon Brown.

Over here in Malaysia though, no eyebrows are raised that the prime minister is also the finance minister. This practice began during prime minister Mahathir’s tenure, was continued by Abdullah Badawi and now Najib has continued the practice.

This might explain the deteriorating state of government finances. By 2009, we would have run 12 consecutive years of budget deficits. Our federal government debt alone is expected to reach RM414bn in 2009. This is more than double the RM206bn level nine years ago in 2000.

Put in other ways:
1. Federal government debt today is more than half the size of our entire RM741bn economy.
2. This is a burden that our youth will have to repay. The debt is equivalent to RM20,700 per person, based on about 20m youths (defined as Malaysians aged 39 and below.

Note that the actual debt burden is higher. The RM414bn number excludes debt incurred by other government-linked corporations (GLCs) such as PLUS Expressways and Tenaga Nasional. Other countries which have not embarked on extensive privatisation programmes incur road construction and electrification costs as part of their national budgets. PLUS and Tenaga alone among the GLCs have RM33.3bn of borrowings – equivalent to 8% to the federal government debt. On top of that, there is borrowing by other government-linked entities such as Syarikat Perumahan Nasional Berhad (SPNB), Putrajaya Holdings Sdn Bhd …..

Even more concerning is that we incurred the increasing debt even while we reaped the windfall gains from high oil prices. More in my up-coming book ….