People First, Really? Subsidies in Malaysia

Subsidies distort the allocation of resource. Sure. It artificially depresses prices below market level and hence consumption is artificially boosted.
The Malaysian government is now educating the people on the perils of subsidies on the nation's purse strings. No arguments about that - subsidies which eats up more than 15% of the country's federal government spending and that which continues to grow is not sustainable.

But wait a minute here - before the government preaches prudence and wise spending, it ought to examine its head on the way it is squandering billions of potential revenue as well as its insistence on subsidizing certain privileged quarters. Before asking the people to pay for what it is worth, it better look at why it is looking the other way when there is clear gross mismanagement and theft of the nation's federal funds.

Let's talk about the biggest "artificial" burden on the working population - price of cars. The price of cars in Malaysia is a big joke - high excise duties causes prices to be several times that of developed countries so that Proton can hide behind the protectionist walls. Every ringgit earned by Proton is simply a transfer from the people's pocket to the GLC's bank balance. Coupled with the free money printing presses in the form of AP's, the government foregoes hundreds of millions potential revenue so that a small group of politically-connected simply sit on their behinds trading a piece of paper for tens of thousands.

And where is all the talk about open tenders? It does not take a genius to figure out that open competition for scarce resources will bid prices up. The federal government, still saw fit to build another convention centre, apparently so that the people who can no longer afford petrol or sugar can congregate there to discuss their plight, by exchanging a piece of prime land without calling for an open tender. And the contractor who got the project happens to be the biggest beneficiary of the AP system. Why not extract full value of the land by calling for open bids? With more established and bigger property players around, why deprive them of the opportunity to bid while depriving the nation of potentially much higher premium for the land?

Do you remember the RM40 screwdrivers? Computers that costs several times that of the market price? Pens so expensive because it can write on its own? Building contracts that overshoot the initial budgets by hundreds of millions? Toll operators that enjoy guaranteed profits by raising the toll prices every now and then? Why on earth must the people, all 30 million of us, have to give up subsidies on essential items on petrol, sugar and rice while we are being rob by unscrupulous robbers who are never caught and who continues to enjoy easy wealth?

And recently a sports betting license was given out - another potentially hundreds of millions of revenue forgone because no competitive bidding was called for what is a guaranteed money making gold mine.

All this talk about People First is a farce. We taxpayers are asked to tighten our belts, but our hard earned tax dollars are not spend prudently. Why oh why the government find it so difficult to remove subsidies, whether direct on indirect on these few individuals/companies and continues to allow profligacy to be rewarded and not punished, but expect the people to understand that the money that we pay in taxes cannot be returned to us in the form of subsidies?