Worrying trends in our spending

The budget 2009 has certain good salient points.

Those who use less than RM20 a month of electricity would not have to pay. This is indeed good news to the hard core poor.

35 Billions will be allocated o improve transportation over the next few years. This is long due, as public traspor shold have been beefed up long ago, as an efficient public transport system is needed for increased mobility and exchange of goods and services.

Not enough is put into health services. WHO recommends that a country should spend about 7 % of its GDP on health. We are spenidng much less on that. This is because we are spending too much on our operating expenses, which have ballooned from 80 Billion in 2004 to 154 billion this year, and almost 100% increase over 4 years.

On the macro aspects, certain things are worrisome.As I have just mentioned,  the operating expenses is getting too huge and takes about 75% of the total budget whereas the developemnt budget gets about 25 %.

This is just like  a household that uses 75% of its income to pay its servants  and the running costs of the households and have only 25% to save for children education and investment and saving for old age, and part of this spending are borrowed from bank. There is a high chance that the household may go into financial difficulty. Similarly, in our case, the operating cost is too huge and increasing at too fast a rate for comfort. A major part of this goes to payment to civil servants. The civil service must be trimmed, with emphasis on productivity and efficiency.

Another worrying aspects is that government revenue is increasingly dependent on petroleum sector.. Revenue from this sector increase fro 37% to 46 %. So the question is , how do we sustain our spending if our oil eventually runs out in a decade or 2?

 To counter this , we have to increase our human resource development.  But  with brain drain becoming more and more serious, and more and more youngsters working overseas, are we able to sustain our present lifestyle and living standard once the oil and gas money runs out? What is being done to this?

The increase in spending results in a deficit budget. A deficit budget for a short period is acceptable to help  jump start the economy. But when year in and year out , we have deficits spending, out debts will accumulate and the yearly loan payment would be bigger and bigger. That is also part of the reason for the huge increase in operating expenses. SO we really need to be careful here. We cannot just try to be popular and spend beyond our means. We would only be passing the burden to our children.

Overall, i think what is needed is to stress on efficiency and productivity of civil service, cut down on unnecessary waste in running the government, and tackle corruption and abuses in administration. This alone could help us save a lot of money. The money saved from this operating expenses can then be channelled to human resourse development and other productive sectors so that when our oil money runs out, we would not be caught flat footed.

The best way to reverse brain drain and increase human resource development is to start  adopting meritocractic principles in civil services, universities and colleges  as well as GLCs. There is really no 2 ways about this.

We must look and think further ahead, as our oil resources will be finishing quite soon.

33 Comments (+add yours?)

  1. monsterball
    Aug 30, 2008 @ 10:58:14

    Yes Doc…you hit it on the nail.
    Unproductive staffs are all being kept….as long as they are die hard UMNO members.
    Our government is a government of government staffs…for UMNO..by UMNO and with UMNO.
    No thing else matters.
    Yes..six buses of such staffs went to Permatang Pauh from Malacca.
    CM there who declared UMNO will rule forever is doing his utmost best….all no work…full pay plus allowances..all from the so call Budget of this year.
    All our money.
    As a matter of fact…every sen UMNO is spending 95% are stolen from us…maybe 5% are collection from their members…RM1 per month.

    Like

  2. Kenny Gan
    Aug 30, 2008 @ 11:24:38

    This is why we can’t wait for another 4 years for Umno to be ousted as the Federal govt. or the country will be irreversibly damaged.

    Like

  3. Justin Choo
    Aug 30, 2008 @ 12:31:29

    Again, talk about change in lifestyle. This was what I wrote in Anil’s which he quoted in his blog:

    ” Makciks and Pakciks, kampongs and long houses, may be far away in the rural areas. You have not mentioned the retired people like me. No more active income. Some still got to feed grandchildren. I live a very, very simple lifestyle. No smoking, no drinking, no gambling, no womanising (too old lah, and also not rich!), always stay at home, eat small breakfast, and two simple meals a day, drive an old red “taxi” Proton Saga, and wear shorts and T-shirt, and slippers. What lifestyle to change? The only change is upgrade! Eat the most sumptious cuisine in fine-dining style? Savour fine wines and caviar, birdnest soup, abalone with scallops, baked lobsters drenched in the finest red wine. Fly to New York, Paris and London for shopping, etc…. How nice.”

    Like

  4. kittykat46
    Aug 30, 2008 @ 15:08:49

    There are no ideas for growing the economy.

    Much of the development budget will leak into the pockets of UMNOputras.

    Like

  5. A true Malaysian
    Aug 30, 2008 @ 15:57:21

    You are right, Dr. Hsu.

    If every year we have let say 4% deficit budgets, in 10 years time, such deficits will add up to 40% on straight line basis. (in compounded basis, it will be more than 40%).

    Such deficits, which financed by borrowings, if not controlled, will have very adverse effects on the financial position of our country as big chunk of our GDP are going to pay interest on borrowings.

    Such deficits can only be arrested by ‘prudence’ in spending, spend on productive means as what you described in your articles, and of course by elimination of corruptions, wastages.

    Managing finance of a country is more complex than a household like you and me, and yet such an important position is held by an ‘overworked’ PM who have no formal education in the field of finance or economics.

    One can argue that he is assisted by Finance Minister I & II, but the ultimate decision is still rest on PM.

    My opinion is, Finance Minister should be held by a ‘qualified’ economist or accountant rather than any Tom, Dick and Harry.

    Meritocracy, meritocracy and nothing else but meritocracy can make our country a better one.

    Like

  6. monsterball
    Aug 30, 2008 @ 16:08:46

    A malay clerk friend of mine was selling burgers at night.
    I asked him…are you working? He said yes…..but need to open makan stall from 7pm till 1am…to earn little extra.to make ends meet.
    Like I said….RM1000 is worth RM700 to support the family with essential things…just comparing with with months ago.
    Until and unless….daily essentials return to old prices..and only way..is oil prices reduced ….not little by little.
    They can increase by 79sen…why can’t they reduce it back by the same amount and even much more?
    I believe Anwar can do it..as he knows the root cause.
    Yes….UMNO does not know management….does not know productivity ….and keep killing us with their cover ups on lousy mismanagements….as they need to keep one million unproductive malays happy working..doing nothing….while they keep sucking up the profits of our god gifted oil revenue for their devilish agendas and personal benefits.

    Like

  7. patek1472
    Aug 30, 2008 @ 19:01:29

    Aku menangis pada Hari Merdeka.
    (I am Crying on Merdeka (Independence) Day.)

    1. Aku menangis kerana rakyat Malaysia telah hilang kegembiraan dan perasaan terhadap masa hadapan negara yang diimpiankan dan tidak seperti semasa Allahyarham Tunku Abdul Rahman melaungkan “Merdeka!”.

    (I cry because Malaysians have lost the joy and hope of a future Malaysia as wished for unlike the times when the late Tunku Abdul Rahman shouted “Merdeka”. )

    2. Aku menanggis memikirkan ada rakyat Malaysia sendiri yang bercakap, berfikir dan bertindak memecahbelahkan rakyat dengan penuh perasaan perkauman dan keagamaan masing-masing tampa ada perasaan kebangsaan dan kesahabatan.

    (I cry thinking of some Malaysians who talk, think and act to divide the citizens with their own racists and religious thoughts without a care for nationalism and friendships.)

    3. Aku menangis memikirkan ada rakyat Malaysia yang lebih mementingkan sendiri dari negara apabila timbul isu-isu parti, jawatan, habuan, kuasa, kawan, kesahabatan dan keadilan.

    (I cry thinking of some Malaysians who care more of themselves rather than the Nation when it comes to issues of party, posts, rewards, power, friends, relationship and fairness.)

    4. Aku menangis memikirkan ada rakyat dan keluarga mereka yang masih belum mendapat keadilan sewaktu dipenjarakan, ditindas, dirompak, diugut, didiskriminasikan dan tidak juga dibenarkan bersuara.

    (I cry thinking of some citizens and their families who have not obtain justice while being imprisoned, oppressed, robbed, threatened, discriminated and not even allowed the freedom of speech.)

    5. Aku menangis memirkirkan ada rakyat Malaysia yang masih hidup Kias Pagi, Makan Pagi; Kias Petang Makan Petang walaupun Malaysia sudah 50 tahun merdeka.

    (I cry thinking there are still Malaysians who still live from Hand to Mouth everyday, even though Malaysia has already achieved 50 years of Independence.)

    Posted at http://patek1472.wordpress.com

    Like

  8. A true Malaysian
    Aug 30, 2008 @ 19:14:42

    I found the blog of Perak MB’s wife.

    http://datinserifatimah.blogspot.com/

    Her profile is as follows:-

    Isteri kepada Menteri Besar Perak Y.A.B Dato’ Seri Ir. Haji Mohammad Nizar Jamaluddin. Ibu kepada 8 orang cahayamata. Pemimpin untuk wanita-wanita di Perak tidak mengira agama dan bangsa.

    ————–
    ‘tidak mengira agama dan bangsa’. I am impressed.

    Like

  9. yh
    Aug 30, 2008 @ 21:11:50

    dr hsu

    just imagine if oil price is US$30 tomorrow. the govt will not be able to reduce the petrol price as it needs the “extra tax” to fund the large gap.
    looks like this govt is digging a bigger hole and it will come a time when it would be too large for us to climb out.
    do these elite care afterall they own properties in down under , europe and US and loads of cash in tax-haven islands. Answer is very clear, isnt it, that the ordinary citizens are gonna carry the burden.

    Like

  10. A true Malaysian
    Aug 30, 2008 @ 21:37:42

    Dr Hsu and all,

    I just realise Justin Choo’s blog ‘Life Is Like That’ is fantastic and should be promoted to all kind of peoples.

    http://lifeislikethat999.blogspot.com/

    Thank you Justin for your noble thoughts.

    Like

  11. monsterball
    Aug 30, 2008 @ 21:46:55

    Obama said.in 10 years time..USA will not depend on oil.
    This means USA will be driving cars …..not depending on oil.
    If we do not act quickly…Malaysia will have so little income…from outside…we will be buying things 100 times dearer than now…with less income….making us..the poorest country……in ASIA.
    UMNO top guys will all migrate to Australia…Canada..England..and elsewhere….treating us like suckers.

    Like

  12. monsterball
    Aug 30, 2008 @ 21:50:07

    They are actually doing it ….right now.
    Favourites are Australia and England….where they have homes and properties.
    They always fly first class…so you seldom see them.

    Like

  13. Dr Hsu
    Aug 30, 2008 @ 23:36:20

    A True Malaysian, from his writings , you can sense that Justin is a simple person , philosophical, good hearted. His 2 blogs should be promoted. One you have listed, the other is in my blogroll.

    Like

  14. A true Malaysian
    Aug 30, 2008 @ 23:51:37

    Ya, it’s true. Being simple is nice, and will not go wrong for being simple. I quote below one of Justin’s comment that impressed me, and should be used as a guide to all :-

    “If we can consistently keep our cool (which I find it to be very difficult), others will eventually come to respect our good qualities.”

    I think he is just being humble to qualify himself by saying “which I find it to be very difficult”.

    Like

  15. romerz
    Aug 31, 2008 @ 01:48:02

    I’ve met Justin before and I’ll say that he is every bit of goodness that he writes.

    He, more than anyone here can truly claim to be part of the silent majority.

    It would be wise to pay attention to him when he speaks.

    Like

  16. monsterball
    Aug 31, 2008 @ 02:14:26

    Glad everyone agrees about Justin.
    Almost everyday….I sms teasing him…urging him to talk to me.
    He is all good.
    Yes..his blog shows how versatile he can be.

    Like

  17. monsterball
    Aug 31, 2008 @ 06:15:01

    Good Morning to all!
    Today is first day of puasa for muslims.
    What does it really mean?
    Hope a muslim can explain.
    All I know is to suffer for awarenesses….to feel for the less fortunate who have nothing to eat….to abstain from eating..smoking…drinking….even sex…as a control of the weak minds wanting them.

    Like

  18. folo4
    Aug 31, 2008 @ 09:18:17

    Fasting on Merdeka Day?

    that would explain the lack of festivities.

    So, what defines Operating Expenses?

    Like

  19. monsterball
    Aug 31, 2008 @ 13:29:41

    I watched the Merdeka Parade on TV and noted not one opposition party member was there.
    I noted one or two yawning…..feeling bored.
    I noticed the crowd is much smaller that previous…..and TV.. dare not zoom in like before to show various races. I noted only malays ….not even .. foreign tourists….like before.
    I remember BERSIH walk…we filled the walking place from one end to another…even right to shops corridors…..100,000 strong.
    I recalled at least 45,000 were at Merdeka Stadium with Tunku…and at that time..our population was around 7.5 million.
    I can see..not more than 3000 spread out to watch the Parade. Based on 27 million population…right now….this is clear signs…. majority Malaysians ..do not support UMNO.

    Like

  20. Justin Choo
    Aug 31, 2008 @ 15:35:20

    Hi all you good people,

    It’s strange that of all days, yesterday I did not have time to be with my trusted friend, the PC. And the evening had to spend time with my granddaughter at the Botanical Gardens. When I came back I spent all my time writing the post on “My Revered teacher”. So here I am again.

    I thank all of you for all the nice words. If everybody can say such nice words to one another, I bet Dr Hsu will close his clinic because no one will get sick. You know sickness is mainly caused by a distressed mind. When Monsterball started cursing me, I felt sick and kept quiet. That really hurts. I think he didn’t know that I was joking. As I said in my blog, I am just an old man trying to get some attention by being witty, and ended up like a fool. Another lesson learnt. We must be very careful when communicating. Sometimes people misinterprete and get offended.

    Like

  21. A true Malaysian
    Aug 31, 2008 @ 15:55:51

    Another quote of Justin Choo :-

    “It is the individuals who make up a society. If individuals have good values, the society will be reflected as such. As Buddhists, we are very conscious of spreading goodwill and showing compassion for all. We are taught to live in peace with ourselves as well as with others. ”

    I said before, all things start with oneself, you get what so sow.

    Like

  22. monsterball
    Aug 31, 2008 @ 16:27:35

    hi hi Justin….tell me …all the details…what did you say….and how I cursed you..that Got you sick.
    I need to have those words…get ready to curse anyone again. Maybe..that will give Doc …..more patients……hahahahahaha

    Like

  23. monsterball
    Aug 31, 2008 @ 16:31:52

    And back to serious stuffs…concerning what true Malaysian has quoted Justin’s wonderful quotation from Buddhist books….bottom line is….
    Be good hearted with no selfish ulterior motives in what you say or do….but say or do benefiting others….most of all.

    Like

  24. monsterball
    Aug 31, 2008 @ 16:34:28

    However…if you curse and swear on one ..with no intentions to get him/her sick…..it’s ok.
    Each person has their own ways to put out his/her points.
    It’s how good hearted and generous you are that counts.

    Like

  25. Dr Hsu
    Aug 31, 2008 @ 17:28:09

    Today is the 51st merdeka day. I did not put out any post because there is really nothing to celebrate this Merdeka.

    Let us just have a quiet rest at home and with that, may be we can get a clear mind to think of what the future holds for all of us in Malaysia.

    Like

  26. monsterball
    Aug 31, 2008 @ 18:00:35

    Perhaps you can give us an adult education….such as how many times can a man have sex..before his sperms dry up.
    I posted this at romerz’s blog…no response..but got one visitor angry..saying I talk filth.
    I put it out at Justin blog…that holy holy guy…..refuse to talk sperm matters.
    Actually……I am trying to educate the youngsters….not for me.

    Like

  27. romerz
    Sep 01, 2008 @ 00:33:56

    monsterball,

    I didn’t respond because I was not offended by your joke. In fact I gave myself a wry smile as I knew where you were coming from.🙂

    Like

  28. monsterball
    Sep 01, 2008 @ 04:12:55

    DOC! Teach us how to use our sperm.

    Like

  29. monsterball
    Sep 01, 2008 @ 08:56:26

    hi Doc! …Romerz …or anak malaysia or true malaysia …said something..you put out a post.
    Why not put out a post …saying.. “monsterball said 5000 shot of sperms is all one have”…then give your expert medical advices.
    You promised “chicken” post..all forgorten!!

    Like

  30. monsterball
    Sep 01, 2008 @ 09:04:19

    ah yes…Romerz..I came from my mother’s womb..to be with the chicken…into the gutter.
    But somehow…somebody up there likes me..picked me up…and able to sleep at the playboy hotels cum casino with lots of chicks…of all sizes and shapes and heights……to squeeze every dime you have.
    Yip!!…you sure know me.
    I trully fed alot of slightly used virgins…that need financial help.
    Now you lucky guy…born with a silver spoon in your mouth…never have to worry for money…or suffer at all. ..yet grown up..still getting free milk all the time…until you had enough.
    Life is not fair!!

    Like

  31. monsterball
    Sep 01, 2008 @ 10:00:53

    Sperm have been the downfall of many great men…the joy of millions of women.
    Sperm is the biggest money spender…causing child birth ..giving endless challenges in life to the one who let go the sperm to his beloved wife.
    Sperm can move mountains….yet can move one into jail…if he let go by force to one…who does not want it.
    When sperm are accumulated…not in use….one must be like a monk…can let go…with no sinful thoughts.
    But by those that have weak minds….only way is the natural way…to masturbate!!
    By those with power…can rape or ask one to get them out….or be C4ed….!!
    Women are incomplete and unfulfilled……..without sperm.
    Millions of helpless poor women support their families….by being sperm expert extractors.
    Men simple pay billions everyday..to get it out!
    Do you think Doc…medical exam…cove4r this subject? NO ….NO …NO.
    This is my original parted with loving care for youngsters……..so learn…..hahahahahahaha

    Like

  32. romerz
    Sep 02, 2008 @ 00:48:10

    Dr Hsu,

    Din Merican posted an article by Foong Wai Fong which had these lines in it which attracted my attention.

    “Dubbed the “People’s Budget,” it is all about spending, spending and spending more.”

    and

    “Don’t spend our Children and Grandchildren’s Future Away.”

    Worth a read.

    http://dinmerican.wordpress.com/2008/09/01/badawis-budget-2008-ignores-the-private-sector-growth-engine/

    Like

  33. Trackback: mixed feelings on BUdget 2010 « Dr. Hsu's forum

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