Mixed feelings on Budget 2010

Budget 2010 was unveiled yesterday.

It is a so-so budget, but it is certainly better than Budget 2009 last year.

As usual, there is something to cheer for  and there is also plenty to sigh for .

The environmentalists would be cheering.. Tax exemption will be given for building owners to spend on renovations to acquire the Green BUilding Index (GBI) certificate.

As a person who care for environment, I view this as an important step, and a symbolic step for people to realise that the world has to go green in order for our posterity to survive.  (As to what is GBI, please go to this ACEM website. —  ONe such building is the the Mesiniage building outside Subang Jaya)

Then the EFP savings plan by self employed is also a good move, even the government contribution of a maximum of RM60 maybe too little.

The RM 500 tax relief a year for broadband is also a welcome move, but more can be done to improve the quality of broadband services in the country; Malaysia was rated to be 48 out of 66 countries in a recent survey. (Read my post ‘MSC nation in the bottom third’).

The 1% income tax reduction is pittance and will be easily be offset by the credit card charges . MOst of us who pay tax will be carrying cards, since in this modern world, cashless transaction is the norm, especially with the high crime rate, who wants to carry plenty of cash out? The government instead of taxing on each credit card, should only do so on the 2nd card onwards. Supplementary cards based on the first principal card should not be taxed either. 

If the government is serious in promoting prudent spending, it should make a ruling that only those with income above RM 3000 and above be entitled to a card, instead of , now, any Tom Dick and Harry can have one.. which have led to abuse of credit and many credit card debts and bankruptcy..

For those in the  middle class group like you and me, please beware that there will be a new motor insurance scheme starting middle of next year. ALthough We do not know much about this, be assured that car insurance premium is going to go up..

The 1 billion extra given to the Police is astronomical, but even so, I am willing to give them a  chance  if they can raise their productivity and  show results. Otherwise, it will be a big waste of money.

To be fair to the police, I will not comment now, and hope that they will utilise this extra 1 billion well to bring crime down and good order back to the people.  Hopefuy , they utiltise this to train and retrain the police force to make them more professionals and efficient and people orientated, and not just spend on fanciful hardware.. (pls read my post ” a gadget is only as good as thperson using it’)

One big question,even though the PM has slashed budget deficits from 7.4% this year to 5.6% next year, how is this budget deficits funded?

I have always maintained that to have budget deficits for so many years would not be healthy, and is like taking overdraft and building up debts and letting the future generations pay for them. The only way is to reduce our operating expenses, since it is so huge compared to the development budget.

Slashing operating expenses should be done by reducing the size of civil service and making civil servants more efficient and productive. There should also efforts aimed at reduction of wastages and abuses like what was reported in Auditor General’s report.

There is indeed a huge cut in the operating expenses this year, but  with the number of civil servants remaining more or less the same, the cut will probably come from cut in subsidy in food and fuel… SO expect a higher fuel and food price next year, and a higher fuel price will hit the middle class more than the rich. Apparently a new mechanism is being worked out…

Overall, nothing exciting, but one thing can be sure: the sycophants will be singing praises in the MSM these 2 days.

See my last year posts on budget 2009:(viewpoints still valid for this year ‘s budget)

worrying trends in our spendings