Budget 2011 is out. The most glaring point in this budget is that we are back to the so called infrastructure play. Billions will be spent on infrastructure. While this will help to push for economic growth, I have a feeling of deja vu, and a sense not unlike seeing ‘Back to the Future Past’.
This sort of spending will ensure many big companies getting billions worth of projects, and many of the not-so-big companies getting millions worth of subcontracts, and many of the small companies getting the crumbs.. We also need hundreds of thousands of foreign workers, since Malaysians have generally shunned being construction workers.
In the process of awarding contracts and subcontracts and subsubcontracts, everyone will probably be happy since there will be plenty to go round, like what happened in the 90s before the Asian financial crisis. Stock market plays based on rumours of getting contracts will be back again, and again many people will be happy.
However, the budget has not addressed the problems of preparing the nation and society for innovative change nor dealt with any structural changes.
While the MRT projects are necessary, even though I have certain reservations of the costs, the 100 storey building is totally irrelevant to propel the country towards a high income nation. To think that by building tall high rise, we can become a high income country is like thinking that a student can be a straight As one by just shifting the marking curve.
One lady minister was quoted as saying that since other cities are building the world tallest buildings, we should also do this. This is like after seeing people wear big hats, we also want to wear big hats, not knowing that our head may be too small for those big hats, and in the end, the big hat may even cover our eyes, making us losing our vision.
Furthermore, we already had the Petronas Twin towers , which is already among the tallest buildings in the world. We have already proven to the world that we can build high rise, why the need to do it again?
The 5 billions could have been used to build more schools and libraries , and improve on the quality of our teaching faculties in our universities, so that we can produce world class students, not graduates that cannot even write simple English letters.( I know of a 30plus dentist from a local U who cannot even write nor speak proper english; cannot even write a legible meeting minute).
The perennial problems of the biggest portion of the budget going towards the operating expenses have persisted, no thanks to our bloated civil service, and too many ministries/ministers and departments. Imagine, for every dollar government spends, 75% goes to just operating expenses, and only 25% can be used for development. It is like a company spending too much on its overheads, and too little on expanding its businesses or on R & D. This type of companies will slowly lose their competitive edge.
The 6% service tax on paid tvs means that middle class in the cities will be squeezed again. Those who subscribe the complete Astro package is now paying over a hundred dollars per month, and with the tax, they will have to fork out an additional 10 dollars at least. The 1% increase in service tax will be mainly borne by the urban folks too. It is not wrong to say tht life is really getting tougher living in the cities.
A young graduate living in urban areas now now needs to pay for ever increasing costs of living , plus to pay for handphones bills, plus internet service, and now, even eating out or having a drink with friends will be getting more expensive, not to mention the rise in petrol bills, the need to pay extra 50 dollars just to have a credit card…. The salary for a fresh graduates has however remained stagnant at around 1500-1600. Even if they do not eat out, and just eat bread and water at home, these 2 (bread and water) have become more expensive now than a decade or 2 ago.
The million dollar question in the whole ETP is this: How to get the private sector to invest, given that many companies have preferred to expand overseas.. With the decrease in FDI, and the lack of confidence of the private sector, the whole picture painted by the government is just too rosy..