The country needs a U-turn

I read a piece on the PM accusing the opposition of making many U-turns, suggesting that U-turns are signs of inconsistency and lack of resolve.

Well, I think we need more than the opposition suggesting U-turns. This country is in dire needs of making a U-turn before it reaches a point of no return.

We can’t justify the Goods and Services Tax (GST) by first digging ourselves a big hole. Is this not what we are doing?

For the first 50 years of this nation’s existence, Malaysia did not have expansive value-added taxes such as GST but the country was able to get by relatively fine. The country had its ups and downs, but by and large, government finance and cost of living were manageable. The surpluses of good years were used to cover the deficits in bad years.

Now, let’s look at the situation in recent years. The country has been constantly and perpetually in deficit since 1997. We just can’t fill up the hole, notwithstanding RM50 billion from GST.

If we can’t manage our expenses, no amount of revenue would be sufficient. This is the cardinal principle of financial management. Label me old fashion if you like, anti-cyclical spending, as the name implied, is only applicable periodically when the economy needs a boost. If we have perpetual deficits, that is structural problem, not a cyclical issue. This is the state Malaysia is in now - the government is too big.

It is time for the country to make a U-turn on indiscriminate and unproductive spending. We do not need the RM50 billion GST revenue to meet new expenses as argued; we need to trim, rationalise, prioritise and stop our profligate ways.

Otherwise it is imposing more burdens on the productive sectors on one hand and creating more dependent and unproductive sectors on the other. If we are not careful, the end result is to kill the goose that laid the golden eggs. Right now, the goose is already half dead.

We have heard ad nauseam GST is used to finance essential public services and welfare spending. I think this is debatable. It is time to tabulate all the expenses on welfare and public services vis-à-vis expenses on pomp, grandeur and pageantry. Get rid of the Performance Management and Delivery Unit (Pemandu), one third of the civil service and half of the cabinet ministers will not do irreparable harm to public service. It may just do us lots of good.

I think we can’t go on as usual. We need a new model in public finance. We can’t spend senselessly and then justify it with GST as our ‘saviour’. This is unsustainable and unthinking.- Mkini