None of the people I’ve met since the 2009 Budget was revealed has anything good to say about it. It was definitely not a “caring budget” (as claimed by PM Abdullah Badawi) and the 1 percentage point income tax cut does not translate to something that you should shout about considering the current high inflation. Sure, employees’ transport allowances are made tax-deductible but seriously how many of you enjoy such benefit in the first place? There’re huge differences between short-term sweeteners and long-term solution to address economic fundamental flaws.

As much as I hope the 30-points stock-market rally after the budget announcement could sustain, I would be lying to say that the gloomy days are over and the bull should be charging from now onwards. Bloomberg reported Friday that the widening budget deficit is putting the country’s credit rating and currency at risk, thanks to Badawi’s record RM208 billion budget for 2009 despite his earlier promise to cut Malaysia’s budget deficit from 4.8 per cent in 2008 to 3 per cent of gross domestic product by 2010.

There wasn’t anything in the budget that suggests the government is taking the bull by the horn to tackle the inflation problem. Of course everyone hope the RM35 billion proposed to improve public transportation from 2009 – 2014 would materialize this time around although many think a huge portion would most probably evaporate due to leakages. The fact remains that the damages as the result of the 41% increase in fuel hike recently is beyond repair and this budget has done very little to help the people affected. The long-term effect is more damaging than the current Hurricane Gustav.

After three years Hurricane Katrina created havoc and sent the oil prices to the roof, the eye of Hurricane Gustav made landfall near Cocodrie, Louisiana about 10:30 a.m. ET. Oil production in the Gulf region was shut down with President George Bush rushed for Texas to monitor emergency preparation. Although the Gustav weakened to a “Category Two” storm, water surge of up to 14 feet is enough to bring life-threatening flooding. Property damage from Gustav could total $8 billion or just 25 percent of Sunday’s estimate of $32.8 billion. Fortunately the earlier worries on damage to drilling rigs and refineries eases with crude oil for October delivery fell as much as $4.83, or 4.2 percent, to $110.63 a barrel in electronic trading on the New York Mercantile Exchange.

Now that the Hurricane Gustav has made its landfall, all the eyes are waiting to see if the ruling government led by Badawi would expedite Anwar’s fall by rushing the silly DNA Bill to put the opposition leader behind bars. Judging by the government’s stupidity in breaching the MSC’s Bill of Guarantees with its recent crackdown on bloggers, it appears the desperate government would resort to anything just to cling to power. With 16 more days to go, it won’t kill if you just wait on the sideline to see if a new government could indeed be formed (I doubt so), would it?

Other Articles That May Interest You …

• Crackdown on bloggers’ websites? Stop the Stupidity
• Forget about oil prices, it’s the Inflation you should worry
• Will Oil Refineries Spared This Year?

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September 1st, 2008 by financetwitter

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