Instead of writing about just announced Malaysia’s 2011 Budget (*yawn*) I would rather spend some time writing about Apple Inc.’s (Nasdaq: AAPL, stock) earnings scheduled to be released on Monday, 18th Oct 2010. And if you’ve been investing the company’s stock or trading its options, get ready for the explosive earnings announcement. But then some said I should write something about the budget so here you go.
First of all, I’m not sure if you can call this 2011 Budget for the people. Probably a Pre-Election Budget or Mega-Project Budget or even The Last UMNO Budget would be more appropriate. Considering Najib administration is set to call for a snap election within 6 to 9 months from now, what better way then to stretch the budget to the include a 100-storey tower and throw the big figure billion and trillion here and there?
The budget is all about “Big Projects”, “Big Spending”, “Big Money”, “Big Contracts” and “Big Appetites”. It’s a clever budget politically though because in a worst case scenario whereby the ruling government were to lose power, at least all the cronies would have gotten their slices of cake. On the same note if the mega-projects theme previously played successfully by ex-PM Mahathir succeeds again in winning voters’ heart, the ruling government may get life extension.
1) Greater KL MRT Project
- Cost: RM40 billion, starting 2011 to be completed by 2020
- A more comprehensive and efficient public transportation is overdue but can we see transparency in project awards or the cronies will once again get to become main-contractors without having to do a single thing?
2) Warisan Merdeka 100-storey Tower Project
- Cost: RM5 billion
- To become the tallest and new landmark to rival Mahathir’s 88-storey Twin-Towers? Do we really need another tallest building or it’s just to serve the ego of an individual to boast that his 100-storey building is the tallest after all? Why not go for 200-storey instead *grin*?
3) Support for Corridors Project
- Cost: NCER (RM133 million), ECER (RM178 million), Iskandar (RM339 million), SCORE (RM93 million), SDC (RM110 million)
- The Corridor projects hypes have been trumpeted since ex-Badawi era and not much has been heard about the benefits except for continuously hundreds of millions of allocation to keep it alive.
4) Integrated Resort in Karambunai, Sabah
- Cost: RM3 billion with government’s contribution of RM100 million
- Again the popular question is: will there be a casino just like Singapore’s IRs? The RM3 billion project is still very sketchy. Either the RM3 billion figure if overblown to please Sabahans or the IR will ultimately consists of gaming business to ensure return on investment hence you can guess who are the cronies involved.
5) KL International Financial District
- Cost: RM26 billion
- Joint-venture between 1Malaysia Development Berhad and Abu Dhabi-based Mubadala Development Company to develop KLIFD
6) Multiple new Highways
- Cost: Multi-billions
- Ampang-Cheras-Pandan Elevated Highway, Guthrie-Damansara-PJ Highway, Pantai Barat-Banting-Taiping Highway
- The news that toll rate will not be increased for the next 5 years for 4 highways operate by PLUS was obviously a pre-election measure. The government didn’t disclose if by doing so will it will have to pay compensation (quietly) to PLUS.
7) Development of 1,084 hectare Malaysian Rubber Board land, Sungai Buloh
- Cost: RM10 billion, to be completed by 2025
- Employees Provident Fund to undertake mixed development
8) Service Tax to raise from 5% to 6%
- The fact that government delay the unpopular GST but raise the service tax instead shows that Najib administration is worry about a defeat should GST goes ahead. In order to replenish the coffer, the additional service tax was introduced. And now everybody pay more for a value meal at McDonald or KFC, not to mention Astro subscription.
9) Sales Tax exempted on mobile phones
- Unfortunately smart-phones such as the popular Apple iPhone 4 will not be affected.
Overall, the budget is boring and lacks the initiatives in helping the average-Joes to buy more with less. The buying power is already so low and yet what the government cares was to increase service tax and build empires for the current administration. If not for the worsening support from even the civil servants, the present government would not give the carrot of 90-day maternity paid leaves. As we move near the snap election, more money and contracts changes hands. If you listen to how Najib tried to drum for support at the end of his budget speech, you can read the worries between the lines.
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