Malaysians are never taught to plan for ourselves. When we are encouraged to save, the government created EPF for the private sector employees and basically put it to rule that every employee is to have 23% of his salaries into EPF as a savings. When we are to pump petrol, it does not matter which petrol station as all petrol stations have the same rate for RON95 for example. When we are to do financial planning, the take is that the money should be invested into PRS or some unit trusts scheme when many of the funds have yet to proof that they can be overperforming the market for a long period of time. Now, my question is, who is to decide for the people that unit trusts is to way to go. I have no complains as currently, I am happy to reduce my personal income tax and to just recently put RM3k into a PRS which I am not sure will perform.
(Let me put this test to you for your thoughts: name me one fund manager you know - other than the names of the fund management companies like CIMB, Public Mutual etc. as the ones that invests your money is the person not the company!)
Seriously there are incentives which should not be there and similarly, subsidies which should not be there as well. But yet, I am just wondering with first the petrol price hike of 20 cents, then the GST announcement which is supposed to be implemented by April 2015, and then the hike in quit rent for KLians, we are now burdened with hikes in electricity bill. Is it one hike too many at such a short period of time.
I can understand the logic behind some of these hikes (or reduction in subsidies) as I am (and still) supporting the GST implementation, but wouldn't it be one hike too many. As mentioned, we are never taught to be planning for ourselves. The government knows best mentality has been planted into the mind of the rulers or policy makers. The sudden hike in too many areas, I am afraid will just allow profiteers or businesses to increase the price of their goods hastily, out of greed.
A case in point, I had just visited a "yongtowfoo" store in Ampang, and to my surprise, the increase from the last time I visited (maybe a year ago to last weekend) was from RM0.90 to RM1.20 per piece i.e. more than 30%. Frankly, I am not able to figure out where did this come from, when we have yet to experience the real increase in electricity and GST as yet.
Price increase as we know can be a chain reaction. Petrol and electricity price increase may cause a lot of other stuffs to increase from food to transport to rental to construction and other related services as companies may need to increase salaries now beyond the usual threshold. Will inflation be a concern? We do not really need some of the fancy stuff like increase in BR1M or some of the tax incentives like the PRS.
I am baffled as it is again the government that decides they should be providing the RM650 to the above 60s, some monetary incentives to the youth generation, income tax savings which probably benefits a handful of fund managers only, while telling the general public that putting their savings into long term PRS is the way to go for old age. While trying to be the decider on where we should be saving and spend, it is not allowing enough opportunities to let the market decides. I feel that what we are really facing is that suddenly the government woke up one day and realises that the country has been living on too much subsidies, and furiously trying to cut that, but yet still trying to dictate many areas of our lives. On the other hand, the people are just not ready for the sudden reduction in subsidies, as we have been spoon fed for too long.