IPOH.com.my Photo Gallery BIZ Net My Classifieds Property Maps Car Mart Hotjobs2u.com

Google
Web ipoh.com.my

Hot JobsMy ClassifiedsBidValley AuctionsIpoh DatingAutomobileIT NewsPerak WatchReal Estate
Go Back   Ipoh Community Forums > Bangsa Malaysia > Bangsa Malaysia
User Name
Password
FAQ Googlemap ME Vb Music Members List Calendar vBRadio Search Today's Posts Mark Forums Read

Bangsa Malaysia Berikan pendapat anda bagi mewujudkan BANGSA MALAYSIA!

Reply
 
Thread Tools Search this Thread Display Modes
  #1  
Old 04-11-2010, 05:16 PM
fortune fortune is offline
fortune
Durian - The King
 
Join Date: Sep 2007
Posts: 11,214
fortune is on a distinguished road
Send a message via Yahoo to fortune
Default What is Govt own money ?

Private Money, Taxpayer’s Money, Government’s Own Money & Stuff

By Syed Akbar Ali

There seems to be some confusion over what is taxpayer’s funds, private money, Government’s own money and stuff. The confusion seems to be with the Government and the GLCs.

The Government does not own any money. This is Rule No. 1. There is no such thing as Government’s own money. All Government owned money is taxpayer’s funds. Even for countries which do not have income taxes, it is still public funds. The peoples’ money.

I hope the Cabinet Ministers are clear on this concept. Even if the Government borrows money by issuing Bonds, it is still taxpayers’ liability because eventually it is taxpayers’ funds that will be used to pay back the Bonds. And if the Government goes bust or defaults on its hutang, then the taxpayers’ role and their liability will become instantly magnified.

The people in Greece and Iceland have found this out quite rudely. If the Government gets into financial trouble, then they will have to raise taxes on the people, cut spending on public services for the people, increase other revenues and stuff to pay off the Government debt. Eventually the people pay for everything. The Government has no money. All Government funds belong to the people. This is the only rule everyone must remember, especially the Government. There is no Rule No. 2.

The recent 2011 Budget has raised some questions if the Government knows what is private sector and what is public sector, what is taxpayers’ liability and what is not.

First of all lets be clear about the Government Budget. The Federal Constitution provides that once a year the Government must table a Budget to the Parliament for its approval.

“1.1 FINANCIAL PROCEDURE
The Yang di-Pertuan Agong (King), as the repository of the executive authority of the Federation, is charged with the management of all public funds of the Federation. In the exercise of these duties the Yang di-Pertuan Agong acts with the advice of the Cabinet and on matters of finance through the Minister of Finance (Treasury) who is statutorily conferred with such powers.

The Yang di-Pertuan Agong through the Minister of Finance makes known to Parliament each year the financial needs of the Government which are then granted by Parliament from revenues raised from taxes and other sources. No tax or rate can be raised nor any expenditure made without the authority of Parliament.”
You can read more about this here. Surely then the Budget must involve affairs of Government only.

Hence I find it quite odd that the Minister of Finance has mentioned a listed private company in the latest Government’s Budget. The Karambunai Resort is a listed company that is 43.9 % owned by a Tan Sri Chen Lip Keong, who also owns gaming company NagaCorp, which is listed in Hong Kong and operates a casino in Cambodia . All this has come out in the media already.

Karambunai has said that its property was included in the Budget 2011 speech “after its Nexus Karambunai Hotel general manager attended the Performance Management and Delivery Unit-driven national key economic areas tourism lab together with other members of the private and public sectors.”

And this is a company whose “quarter ended June 2010, the company continued to remain in poor financial health, suffering losses of RM14.39mil from a previous loss of RM14.62mil.”

I am wondering, if I had attended the Performance Management Lab would it be possible for my jewellery business to be included in the Federal Government's Budget too?

Is that how it works now? I too have a massive plan to create a whole new industry comprising jewellery entrepreneurs. Just “allocate” say RM1.0 Billion to me and I know exactly what to do. Ada padi semua jadi, ada beras semua deras, ada fulus, semua lulus.

Dato Seri Najib the Minister of Finance even mentioned that the Karambunai integrated eco resort will involve RM3.0 billion. Again I am quite perplexed - is the Finance Minister speaking on behalf of the Government or is he speaking on behalf of the private company? Who provides the RM3.0 billion?

What is more interesting is that Karambunai is a listed company whose shares are traded on the KLSE. Before making such momentous announcements in Parliament (which will certainly affect the company’s share prices) shouldn’t the shares of the company be suspended from trading or something? Isnt that the normal procedure? Where is that strange woman who sits over the regulator ?

According to media reports, even before the announcement in Parliament, Karambunai’s share prices went from 5.5 sen on Sept 21 to 18 sen in a matter of three days. That is a gain of over 200%. It has gone up even more now.

Dato Najib also said the Government will “give” RM100.0 million towards this project. This was said openly in Parliament and telecast live on tv. It is unclear what is the meaning of “give RM100.0 million”.

I do have a question : if for any reason the Government does not “give” this RM100.0 million, can the shareholders of Karambunai (especially the minority shareholders) sue the Government for breach of “live telecast from Parliament” promises ?

Over in the skyscraper corner, PNB has come out fighting to explain that they had plans since 2004 to develop the land they bought near the Merdeka Stadium. They say the 100 storey building is viable. PNB says they have the tenants to populate the 100 storey building. If so good. I really have no qualms if the building is viable. Please go beyond 100 storeys lah. 110 storeys pun elok juga - but only if it is viable. Here let the real estate professionals do the arithmetic for you.

PNB also says that they have their own funds to pay for the building. Fine. However PNB is not entirely a private company. It is set up and owned by the Government through the Yayasan Pelaburan Bumiputera. More importantly it handles public funds. Here is some history about its ASN scheme:

“To launch ASN, the Government instructed the Bumiputera companies (eg. PERNAS) and statutory bodies (eg.SEDCS) to sell part of their equity portfolios to the PNB at book value. Thus, it was reported that PERNAS had to suffer a substantial loss for the year 1982 because it had been forced to transfer more than RM 1 billion of assets to PNB. This government-imposed sale of assets resulted in serious opposition from PERNAS and other affected Bumiputera Companies”

So again, Government was involved and taxpayers funds were involved lah - from the very beginning. And PNB operates an "amanah saham" operation. In English its called a "unit trust scheme". The key word is "amanah" or "trust".

So when Tan Sri Hamad Kama Piah says 'we will use our own money' I think he is missing the point. Pak Tuan, you dont have your own money. Duit kami tu. I am an investor, so is my wife and so are my boys. Millions of Malaysians are investors in PNB's "amanah saham" schemes. Thats where the money comes from. PNB manages our money on "trust" or “amanah”. So please adopt the correct attitude about whose money it is.
PNB must also remember that the ASN and ASB investors are guaranteed the return of their RM1.00 per unit invested in the scheme. In other words, if PNB goes bust, the backstop is the Government, which means taxpayers funds again. So please spend the funds wisely.

I do not doubt PNB’s capacity to build and make a success of a 100 storey building. To a large extent PNB has avoided being part of the GLC fiasco that has been created by Khazanah Nasional Bhd. But dont be too sure about large scale real estate developments. Here is the very latest news (came out just a few days ago) about the Burj Al Khalifa, Dubai ’s tallest building in the world :

“Even with an address at the iconic Burj Khalifa, rents for residences in the tower are not immune from Dubai 's real estate crash. Indeed, nearly a year after it was inaugurated with a massive water-and-fireworks display, about 825 of the tower's 900 ultra-luxury apartments remain unoccupied, according to Better Homes, a real estatebrokerage in Dubai. The cost of renting a studio with floor-to-ceiling windows, marble fixtures and wooden floors has dropped to $1,815 a month from $3,025, while a one-bedroom apartment is available for $2,722 (it used to be $4,536), the brokerage says”

So let us not be too sure of such grandiose projects. It took some time to fill up the Petronas Twin Towers .

To conclude this walkabout - a well known tukang karut once told an apocryphal tale about a man who went to see the Caliph. The Caliph asked ‘have you come to see me on official business or private business?’ The man replied, ‘this is just a social visit by your friend’.

The Caliph immediately blew out the oil lamp provided by the Government and lit up his own personal candle instead. He did not want to use the Government's oil lamp for his personal business. The Caliph knew how to differentiate between public funds and private funds. I hope our people who are in charge of things understand this story too.

It is a great honour as well as a heavy responsibility to serve the public. It is not a free ticket to makan duit buta or to fill your own pockets with public funds or to be spendthrift with public funds. I hope our Government knows how to tell the difference between the two.
Reply With Quote
Sponsored Links
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump


All times are GMT +8. The time now is 01:53 AM.


Powered by vBulletin Version 3.5.3
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.
vB Ad Management by =RedTyger=
Copyright Ipoh-Online Sdn. Bhd. (411730-W) 2006