KUALA LUMPUR: The opposition’s goal to abolish the Goods and Services Tax (GST) will cause the government to lose a huge income stream.
According to a statement by the Centre for Research Advisory and Technology’s chief executive officer, Ng Yeen Seen, since Petronas is not as formidable as it was in the 1980s, 1990s, and the first decade of the 2000s, the government will have to find alternative income sources.
“Privatisation will be increased to sell more assets to “friendly parties” via cheap loans guaranteed by the government.
“The national debt will go up like it did in the 1980s and 1990s. Remember the debt-to-GDP ratio back then?” warned Ng.
She said without GST, government employees will also be retrenched to work with corporations which are already overburdened with high labour costs, with many moving overseas especially the Chinese tycoons.
“So privatisation to cronies to hire these government servants will make sense.
Crony capitalism will return where indirect taxes in other forms like in the 1980s and 90s will return.
“Think about it, with the oil subsidy in the 1980s and 90s, the price of petrol at the pump was three to four times the price of Brent crude oil.
“Now, without the oil subsidy, the price ratio of pump to Brent is only 1.3 times.
“If the opposition wins, they will gloss over taxes and call it a subsidy to hoodwink the rakyat,” she added.
With the abolishment of the 1Malaysia People’s Aid (BR1M) Ng said, the B40 people (those in the bottom 40 per cent of income) “would be encouraged to work hard and be thankful to newly privatised companies.”
“But this would backfire when privatised companies will have to keep costs low and our high income nation dreams will be destroyed.
“Foreign workers will return as in the 1980s and 90s to compete with locals. Industry 4.0 modernisation, which the whole world is going through, will not happen in Malaysia,” she added.
She explained that if the opposition comes into power, all the China projects (ECRL, TRX, Country Garden) would be halted and Malaysia would be sidelined from One Belt One Road.
“China will buy more palm oil from Indonesia rather than Malaysia. Malaysia’s palm oil industry, after being boycotted by the EU, will have more problems with China’s boycott,” she said.
Ng concluded that all these would eventually result in a return of privatisation and crony capitalism - only that this time, there will be little oil money to bail out mistakes.
“The only way is to have fake subsidies funded by the rakyat. The rakyat will suffer but will still clap their hands.
“The happiness index will be the key KPI, just like in some countries, where the poorest people in the world are also the happiest,” she said.