Tuesday, 18 November 2008

Fuel Taxes Since Nov 1...

Datuk Sharir Samad today revealed two things on the pump prices:

i) They have stop subsidising since Nov 1, and

ii) At the old rate of RM1.92 per litre, they still have "surplus".

which is what Malaysian Insider take it to mean Malaysians are effectively paying fuel tax since Nov 1.

Thanks to the secrecy encompassing the fuel price computation formula, we will not know how to compute this discretionary taxes we are paying but the Government assures us that the Government can afford to lower the price to RM1.92 per litre and still attain positive collection. So effectively, we may be subsidising the Government at 5% (if not more) per litre (I take it that they can afford to lower it by 10 sen but we will never know).

From the little the Government has revealed when the crude oil prices fall below USD65 per barrel, they have stopped subsidising our pump prices. As of today, it is about USD55.25 per barrel. Imagine if the fuel prices continue to fall to USD30 per barrel as some predicted (which I personally doubt it will go that low).

Source: http://affordablehousinginstitute.org/blogs/us/2007/01/immobile_homes_2.html

Anyway, I wonder if the Government will continue lowering the pump prices? We can see now they somehow didn't lower it to RM1.92 despite their clear ability to do so...

I mentioned in my previous entry, "No floor please..." in support for the removal of pump price subsidy under the general idea that it should be left to market forces to dictate the pricing. But to burden the people by excessively taxing them under the pretext that the Government is more efficient in allocating resources to the needy, that is a very bad notion. Like I previously suggested, why not just impose a clear cut consumption tax or at least reveal the formula and input data?

I wonder if this hidden tax requires an amendment to the Income Tax or Excise Tax Acts since effectively they are now collecting taxes? Would there be any dissenting MPs who dare to voice this up on hidden taxes the rakyat has to bear?

The ones to be bear the brunt are again the poor.

UPDATE @ 6:13 PM:

From the Malaysiakini article, "Shahrir: No need for petrol subsidies", I have extracted the following:

He added that the government might still make a "a bit of income" if prices shrink back to pre-June 5 prices of RM1.92 for RON97.

"The petrol subsidies disappeared once the global price of crude oil went down to US$65 per barrel," said Shahrir, explaining that the price is now around US$55 per barrel.

At present, the
cost price of RON97 is below RM1.61, said the minister. This means that consumers are currently paying 39 sen above the actual price.

Shahrir said
even after considering the 19 and 12 sen revenue per litre going to the energy companies and kiosk operators respectively - the government can still marginally profit from pump prices at the RM1.92 per litre level.

So technically, if we take the 39 sen excess we are paying to minus out the payments going to energy companies and kiosk operators, there will be an excess of 8 sen. This, at RM1.92 per litre (RM1.61 plus 19 sen plus 12 sen), translates to 4.2% discretionary hidden tax imposed on all motorists using RON97.

That is assuming it is based on a "current actual price" which we will never know unless the Government graciously tells us. And yes, perhaps they need the Cabinet to declassify the information too as it might be under OSA. Sigh...

Much Ado About Nothing: On Choices...Again

After a long lull, I decided to write someting after reading zewt's blog entry this morning. He talks on usage of children as shields from police action, criticism for that actions and that in looking at the big picture, many also invoke the names of their children to do just about nothing at all even in the sight of great injustice.

As I wrote down my comments to his entry, I realised that it is again about choices. For instance, when I read the online news for the past week or so, I noticed there are much of about the same thing being rehashed, recycled and reported. I noticed there are little for me to put my views on as it seemed redundant to repeat myself. Or in other instances, it is nauseating to even bother writing such as on oxymorons pertaining to some leaders blowing clarions on the need to fight/resist/or simply I-don't-use money politics.

And also due to my home internet connection running at snail pace of late. I can't even view my favourite animes on crunchyroll.com.

So anyway back to choices.

Source: http://fly4change.wordpress.com/2008/06/06/consumerism-whats-your-first-reaction/

In life we make many choices - some mundane, others important; some impromptu, others after much careful considerations. There are many trade-offs we can make that will seem better for the future after looking at the direct consequences of my actions. And popular ones too.

We can quote many reasons to support our actions like how the police have reasons to act by arresting peaceful demonstrators for fear of causing national insecurity. Fear afterall, is another prime motivator for doing just about nothing and everything possible to keep things per status quo.

But ultimately, from the choices we make, who is to judge if it is really good or bad? Afterall, everyone has their stories to tell. Not everyone place equal weightage of the same factors as us. Will we see them lesser or greater for the choices they make? So by what standards do we use to measure?

How nice is it that we can live in a carefree life where we don't have to make difficult choices. Just making simple choices like whether to have foie gras for appertiser or perhaps a simple mushroom soup with warm bread instead. We have no one to blame and everyone is our friend.

But knowing that few, if any, has such choices, I guess one other choice we have is what we make out of the consequences of choices others made. We can choose to be upset or worry or just wait and see. Like when I ordered that tong yuen in ginger soup dessert and wondered if I should do the same for my friends though they have asked for me to order for them. They weren't upset. They ended up ordering things the like instead.

Sunday, 9 November 2008

Reflections Of Times Such As These

My one and only big sister just had her wedding on Saturday. I am glad she is blessed with a good husband and I hope their union will last their lifetime. One could say that the companion one has in part define the type of person one is. It is during such times that I have an opportunity get a small glimpse into her life by the friends she has and the kind of person her husband she is married to.

But I also noted an interesting observation during this happy occasion. The lunch caterers and hotel where she had her wedding banquet hired foreigners as waiters. Now, I find these foreign waiters are neither exceptional in terms of quality of service provided nor well versed with Bahasa and English. I wonder why then do we still resort to employ foreigners? More so when everyone is forecasting a grim outlook and placing their bets on global recession?

Source: http://www.sfgate.com/cgi-bin/blogs/sfgate/category?blogid=26&cat=622&o=30

My cup of tea are often not refilled unless I request for it (this is despite the promise by the hotel management that we will have a ratio of 1 waiter to 1 table), they are rough in handling food resulting in spillage and mess and they don't quite understand the need to smile. So what makes them better than our locals? Or to look from another perspective, are locals shunning this sort of work? Can we still afford to be choosy these days?

As I read Malaysian Insider, I am perturbed by two articles published i.e. DBS to cut 900 jobs and US job gloom drives Singaporean grads home. I worry for my friends working in the financial sector in Singapore more so for those in DBS. If they are retrenched, it is likely they will return to Malaysia and I am worried they might find difficulties in securing jobs here as most financial institutions here has slowed their recruitment drives. As these professionals return home, wouldn't our weaker labour and wages market be further pressed?

As there is so much the rakyat can do to help themselves, we naturally look to the Govt for leadership, guidance and assistance. With our uninspiring Govt announcing RM7 billion stimulus package, is it enough? DAP certainly don't think so.

And what if it is really not enough? Are our Govt prepared to pump more when they cap their budget deficit of 4.8% for 2009? Wouldn't that send more worring signals to investors that our Govt can't keep their words?

With so little faith reservoir to draw from, ultimately, can this Govt last? I guess if they manage to steer the nation away from troubles, they would win supporters. If not, history are repleted with a lot of references of what happens to indifferent governments to the pains suffered by their people.

In ancient China, dynasties fell because the emperors lost "the mandate of heaven" to rule. And they fell not because some natural disaster hit the palace and kill the whole royal family. Instead, it is the ordinary lives of their citizenry undergoing hardships, extensive suffering and lost triggered by economic troubles which followed from natural disasters that caused a groundswell for rebellion to be built as the citizenry take these signs are cue from the heaven to uproot the "illegitimate" sons of heaven.

Source: http://rosenblumtv.wordpress.com/2007/05/

Also, Louis the XVI and his wife, Marie Antoinette were removed from power and executed for exactly the same reason. Their crimes: Indifference and basking in opulent wealth while witnessing persistent, prolonged and widespread economic suffering faced by the French citizenry.

So which will it be then for Malaysia? A story we can tell our grandchildren on our successes or missed opportunities? Only time will tell...

Friday, 7 November 2008

High Court Releases RPK!

Alert! Alert!

I got the following from Malaysiakini:

Court orders Raja Petra's release
Nov 7, 08 9:46am

The Shah Alam High Court this morning ruled that the detention of well-known blogger Raja Petra Kamarudin under the ISA was illegal and ordered his immediate release.


The judge ordered that Raja Petra be produced in court by 4pm today after which he should be immediately released.

The only problem is I am afraid the police might re-arrest him when he sets foot out of the door. Let's pray and hope this will not happen.

Thursday, 6 November 2008

Envy and Pursue

My friend recently told me he has been offered an attractive position in another organisation where he is tasked to set up a whole new unit of which he will act as the head. I am envious of course considering how far he has come but I am glad he has moved so much further ahead.

Unlike him, I never stayed put in one job for long. In my quest for something better, whatever the better is, I have move around in search of a better paying job with greater challenges. Yet at the same time, I yearn for a slower pace of life where I can achieve some sort of work life balance. I have to admit that wherever I move to, there is much to observe and learn. Yet, with more knowledge comes realisation. The impressions I have as an outsider turn insider more often than not changes for the worse; I realised the shiny and beautiful scenes behind the windows I see as an outsider are actually quite limited, tainted and blurred.

I have made a move or two on the basis of simple greed because I felt compelled by impatience to move forward. Besides, the money is good so why not since I have real needs. In fact, when I first bought my house, I am doubtful if I could afford it then when my salary is not enough to cover my basic expenses and at that time, I relied heavily on balance transfers to make do until year end bonus to end up with a clean slate. I know I can be reckless but looking back, I am quite glad I made that impulse buy back then.

Anyway, my other friend once told me that he only makes a move if it is a upward progression as he strongly believes horizontal moves would only provide short term gains. With many changed jobs later and a little reflection, I guess my accidental self experiment proves that point somewhat. I hate it when I recall the I-have-more-experience-in-life look of my everknowing dad repeating that old adage, "A rolling stone gathers no moss" over dinner.

Yet the conflict inside me often makes me wonder if I am at the right position where I am today. Am I doing the right job which long term prospect in mind? I am of course tired of jumping here and there. I don't like the "new guy" label too with all the happy introductions when what I really want to do is just get the job done and go on and do what I want to do; a bit anti-social I must say.

My boss recently told me my next step in progression upwards. Technically, I am better than most people at my current job level in my organisation. But for me to make the next step, I have to step up and take up middle management role. I would have to rely more on my people skills, interaction and dealing with clients i.e. build my own portfolio. Am I truly ready? My heart sort of sank a bit as the room seemed darker and hotter as he uttered those words.

Source: http://www.designedlearning.com/Articles/FeaturedAffiliate/NewsForAChange/Sept1998.htm

I sense he is genuinely grooming and showing concern to me but I can't help but feel somewhat inadequate. The future looked so bleak as I walked to the carpark recollecting the words he spoke to me. Like a blind man reading the stars, where will my future be as I grappled with the surrounding darkness. I have grown comfortable to be lead and to me, the whole aspect of leading is a very fearful prospect. Yet, that is the only progression available from the way he pointed out to me. I wonder if that is really what I want. I wonder if this is an indication of severance under the guise of independence.

Oh well, I just have to walk one step at a time and plan ahead with an umbrella ready should rain start falling. But which path should I take? There are often no road maps and again another adage comes to mind, "Life's a journey, not a destination."

Gosh, I hate adages. What's with these wise people anyway? Do they really have that much free time?

Tuesday, 4 November 2008

Valuecap: More Questions From Assurances

I am perplexed. I tried re-reading the articles again and again trying to figure out what makes the Valuecap shareholders so happy that they are willing to settle for mere 3.5% coupon rate and RM135 million dividend for an investment they made back in 2003 which technically was restructured in 2006.

The fact that there are 3 shareholders namely, Khazanah, KWAP and PNB investing in Valuecap and lending them monies with such low returns makes me wonder what was the other factors that Khazanah, KWAP and PNB would have considered lending Valuecap RM5 billion facility with 3-year tenor.

Source: http://goal-exchange.com/?p=104

I mean PNB paid its investors annual dividends of more than 7% per annum while KWAP is tasked with managing the pension funds of the civil servants. Surely settling for something akin to inflation rate is not going to help much with the growing burden of supporting the pensioners or getting close to the more than 7% annual dividend PNB unitholders look forward to right? As for Khazanah, well, they still have to answer for a lot of weird investments like Silterra so for this purpose, I will just leave it out for now.

I wonder, in providing financing, would they have asked themselves as they quietly ponder their investment papers on how Valuecap is going to pay back the principal back? Afterall, with Valuecap main activities revolve around buying undervalued stocks which technically need a medium to long term timeframe to exit, is it unreasonable for them to ask for a timeline of sort for orderly disposal and building up of cash reserve to repay (since it is safe to assume now that these debts consist of bullet repayment).

Again, they may have nagging feeling that considering the size Valuecap was investing in, if Valuecap was forced to sell at the last moment i.e. around Feb 2006, that would negate the reason Valuecap was set up at that time which was to provide support and build confidence in our local share markets and undervalued counters. So did they?

For further assurance, not that they don't trust their fellow GLC or state agencies, being independent and with interests of stakeholders such as pensioners and unitholders at hand, shouldn't they too requested for undertakings from Valuecap to ensure that they stick to some sort of sell down schedule?

For PNB and KWAP, which are no strangers to managing funds and investing in the share market, wouldn't they too might have considered that in the event Valuecap can't sell down, they could settle for in-kind like taking the shares at that point in time (with perhaps a slight discount) as payments rather than settling for cash if Valuecap fails to follow the dsupposed isposal schedule? But did they asked and considered such possibilities?

Or perhaps in lending, did the Government also guaranteed the RM5 billion advanced in 2003 and that perhaps has been the major scoring point the lenders take into consideration in lending those monies in the first place? If such is the case, why didn't they call on that guarantee in 2006?

Source: http://www.bowmancoaching.co.uk/coaching.html

And now we are back to the same question, why then are they happy to settle for mere 3.5% coupon rate and RM135 million dividend return made over close to 6 years investment?

Meanwhile, left with more questions rather than assurances from the Minister himself, I am not too glad he only allowed for employees to voluntarily reduce EPF contribution by 3% for the next 2 years. I wish he should have been more specific, like for those with housing loan, they can opt to not contribute for 2 years and use their monies to pay off their housing loans.

Surely that would have encouraged more people to consider settling their loans faster. That may free up more monies and encourage the banks to lend more as their loans to deposit ratio will reduce further.

Unlike the Government, I will admit why I favour that as I do have an ulterior motive. I just want to contribute as little as possible into a forced savings plan I don't trust and sure as hell want to pay for something I am quite happy to live with.

So can we have less beating about the bush and just more frankness in the explanations given?

Monday, 3 November 2008

And it comes in 5s

Today is Monday. I dread Mondays. Monday is the day signifying the start of the working week. And on these days, I have to wake up 5 minutes past 6. I have to leave my house 15 minutes before 7 in hope that I will reach my wife's office about 45 minutes later.

Source: http://drewmaniac.blogspot.com/2007/10/chucks-and-mondays.html

I know I have to work late on Mondays because it usually takes longer to get the working mood in order. I left around 9.35 pm today and I paid my RM5 parking as well.

On Sundays, I usually lament around 5 pm as the sun slowly sets at the western horizon and I dread the next day which reminds me the 5 working torturous days ahead. Oh how I dread Mondays.

And today, guess what?

I was surprised that Valuecap owes its shareholders RM5 billion which it does not seem to be able to pay. And EPF is supposed to loan them RM5 billion on the basis that they are a good investment company which will profit from taking advantage of undervalued stocks (but for the fact that Valuecap's superior-investment-research-technique-investing-on-portfolio-basis includes getting the lenders to lengthen their repayment by another 3 years which was conveniently forgotten to be mentioned by both current finance ministers and the immediate past one as well).

Will EPF face the same come whenever it is supposed to collect back its principal loaned? Well we know Valuecap has set a precedent which it may or may not follow. It really depends on its superior-investment-research-technique-investing-on-portfolio-basis.

And before the day concluded, I read about Tony Pua was upset with the RM5 billion or so losses Silterra suffered. And guess what Silterra and Valuecap has in common? Khazanah Nasional as their main shareholder and creating an impression that monies grow on trees.

Source: http://library.thinkquest.org/J003358F/trivia.html

Sigh... if only I bury my head under the pillow and let the Mondays and 5s pass right by...

Sunday, 2 November 2008

No floor please...

I guess the title said it all.

I am against setting a floor price for petrol even if the average world crude oil prices fall below US$65 per barrel. Instead, I am for removal of the subsidy by stalling the announcement of revision of the petrol prices until such time when the fallen average prices fully eliminates the current 30 sen blanket subsidy petrol pump given.

Source: http://adsoftheworld.com/media/ambient/jobsintown_de_petrol_pump?size=_original

In other words, if average crude oil prices hovers between US$65 to US$70 per barrel and the 30 sen blanket subsidy reduces to say 10 sen, then we should keep the present RM2.15 even if it justifies the Government reducing to RM1.95 to maintain the 30 sen blanket subsidy.

However, if the average prices falls below US$65 per barrel and the real petrol pump prices without subsidy is at RM1.90 (if not lower), why should we keep it at a RM1.92 floor price? I don't see why it should turn into indirect taxes of 2 sen imposed on the rakyat by setting a floor price when global crude prices fall further below US$65 per barrel.

His argument that the public would not be wise in spending if the Government allows this essential item to be treated as a cheap product is a double talk as far as I see it. If the Government can tell the rakyat to buckle up when the petrol pump prices are revised upwards thereby implicitly credit the rakyat's ability to be prudent, why shouldn't the same implicit concept be assumed when the prices are falling? There are 2 reasons that Sharir should be aware of as Domestic Tade and Consumer Affairs Minister namely:

Firstly, the volatility in petrol prices would ensure the rakyat be aware that they now directly contribute to increasing petrol prices and the Government is not going to give them blanket subsidies like in the past hence some prudence on their part is needed.

Secondly, this is the golden opportunity for the Government to use the savings to implement proper public transportation system as well as channel it to developing other regions to take away the over-development activities in places like Klang Valley. This will slow further inter-state migrations and in the longer term, place less stress on existing public infrastructure, deferring things like building a 3rd lane to existing 2-lane carriageways because more people decided to live in suburbs near KL and PJ.

Source: http://mindacergas.wordpress.com/2007/06/11/smart-tunnel-and-kl-floods/

If the Government is genuinely concerned with the rakyat treating petrol as dirt cheap essential item, then impose a tranparent consumption taxes (like the 5% sales tax). I am sure it is easier for the rakyat to know how the Government price their probably "imprudent" spending behaviour. Or alternatively, give us the rakyat the formula and timely data (audited and checked by our Auditor General) to gauge for themselves how the pump petrol prices are derived. Unlike , I am are quite happy with itemised biling.

As for the RM2.70 petrol price ceiling, our outgoing PM only promised to keep it until 31 December 2008. Within the next 59 days, barring any sudden spike in average crude oil prices, I doubt this ceiling resolve will be tested and from 1 January 2009, the Government are not obliged to keep any ceiling prices.

The Government should see this as an opportunity as Shahrir said, to use the monies allocated for subsidies to instead direct to much needed development spending to build up our economy.

But no floor price please (or ceiling for that matter)...