PSM Statement 23 January 2015 - Now is not the best time to implement GST

By S. Arutchelvan

Mr Prime Minister, you said yesterday that now is the best time to implement the GST because you claim that with the decrease of fuel prices, Malaysians will have more money in hand and have a higher purchasing power.

This is totally untrue. The decrease in fuel prices has not made prices of other goods go down. This has never happened before and you know very well that our enforcement agencies can never bring down prices of goods. You have also cut subsidies which mean you have left prices in the hands of the market. On ground 0, the rakyat is facing a massive increase in daily expenses and people and businesses just talk about further price increase after the GST. No amount of creative advertisement by the Government seems to dispel this fear.  

Besides that, your neoliberal economic policies has ensured that education, healthcare and basic amenities are left in the hands of corporate companies to decide. Most of these companies are huge companies having its cronies within UMNO. Can you make them bring down prices of education and health-care? Your government has also completely failed to control housing prices and all your measures, don’t seem to make houses much cheaper.

Now regarding the GST. You are embracing the GST because most countries in the world follow this taxation system. Just two days ago, you complained that our economy is down because of global financial and economic crisis. Now you have clearly understood that global economy determines your economy and it is not always correct to follow what these global super powers “Gurus” in the World Bank and IMF preach to you.

Before the end of coldwar in 1989, only 48 nations used the GST. The previous taxation policies were more progressive in nature where the rich are taxed. But the victory of neoliberal capitalism since then, has resulted in now 160 countries using the GST model.

Mr. Prime Minister, you mentioned in your budget speech that we will get an income of 23.8billion from the GST annually. But if you remove income you have to do away because of  expenses on BRIM, SST tax and exception from GST, you will only get a revenue of 690 million.

Now if you just take the ten richest people in Malaysia, their annual worth is RM 181 billion. If you just tax them 15%, you will be able to make 27billion ringgit a year. That is enough to cover your income from GST which you plan to take from the people from the entire nation. But again Mr Prime Minister, you have decided to make it an official secret the taxation paid by billionaire when it was raised in Parliament recently. That is why we keep telling  you to spare the poor and tax the rich. But in your last budget you have again cut corporate taxes. 

Now if you look into your administrative cost, it amounts to 223.4billion which amounts to  82% of the total budget. If you save just 10% here, you will be able to get another 22 billion here and not implement the GST. Now Mr PM, I have not gone into black money and corruption yet. 

The Global Financial Integrity study shows Malaysia is the 4th biggest with USD 370 billion (1.21 trillion RM)  illegal outflow of black money and illicit money between 2002 till 2011 . The same report said that in 2012 alone, Malaysia lost RM171 billion from corrupt practices and creative money management alone. Saving just a quarter of this amount will enable us to have another RM 43billion in hand. 

Now Mr Prime Minister, it looks like your government will have no political will to increase Minimum wage which is due this year. You are definitely going to defer this the same way how you have deferred from trying to achieve the goal in making Malaysia a high income society in 2020.

It is with this argument that this is perhaps not the right time to implement the GST.