Your Junk worth 5K?

[funfer_fahrer]

People talk about reducing taxes, but would you know how the govt would compensate with the loss in revenue from that? Do you mind higher taxes? we can go on about whether the money is well spent but that's a totally different issue altogether.

Instead of worrying about losing tax revenue, why don't we ask this question - who is going to pay for the RM7 billion stimulus package knowing the fact that the amount of money spent can be reduced if the government make minor adjustments in its policies? Conventional wisdom would suggest that in this trying times everything must go up - from interest rates to taxes. However, I beg to differ. Apart from interest rates, taxes must also go down especially taxes related to automotive industry because this industry is the slowest at the moment. So far, there have been cuts in EPF contribution but that is too little considering our inflation rate is quite high. When the economic turmoil hit our biggest trading nation United States, this should have sent a strong signal to our government. Something must be done. Unfortunately, we were a bit late to respond. That 7 billion package is the answer to all these when in fact many things could have done earlier to reduce the amount. We do not want to be like Iceland with a collapsed government. On the other hand, we also do not want to be like Japan. Even after interest rate being reduced to 0%, so far nothing has happened. In fact, the Japanese government is getting worried because their currency value is getting stronger and stronger. This would definitely affect their export market. Also, the latest in Japan I heard Louis Vuitton is having sale and started giving discounts, which is something unheard of. Reducing taxes means cheaper price. People actually spend more when things are cheaper. For example, during the mega sale business owners are the ones who look forward to this annual event, not the consumers.

Less is best.

Cheers

 

[ALBundy]

As for me, I'd echo Yamin Vong's writing in his weekly CBT editorial.

What the government needs to do is to liberalise the automotive industry and make M'sia a manufacturing hub. Thailand's industry is big on pick-up trucks, Yamin suggested hybrid or electric cars (if I remember correctly). But there lies the conumdrum the gomen is facing as Proton needs to be protected at all costs. Yup. our policymakers are not stupid, some of them are extremely brilliant but sometimes (if not most of the time) as we know well enough, the best decision is often the unpopular one.

Until, the gomen is ready to let Proton stands on its own two feet, then all policies
implemented will not address the issue at hand, at least from a macro point of view.

Cheers

p/s As for gomen losing tax revenue, the best case study is Australia. After the protectionist policy was removed in the 70s/80s, the gomen Down Under actually collected more taxes.

 

[affan66]

funfer, thanks for the comments. Actually that idea has been brought about many times. However, the political will to change is tough especially in the current environment. Some of the proposals coming out of the mini-budget(I heard) are quite out of the box but I do hope it becomes a reality on March 10.

albundy, when AU did that, did they also increase other taxes say GST/VAT or income tax? Malaysia has yet to introduce GST and been mulling about this for a few years.

 

[ALBundy]

Affan, don't think they implemented it at that time.

A quick search at Wikipedia,
http://en.wikipedia.org/wiki/Goods_and_Services_Tax_(Australia)

Cheers

 

[B33mEr]

I want to add something here Proton is one of the biggest paymaster in Malaysia generating employment directly and indirectly by the thousands (100k jobs?) ... If we were to liberalise the auto industry there would be a lot of unemployment as a result (resizing and restructure to remain competitive).
While i like to see car prices come down too ... i don't think liberalising the auto industry will be a viable option for the next 3-4 years especially when we're in a global downturn right now ... maybe in 10 years time, or less hopefully, we'll see a change for the better.

link http://paultan.org/archives/2007/08/08/the-edge-due-diligence-audit-for-proton-this-month/

 

[shawnglory]

if they wanna remove old cars from the roads they might as well abolish the 350% +++ excluding additional charges tax

the only reason why people in this country dont wanna or cant afford a new car is because of that.

u earn 10 bucks to buy a 100 dollar car...

it's just unreal to some of the less capable ones in the community.

well my 2 cents at least

 

[loafer]

funfer, thanks for the comments. Actually that idea has been brought about many times. However, the political will to change is tough especially in the current environment. Some of the proposals coming out of the mini-budget(I heard) are quite out of the box but I do hope it becomes a reality on March 10.

albundy, when AU did that, did they also increase other taxes say GST/VAT or income tax? Malaysia has yet to introduce GST and been mulling about this for a few years.

http://www.gstaustralia.com.au/

For the wikipedia link Bundy posted, add a ")" (without the " ") when you click on the link.

GST has always been a flat rate of 10% as long as I can remember it. Same for our neighbour as well if I'm not mistaken.

 

[fabianyee]

Proton does not have the economy of scales to be profitable, that is one big issue. without volume, it can't survive for long in this trying time. It may have to change its business model to sustain business continuity. Heck, even Toyota has posted losses due to the economic slowdown, what more of Proton.
I don't think the government can afford to close down Proton but it definitely need to rethink its long term business plan.

 

[affan66]

in singapore, the GST was increased last year, if I am not mistaken.

Malaysia has held back introducing GST for so long. So many businesses for example, get away from paying taxes too. This has impacted the govt in collecting revenue.

There has been a lot introduced the past few years to increase efficiency but nobody reads that. Many of the times, the screw-ups (which I get fed-up too) always get the limelight.

Proton is already looking at a new biz plan. ooops. can't talk so much on this topic. got a family to feed. sorry folks.

 

[ALBundy]

I want to add something here Proton is one of the biggest paymaster in Malaysia generating employment directly and indirectly by the thousands (100k jobs?) ... If we were to liberalise the auto industry there would be a lot of unemployment as a result (resizing and restructure to remain competitive).
While i like to see car prices come down too ... i don't think liberalising the auto industry will be a viable option for the next 3-4 years especially when we're in a global downturn right now ... maybe in 10 years time, or less hopefully, we'll see a change for the better.

link http://paultan.org/archives/2007/08/08/the-edge-due-diligence-audit-for-proton-this-month/

To an extent is true, that once the auto industry is liberalised some unemployment may occur initially but like many others and looking from a macro and longer point of view, I believe the industry will flourish once foreign car makers start to invest here like what they do in Rayong, Thailand. Our exports and production volume is no where close to them, wouldn't that be better for all Malaysians? Cheaper cars and more jobs!!

Cheers

 

[flash]

Problem is, are our "leaders" that far-sighted or are they short-sighted? Or they just "care" for themselves in the short term????

To an extent is true, that once the auto industry is liberalised some unemployment may occur initially but like many others and looking from a macro and longer point of view, I believe the industry will flourish once foreign car makers start to invest here like what they do in Rayong, Thailand. Our exports and production volume is no where close to them, wouldn't that be better for all Malaysians? Cheaper cars and more jobs!!

Cheers

 

[B33mEr]

To an extent is true, that once the auto industry is liberalised some unemployment may occur initially but like many others and looking from a macro and longer point of view, I believe the industry will flourish once foreign car makers start to invest here like what they do in Rayong, Thailand. Our exports and production volume is no where close to them, wouldn't that be better for all Malaysians? Cheaper cars and more jobs!!

Cheers

I agree with that statement ... but with the current global d/turn the Malaysian economy will not be able to absorb the extra lay-offs if and when that happens in the next few years. Plus the fact that our current political landscape is still kucar-kacir (until pak-lah step down that is) liberalising the auto industry is a political stakes too high to be a viable option for the government. Hence a realistic time frame of 7-10 years is more feasible as we need to ween out Proton dependency on Malaysian government and make them more competitive globally. Hopefully by that time too the global economy is on the uptrend and FDI will usually follow suit.