Cut costs, not increase prices, Dr Mahathir tells Putrajaya

December 26, 2013 7:27 AM

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Tun Dr Mahathir Mohamad (pic) said today that Putrajaya can increase its revenue by cutting costs instead of raising prices of necessities, despite needing a bigger amount annually to manage growing expenses.

Weighing in on the current debate over rising prices, which according to some pundits could cost the ruling Barisan Nasional (BN) votes in the next polls, Dr Mahathir said that while the Government needed a bigger amount annually to manage its growing expenses, by applying the business concept of “cost down”, Putrajaya could minimise wastage and improve efficiency.

“We must accept that the government needs more money with the passage of time. But should the increase be as big as it says?”

“The Government often wastes money because it is not too concerned about the returns on its expenditure in whatever form… If the Government is interested in reducing the cost of governance, it can do so and perhaps quite substantially.”

For example, the Government could save substantially, more than 50%, if it opted for light-emitting diode bulbs, he added.

“The subsequent reduction in the amount of electricity to be generated will reduce subsidy on fuel for power. But this has not been done by the Government.”

He said while people understood that higher tax rates are necessary to cover the cost of development, the rise in living costs has to move in parallel with incomes earned.

“But the taxpayers cannot suddenly come up with the money to pay the new taxes and charges,” he said, adding that the cycles corresponds with the rising costs of doing business when wages, taxes and tariff are increased.

The effect on raising taxes must be carefully studied first, said Dr Mahathir. He proposed for a gradual increase in taxes, saying that it was a more viable option.

“Can the increase not be in stages, for example, 6% per year for three years or longer? The losses in current contracts will be minimised. Future contracts will take into consideration the increases.”

He said that by taking a friendlier approach of increasing price hikes in stages, Malaysians would respond better to the change and be more receptive to the Barisan Nasional government.

“It will not hurt the Government too much but it will gain a lot of goodwill from people.

“Otherwise far from collecting more taxes, the Government may lose much when other businesses and business people emigrate”.

University of Malaya’s Centre for Democracy and Elections (UMCEDEL) on Tuesday unveiled findings of a survey, saying that the increase in the cost of necessities, electricity tariff and petrol had had an impact on the lives of Malaysians. And if nothing was done, BN would suffer in the 14th general election. – December 26, 2013.

Source: themalaysianinsider.com

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