Enough with the comics, give full list of GST-free items, says Rafidah

BY ANISAH SHUKRY

Published: 31 March 2015 7:00 AM

The article was first published on The Malaysian Insider.

Putrajaya must change its current approach of educating the public on the goods and services tax (GST) by publishing immediately a list of tax-exempted items in every newspaper in the country, former minister Tan Sri Rafidah Aziz said.

The outspoken former international trade and industry minister said a clear list would help consumers to be better prepared for the new tax which takes effect tomorrow.

She said Putrajaya’s reliance on the use of cartoons, billboards and technical jargon such as "zero-rated" for the past year to explain GST has left Malaysian consumers, including herself, more confused over the new tax system.

"I personally think that right now, we should have a complete list of the categories that are exempted, so the public will know which (items) won’t be taxed.

"It should be made available in all the newspapers, in all languages, and it should not be technical,” Rafidah told The Malaysian Insider.

"Our problem is that the explanation so far has not been clear. The government has been using different sources or different approaches, and most of them have been very technical.

"For instance, who understands what ‘zero-rated’ means? Why can’t they just use the phrase ‘tak kena GST’ or ‘no GST’. That’s much simpler and easier to remember.”

She said it was also important that Putrajaya first cleared the air over which items would not be taxed, so that consumers would not rush to stores and hoard goods unnecessarily in anticipation of the GST.

Rafidah said the newspaper pull-out would also help consumers identify traders who raise prices on items that were not affected by the GST.

"Let’s say on April 1, I read the newspaper and I see that soap will not be taxed. Then I go to the supermarket and see they are charging me 6% for it. Thanks to the pull-out, I know they are cheating me and I can report this.

"Forget about the various codes, the technical jargon and whatnot. All that is irrelevant,” said Rafidah.

She added that Putrajaya could pay for the newspaper pull-out as the cost involved would be far less than erecting large billboards across the country.

"Some time ago, there was a billboard near my house that said education would be exempted from GST. It even had a cartoon drawing on it. I thought, what does that mean? Are university fees or tuition fees exempted from GST? What about books or computers or school-related tools?

"Instead of spending money on all those billboards, by this time you could’ve gotten a complete publication on all the items that are not taxed,” said Rafidah.

She added that a separate exercise should be done for traders so that they could calculate how the GST would affect them, and urged the government to hold meetings with associations.

"Right now, there appears to be no coordinated effort. That’s the only problem. I have no quarrels with the tax itself. It is a good move to rationalise taxes. But people are not familiar with it; some are taking advantage of it, and that causes confusion and hoarding.” she added.

The GST jingle sung by customs officers which was mocked online by Malaysians. – The Malaysian Insider pic, March 31, 2015.One of Putrajaya's efforts to educate the public on GST through a music video recently received heavy criticism from Malaysians after went viral on the internet.

The video, purportedly created by the Customs Department, hailed the virtues of implementing GST, but was panned by critics as "sad", "cheesy" and "reminiscent of the 1970s".

In the meantime, to ease the transition period, the Domestic Trade, Cooperatives and Consumerism Ministry has set up a round-the-clock operations room to monitor prices after the GST kicks off.

Located at Precinct 2 in Putrajaya, the operations room would also take complaints and reports from the public on GST matters.

Bank Rakyat FY14 net profit up 2.7%, pays 15% dividend

By Ahmad Naqib Idris / The Edge Financial Daily   | March 24, 2015  

KUALA LUMPUR: Bank Kerjasama Rakyat Malaysia Bhd (Bank Rakyat) announced a 15% dividend payout after its net profit grew 2.7% to RM1.96 billion for the financial year ended Dec 31, 2014 (FY14), compared with RM1.91 billion the previous year.

It also saw a record high profit before tax and zakat of RM2.16 billion for FY14, up 1.6% from RM2.13 billion in FY13.

“Bank Rakyat has performed well in 2014, despite the challenging economic environment, following the fall in commodity prices and the ringgit,” Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hasan Malek told a news conference to announce the cooperative bank’s results yesterday.

The bank’s total dividend distribution for FY14 — at 15% — was at RM450 million compared with RM446 million in FY13, which was also at 15%.

“A 15% dividend payout is considered high, in terms of yield. So we maintained the same dividend payout as in 2013,” said Bank Rakyat managing director Datuk Mustafha Abdul Razak.

Bank Rakyat reported a gross income of RM5.98 billion, contributed mostly by income of RM4.53 billion from financing. Its other operating income was up 9.44% at RM571.56 million from RM522.26 million in the previous year, largely due to recoveries on financing written off of RM205.92 million.

Its gross financing balance climbed 5.6% year-on-year to RM62.1 billion, while consumer gross financing increased by 7.3% to RM56.71 billion.

The bank reported a 7.6% growth in assets to RM89.18 billion, while its return on assets remained strong at 2.5%.

Total deposits for the year expanded 4.9% to RM68.52 billion, with retail deposits accounting for 16.9% of the total compared with 16% in FY13.

Non-performing loans (NPL) were lower at 2% in FY14 compared with 2.2% in FY13.

“We are improving our underwriting standards and our NPL will continue to improve further. We would like to bring them to be on par with the industry’s standard of 1.7%, within this year or the next,” said Mustafha.

He said the bank sees a big potential in the non-government market, and would like to expand its footprint in the private segment.

“If you look at the number of people, that are working in Malaysia, of about 13.2 million workers, 1.5 million of them come from the government sector. So there is a market of about 12 million employees in the private sector. If we can capture about 3% to 5% or so of this market, it is already a lot. We are already targeting this new market but we are still very cautious as we want to make sure the quality of the asset is good,” said Mustafha.

Race-based parties growing more irrelevant, survey shows

BY ANISAH SHUKRY | Published: 16 March 2015 

The article was first published on The Malaysian Insider.

Malaysian voters overwhelmingly want political parties which take care of all Malaysians, rather than ones that fight for just their own race and religion, a survey has shown, even as ruling parties Umno, MIC and MCA continue to rely on race-based politics to drum up support.

The survey, commissioned by The Malaysian Insider, found that the racial rhetoric these parties thrive on is not consistent with what Malaysians want.

Of all the respondents polled, 76.9% said they preferred a party that was inclusive over one that catered to just their community.

This preference cuts across race, age and the political divide, the survey carried out by independent pollster Merdeka Center found.
In terms of ethnicity, 67.5% of Malays, 91.4% Chinese and 89.2% Indians polled said they preferred a party that takes care of all Malaysians.

Only 27.8% Malays answered otherwise, despite the rise of vocal Malay/Muslim pressure groups such as Perkasa and Isma, which claim to represent thousands of members and are demanding that Umno to do more to protect the Malays.

“What Barisan Nasional stands for – race-based politics – is growing increasingly out of sync among the electorate. Even among the Malays. It’s only the really hardcore who want race-based politics,” Ibrahim Suffian, the director of Merdeka Center, told The Malaysian Insider.

And despite Prime Minister and Umno president Datuk Seri Najib Razak’s increasingly right-leaning stance, 73.4% of Barisan Nasional supporters who were surveyed said they wanted a party which takes care of all races.

Meanwhile, 77% of respondents who were still undecided about which party to support said a party that caters to all races could represent them during voting time.

Most Malaysians also said the most important quality they looked for in a candidate during elections was one with good relationships with all ethnic groups.

“It is clear from the survey that Barisan Nasional is running behind and that it’s playing catch up with the public, who are open to less race-based parties and want ones that cater for all Malaysians,” said Ibrahim.

“And you have a big chunk not affiliated with either side, who are looking at what the politicians can deliver. These Malaysians are no longer dependent on the mainstream media, they can make up their own minds.”

However, Ibrahim said this did not necessarily spell the end of Barisan Nasional, because many Malaysians who were unable to sit well with the race-based politics were willing to overlook it, as long as the ruling coalition continued to deliver.

“Their supporters think, ‘yes, I don’t agree with the politics of BN, but it puts food on the table, it gives me jobs, and it prevents the other guys from taking over’. So you’ve got people still voting for them,” said Ibrahim.

In a testament to the 52% of Malaysians who voted for Pakatan Rakyat during the 2013 general election, the survey revealed that when voting, most Malaysians (63.2%) regardless of race looked for a party leadership that promoted change or reform, as opposed to one that preserved the status quo (25.6%).

Interestingly, supporters of the incumbent, BN, were split on the issue, with 46.8% saying they wanted a party leadership that espoused change, and 42.2% saying otherwise.

Party leadership is the main consideration most Malaysians (45.1%) take into account when voting, the survey showed, while only 17.3% and 15% said the party or candidate being fielded in their area, respectively, was their number one concern.

Change and reform had been among Najib’s buzzwords when he took on the Umno presidency in 2009, but the prime minister has had to dial back on his reforms – most notably his promise to repeal the Sedition Act 1948 – following pressure from within his own party.

The survey involved 1,008 respondents of voting age, who were interviewed by telephone from January 21 to 30 and chosen through the random stratified sampling method along the lines of ethnicity, gender, age and parliamentary constituencies.

All parliamentary constituencies were surveyed and the selection of the respondents is proportional with respect to the population.

EPF says 80% of workers have savings below poverty line as they turn 55

BY SHERIDAN MAHAVERA
Published: 13 March 2015 8:23 AM

Malaysian workers during morning rush hour on their way to work. EFP says most Malaysians have not enough savings in their pensions fund as they reach 55, forcing many people to work into their 70s, reflecting latest global trends. – The Malaysian Insider file pic, March 13, 2015.
Malaysian workers during morning rush hour on their way to work. EFP says most Malaysians have not enough savings in their pensions fund as they reach 55, forcing many people to work into their 70s, reflecting latest global trends. – The Malaysian Insider file pic, March 13, 2015.
Nearly 80% of workers who will turn 55 this year will not have enough savings in their Employees Provident Fund (EPF) to live above the poverty line, according to figures released by the fund’s chief executive officer.

Datuk Shahril Ridza Ridzuan said for the next 20 years, the workers would not have enough in total EPF savings to enable them to live on RM800 a month, which is close to Malaysia’s average poverty line income of RM830.

This is because most of them had low wages when they started contributing to the fund in 1980s, and continued earning relatively low salaries till they turned 55, said Shahril, who did not provide a number for this batch of retirees.

The revelation shines the spotlight on the problem of low incomes among a majority of Malaysian workers, even as Putrajaya said it aims to make Malaysia a high income nation in five years’ time.
According to Shahril, more than 75% of its 14 million EPF contributors earn less than RM2,000 a month. About 15% earn between RM2,000 and RM5,000 a month, while those earning more than RM5,000 are in the top 10%.

The EPF has set RM196,800 as a savings threshold that would allow a contributor to spend at least RM800 a month for the next 20 years.

The threshold is revised every three years to take into account inflation.

Only about 20% of its contributors who turn 55 this year are expected to have RM196,800 in total savings. That percentage is likely to stay about the same in the coming years, said Shahril.

“Historically, we have a low wage environment, so that percentage has inched up only a little.

“This is why we tell contributors not to take out their savings till they are 60, when they really retire.

“That extra five years can earn them an extra 40% through compound interest,” Shahril (pic, right) said when met after a talk organised by the Chevening Alumni Association in Kuala Lumpur last night.

These figures, he said, reflect the new reality of working life in Malaysia, as people will have to work beyond 55 in order to save enough to live out the rest of their lives.

“This is the trend in developed countries and we are getting there. The reality is that you cannot retire and enjoy yourself at 55 any longer.”

That age was set in the 1950s and has not been changed to take into account longer life expectancies, he said, adding that these days, people expect to live through their 70s.

This trend is compounded by the fact that Malaysia is a rapidly ageing nation. In 2030, 17% of the population will be aged above 65, he said. In 2040, people aged 65 will outnumber younger individuals.

“So we need policies to deal with this, such as financial literacy training so that young people are aware of the need to save for retirement and how to integrate old workers into the market.

“These are issues that advanced economies have to deal with and we are getting there,” said Shahril. - March 13, 2015.

- The article was first published on http://www.themalaysianinsider.com/malaysia/article/epf-says-80-of-workers-have-savings-below-poverty-line-as-they-turn-55#sthash.rwsMYIjt.dpuf

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