Discussion: Minimum Wage of RM900 and Possible Downgrade to BB+ by Standard and Poor's

[quest_5692]

i hope, after the election, our new government can hold everyone tight together and launch a full blast austerity measure. release all petroleum subsidize, deregulate strict worker union, increase income tax, let the world burn a bit. Then, use the saved up money to build a better public transport system in malaysia. Let the people can't afford car, they MUST take public transport because it is simply too expensive. This way, we can lower the income inequality and achieve environmental benefits. Look at Indonesia, they had been wasting 10% of their annual GDP just to subsidize wasteful petroleum, these money could have gone to somewhere way better. Look at the Iron Lady margaret thatcher, during tough time, you gotta ignore the whines of the people and do what is right. In the end, the people will appreciate it. At first, the opposition sure will fire up the people to ask for more political friendly measures

[day_dreamer]

Originally Posted by quest_5692

i hope, after the election, our new government can hold everyone tight together and launch a full blast austerity measure. release all petroleum subsidize, deregulate strict worker union, increase income tax, let the world burn a bit. Then, use the saved up money to build a better public transport system in malaysia. Let the people can't afford car, they MUST take public transport because it is simply too expensive. This way, we can lower the income inequality and achieve environmental benefits. Look at Indonesia, they had been wasting 10% of their annual GDP just to subsidize wasteful petroleum, these money could have gone to somewhere way better. Look at the Iron Lady margaret thatcher, during tough time, you gotta ignore the whines of the people and do what is right. In the end, the people will appreciate it. At first, the opposition sure will fire up the people to ask for more political friendly measures

We need to learn "No Pain, No Gain"

[noob123]

Originally Posted by day_dreamer

We need to learn "No Pain, No Gain"

No pain, no gain? Full blast austerity measures?
From my experience dealing with the PIIGS in Europe, I don't see any reason why Msia would need a "full blast austerity measure".
We still have a relatively low debt to GDP, our budget deficit is not crazily excessive (relative to other countries), we are still running a current account surplus, and we can still borrow from the markets at an attractive rate. Mind you, Msia’s CDS is trading tighter than South Korea, Indonesia Thailand, France, Spain, Italy, etc.

What we do need are some appropriate structural reforms that will cut waste and make our country more competitive; all these can be done without a full blast austerity measures that will cause recession/demand contraction.

A few things that come to mind are:
1. Cut subsidies and wasteful tax incentive, subsidies were c.4% of GDP in 2011 (while 2011 deficit was about 5.5% of GDP)
2. Broaden the tax base: taxes revenue in Msia is extremely low at 16% of GDP in 2011, more targeted tax reform should help boost government revenue and reduce deficits
3. More targeted and efficient spending
4. Market reforms to encourage competition and do away with "national champion" programs such as TNB, Telekom, Proton" that hinder entrepreneurship