Monday, June 1, 2015

REPAYMENT OF DEBTS


As posted by Dr. Mahathir Mohamad at Che Det on May 29, 2015

1. There seems to be some confusion over repayment of debts and the loss of money by 1MDB.

2. Even if the debts are fully paid up through the sale of assets bought by 1MDB, that does not mean that 1MDB is free from the charge that it cannot account for the billions it had lost.

3. In business, money can be lost through bad investments or bad management. That is acceptable though the CEO and Managers would be sacked.

4. But when money is lost and the management cannot explain where it went and how it disappeared then management would still be responsible even if there is a bailout or the debts paid.

5. Thus with money claimed to have been invested in Cayman Islands and despite claims that it had been brought back and is now in Singapore, the money cannot be demonstrated to be there in tangible form, then management will be held responsible for its loss. The assumption must be that management had misappropriated the money unless otherwise proven.

6. As for the GST, the additional fund raised through it is at the expense of the people. They have to pay more for everything they buy, which means their purchasing power is reduced. In other words they have become poorer, in order to enrich the Government.

7. Even if what they buy is not subject to GST, but the wholesalers who supply the retailers have to increase their price because they have to pay GST. The retailers in turn have to recover the higher cost by charging their customers more. In the end the people have to bear the GST cost.

8. The Government can avoid this additional tax on the people by reducing its own cost. Giving out money to all and sundry may be popular but in most cases the recipients do not really need the money. It is far better to educate and train people for higher-paying jobs when incomes would increase substantially in return for work done. Raising wages without increases in productivity, increasing the number of holidays, substituting those falling on weekends, fixing high minimum wages, wasting money on luxuries – all these increase Government expenditure, resulting in increased deficits. With better financial management the GST need not be imposed on the people.

9. Of course adventures such as the 1MDB and Pembinaan PFI only result in unsustainable borrowings. And when these adventures lose money, the financial burden of the Government is increased. By introducing the GST, Government is actually asking the people, including those who are not in the income tax bracket to bail out the Government.

10. An elected leader is not impervious to removal before his term is out. The previous PM was also elected, in fact with a bigger majority. But he was persuaded to step down by the current PM.

11. So what is wrong with asking the current PM to step down. He has obviously made a bigger mess of the country than the previous PM.

12. Before this, there was no talk of PM’s lavish spending, of purchases of expensive things, of a life of luxury. Some of these talks may not be true. But such talks were not heard during the tenure of the previous Prime Ministers. That there are such talks must be the result of a way of life that is different from what is expected of Prime Ministers.

13. For these and many other reasons, Najib should step down.

14. As to the big crowd in support, we all saw such demonstrations before the 13th General Election. The result was worst than the 12th GE. Those demonstrations do not translate into support for Najib. They come because of various incentives.