MP SPEAKS When I ask “Can we pay people to take buses?” Many will instantly reply with a big “No!”

But if we delve deeper into publicly funded public transport (specifically buses as other modes are costlier to fund and slower to realise) it may be the answer to most of Malaysia’s economic and fiscal challenges.

The Najib administration is bent on doing two things at once in the coming financial year; implementing GST from April 1, and according to Minister in the Prime Minister’s Department, Idris Jala, increasing the petrol price by 30 to 50 percent (this is of course euphemistically called “subsidy rationalisation”).

On GST, Prime Minister Najib Abdul Razak has been is ill-advised by the treasury, his economic advisors, as well as accounting firms (who happen to be the only beneficiaries in the implementation of GST) to see it as the solution to balance the books.

He will pay a very heavy political price soon, first for not thinking it through; second, for not tackling corruption and wastage before imposing a draconian new tax; and, third, for not looking at other options.

GST is a new tax requiring millions of Malaysians who never had to pay tax before to do so whenever they consume.

Of course even now there are tax evaders but we have adequate laws dealing with them. So tax evasion is not the issue.

The truth is most people don’t have to pay tax simply because they don’t make enough to reach the threshold to pay tax.

Even the government understands this reality and gives out the BR1M goodies to families whose monthly incomes are less than RM4,000. More than 60 percent of the population are in this category.

Yet it is absolutely amusing to see Najib ( left ) claiming that GST is “fair” as it spreads the tax burden from the 1.2 million actual taxpayers to everyone.

Implementing GST at this income level means further depleting the already tight disposable income of the bottom 60 percent.

The human suffering is going to be huge. Not to mention the negative impact on domestic demand hence the economy as a whole.

Domestic demand has been the lifeline for Malaysia’s economy since the global financial crisis, as external markets slow or stagnate.

The government’s ‘carrot’ in the GST implementation is to cut income tax, which inevitably results in a more unequal society. 

Policy sequencing

On fuel, in theory, when petrol and diesel are not subsidised, there will be no smuggling, no requirement in the budget for subsidies, and fuels will be used more efficiently which will also mean less carbon emissions.

But what comes first, matters as much as what we do. Policy sequencing is as important as the policy itself.

To increase petrol price without providing adequate and efficient public transport means ‘killing’ people by sending Kancil, Viva and other small car drivers in the low income group to use motorcycles, which are far more susceptible to accidents.

Already, according to World Health Organisation’s Road Safety Report 2013, Malaysia has the highest deaths on the road per 100,000 population in the world. (India – 18.9; Russia – 18.6; China – 20.5; Malaysia - 25).

Somehow no one is alarmed by this and no one cares to say anything about this massive loss of life daily.

Motorcyclists make up 60 percent of deaths on the road.

Fuel price should only be placed at market price without subsidy if public transport services are at a level efficient enough for motorcyclists to leave their bikes at home. 

Otherwise policy makers have blood in their hands.

A very good European bus costs around RM600,000. The annual operating cost of a bus is generally not more than RM200,000, staff and fuel costs included.

So, RM2 million will buy you a bus with seven years of operating costs. On the back of an envelope, RM2 billion will give you one thousand buses.

Mind you, Kuala Lumpur has less than a thousand buses now, though it had at least 1500 units of buses in 1985 when Proton was not yet launched (hence buses were almost the only mode of transport for many) and when minibuses were around.

The fuel subsidy is RM29 billion for 2014. It can pay for many buses for many years, and, among other things, delay the need to implement GST.   

LIEW CHIN TONG is member of Parliament for Kluang and Johor DAP chairperson.