Distribute part of Petronas’ profit to poor families
Extracted from Harakahdaily
Lim Guan Eng
Sat | Jun 30, 07 | 06:00:35 PM
The government can distribute part of Petronas record pre-tax profits of RM 76.3 billion this year to the 40% of Malaysian households that do not earn the average household monthly income of RM 3,249 by giving RM 5,000 yearly per household. BN’s failure at equitable wealth distribution is proven by the Ninth Malaysian Plan (9MP), where the income share of the bottom 40% of households decreased from 14% in 1999 to 13.5% in 2004 while that of the top 20% of households increased from 50.5% to 51.2%.
Clearly this bottom 40% of households do not earn the average household monthly income of RM 3,249. The United Nations Human Development Report has consistently placed Malaysia has the country with the worst income inequality between the rich and poor in South East Asia.
The 9.9% rise in pre-tax profit for Petronas to a record RM 76.3 billion for the financial year (FY) ended March 31, 2007 from RM 69.4 billion in 2006 should be shared with Malaysians, especially to uplift the living standards of 40% of Malaysians who are unable to enjoy the national mean monthly household income of RM 3,249. Petronas’ net profit rose 7.7 percent to RM 46.4 billion from RM 43.1 billion the previous year.
These earnings have resulted in Petronas paying RM 53.7 billion in taxes, royalties, dividends and export duties for 2007. Over the past 33 years, Petronas had returned RM336 billion to the Government. However the people have received very little in direct benefits from the oil windfall whether in marked improvement in standards of living or direct cash grants.
Until today the government still can not explain why an oil importer like Singapore without a single drop of oil can afford to give cash grants of RM5,000 to poor families annually whereas not a single cent of oil revenues have been given to Malaysians. Petronas is so wealthy that even if Petronas assumes the responsibility of giving RM5,000 for the bottom 40% households in Malaysia, it would still have tens of billions left over to run its operations.
What is the point of having a booming stock market or RM 1 trillion annual trade volume or a feel-good economy when many have not benefited and find difficulty in bearing the financial hardships of inflation, rising prices coupled with no annual bonuses nor real wage increases this year?
DAP can not accept such failure of wealth distribution where only the rich prosper whilst the vast majority are marginalized. RM3,249 is the national average monthly household income. The income disparity is higher in states of Selangor and Federal Territory with average monthly household of RM 5,175 and RM 5,011 respectively in 2004. Does every family in Selangor or Federal Territory earn more than RM 5.000 monthly?
Petronas warning of Malaysia becoming an oil importer by 2010 requires immediate dumping of failed economic policies like the NEP
Of greater concern is Petronas CEO Tan Sri Hassan Merican’s warning that Malaysia will become a net importer of crude oil by 2010 if domestic demand growth grows at an annual rate of 4%. As at Jan. 1, 2007, Malaysia had 5.36 billion barrels of crude oil and condensate reserves.
Oil revenue makes up more than 40% of our annual budget revenue. By 2010, such streams of revenue is no longer available. Are we ready to live without oil which has been the engine for our economic growth and prosperity?
The continuation of failed economic policies like the New Economic Policy(NEP) and Malaysia’s declining oil reserves, will damage future economic growth and prosperity. The twin impediments of the anti-competition, anti-growth and anti-trade NEP as well as declining oil reserves are huge challenges that the Malaysian government has not even begun to address.
This oil revenue has allowed Malaysia to cushion the negative impact from mismanagement, wastage of public funds and corruption scandals that have plagued Malaysian society and would otherwise have crippled Malaysia’s economy. Without oil revenues by 2010, one wonders where Malaysia is going to find the RM54 billion or fill in the 40% gap in the nation’s finances.
Without oil resources, a country’s economic growth would depend on comparative and competitive advantages. As comparative advantage has been fully utilized in all countries, economic growth is now fuelled by competitive advantages especially in producing goods and services which are of good quality and reasonable prices. As indicated by the EU Ambassador to Malaysia Dr Thierry Rommel, the NEP has harmed instead of helped Malaysia to improve our competitive advantages.
With the advent of Malaysia being an oil importer, it is more crucial and critical that anti-competitive economic practices and policies such as the NEP must be dumped. The BN government has to put aside the political, racial and historical burdens and stop being stubborn in continuing with outdated policies if Malaysia is to progress in the market economy and globalised world of the 21st century.