HSE, Quality and Risk Management Blog

My analysis on Budget 2011 Part 1

The budget 2011 is out. It was said to drive Malaysia towards a high-income country by 2020. Is it true? Let’s have an eagle-eye on this matter.

One of the points being raised in the budget, which extremely attracted my attention is the absence of the Bonus for civil servants, replaced by RM 500 incentives.

By doing so, the Government would reduce RM 3.1 billion in expense.

At the same time, another landmark would be built – Warisan Merdeka. It would be a 100-storey, tallest building in Malaysia. The cost : RM 5 billion.

My question is, what do we really need to become a high-income country? A financial bonus at the end of the year, or a new building?

Let me analyze this thoroughly.

1. By giving bonuses instead of building the Warisan Merdeka, the government would save RM 1.9 billion to be used in the next years.

2. By giving the civil servants the 13th month salary, their average salary would increase more than just by giving RM 500 to certain individuals. In becoming a high-income, which average is more important? Additional RM 500 or additional one month salary? The calculation will say – Bonuses of one month salary.

3. We have an estimated of 1.35 million civil servants (and sub-civil servants) in Malaysia. Divided by RM 3.1 billion, the average would be RM 2296 per civil servant. Of course, some will get more, and some will get less, but it is still, more than 4 times of RM 500 incentives offered.

4. Do you really want to drive Malaysia to a higher income or to save RM 3.1 billion but still spend RM 5 billion on other things? You might say RM 5 billion will be RM 1 billion each year as the project is on 5-year basis, don’t lie! Never ever a big projects use 100% of money allocated. Just see the new Istana Negara, or PKFZ for example. If you ever got one, prove me so, and i will take back my words. The money spent within the construction would be at least 2 times more. Certain might go up to 14 times more! If brave enough, let’s audit thoroughly and sincerely all the government’s project, and see how they were not so “siratul mustakim”. Bakun lost RM 1.8 billion. Project “Koridor sana-sini” lost RM 2.8 billlion. Numbers don’t lie, but politicians use numbers to lie.

5. Let me tell you know the logics why some individuals will need the Warisan Merdeka to be built.

6. The first person who will need this is the Prime Minister himself. Why? Let’s go back to Abdullah Badawi’s legacy. No physical proof that he’s been there. Najib Razak would not like to end his tenure in the same manner. If Mahathir Mohamed has built KLCC, he should built something better. What is better than a KLCC? A higher building than the KLCC itself. Easy to guess right?

6b. Warisan Merdeka will strengthen the 1Malaysia concept. At least, some of his thinkers might think so. But did the relation between major races become closer after the introduction of KLCC? Think.

7. Another some politicians would say that by building Warisan Merdeka, it would give jobs opportunities to thousands of Malaysians. Let me tell you this in 3 more detailed steps.

a.) Jobs opportunities for those before the Warisan Merdeka is built : contracts, money to those contractors, very well bonded with the government for sure. For Us “normal” people, nothing at all! Don’t ever dream to touch even a single cent of the RM 5 Billion allocated. 

b.) Jobs opportunities for those during the construction of Warisan Merdeka : Let me say, out of 6 workers, there would be 1 Engineers or Managers. Other persons : labors. The labors would they be Malaysian? I doubt it would be so. Out of RM 5 billion invested, half will go the payment of workers. OR RM 2.5 billions. Let’s us estimate that engineers/managers salaries are 3 times more than those labors. By the ratio 6 : 1, the managers will gain RM 1.25 billion in salary. Are all engineers and managers Malaysians? NO! And added to another RM 1.25 billion will go to the foreign labors, Malaysian workforce will be estimated at RM 1 billion more for the period of 5 years! Or RM 200 million per year! Do you want ALL your civil servants to gain RM 3100 million more or only some of them (mostly private) 200 million more? High-income, oh high-income…please lah…

c.) Jobs opportunities after the construction : the analysis for this would only be revealed when i have more information, on what business plan the Warisan Merdeka is going to have. With the inaccurate data i have until now, impossible to do so. By building a new international airport, you may have as far as 1% of annual growth in term of GDP, building a new skyscraper, won’t be affecting as much, perhaps 0.1%, only if you are as lucky as China and their World Trade Center might be. And we’re chasing Singapore’s growth of 17,9% sir!

8. Now you have seen all the calculations, all the proof about only one of the budget 2011 details. “Tepuk dada tanya selera” lah. Who will be the higher income gainer in 2020? You people or they, politicians?

Enough said now for the bonuses.

Don’t just see and agree. Observe, and analyze, this will open your eyes.

Have a nice day.

October 16, 2010 - Posted by Mohd Zhafran | Risk Management | Budget 2011, no bonus, Warisan Merdeka