Who sets the agenda?

So what is the solution then? I am not sure but maybe Anwar Ibrahim who opposed subsidies for fishermen and farmers when he was the Agriculture Minister can enlighten us since he concluded that subsidies for those at the lowest rung of the economic ladder help the rich rather than the poor.


Raja Petra Kamarudin

A good sleight of hand would be one where you do not even see the ‘magic’ trick. The ‘magician’ very cleverly makes you focus on one hand while the trick is executed with the other hand. Hence what you see is ‘magic’.

Politicians, all over the world, work on the same premise. They, too, perform sleights of hand to make you focus on one issue so that you do not notice the other and more important issue. This can be called WMD or weapon of mass distraction.

Basically, you set the agenda and make everyone focus on a certain issue and not on something else that may be more damaging or embarrassing.

Just look at what has been in the news over the last couple of months. We have the ‘minority government’ issue, the ‘May 13’ movie issue, the DAP party elections issue, the canteen in the toilet issue, the ‘seditious’ Malaysian flag issue, the Buddhists praying in the surau issue, the shooting of the gangsters issue, the Hindu temple issue, the Selangor ‘water shortage’ issue, the ‘illegal immigrants’ issue, the Allah word issue, and now the RM0.20 increase in the price of petrol issue (amongst just some of the many issues).

You may not have noticed but all these ‘issues’ are a ‘make-them-look-bad’ strategy. It is about running down the other side to make them look bad. At the end of the day, even if these issues never cropped up or are settled, will that make our life better? Will it give us what is more important in life — a quality of life?

When politicians set the agenda that may not necessarily mean that agenda is in our interest. It is in the interest of the politicians. But they will have to make it appear like it is in our interest. Hence the issue, although real, will have to be slanted in a certain direction to meet this objective.

Let’s discuss just one of those many issues, the latest ‘hot’ issue, and that would be regarding subsidies. Most of us feel that subsidies should be maintained so that prices can remain low. Hence the government pays for the differential in price. We also want taxes reduced or, if possible, removed altogether. Hence the government will pay for everything and we pay for nothing. That, to us, is the ideal government.

But how would the government pay for everything and we pay for nothing when there are no taxes or lesser taxes to collect? Have you not heard that there is no such thing as a free lunch? Someone, somewhere, has to pay for it. There is nothing free in life. So whatever freebies the government gives us must come from somewhere. And that somewhere would have to be the taxes that we pay.

The wage earner will have to pay taxes because their salaries are fixed and documented. Hence there is no running away from taxes. The tycoons and capitalists, however, are able to run away from taxes and just pay a nominal amount, which is far short of their actual wealth or earnings.

Hence the ‘poor’ pay full taxes while the rich get away with a lot of tax ‘savings’. Hence, also, the ‘poor’ pay more taxes than the rich (percentage wise) and, therefore, it is the money from the poor that pays the cost of the subsidies that benefit the rich.

Take petrol as one example. The ‘poor’ may have one small car that does not consume a lot of fuel. In fact, it may even be an eco-car (which in the UK would be road tax exempt). The rich, however, own a fleet of gas-guzzlers that may consume more fuel in a day than the poor man’s car consumes in a month.

So who benefits from the fuel subsidy? The ‘poor’ man who owns one car and consumes, say, RM200 worth of fuel a month or the tycoon businessman who owns a fleet of expensive cars that consume, say, RM2,000 worth of fuel a month?

Subsidies have always been a headache for the government since the 1970s. And that was why when Anwar Ibrahim became the Agriculture Minister in the 1980s he REMOVED the subsidies for fishermen and farmers.

Fishermen and farmers are supposed to be at the lowest rung of the economic ladder. If Anwar believes that subsidies can help the poorest segment of Malaysian society, why remove the subsidies? Why not increase the subsidies when fishermen and farmers are so poor?

Well, that is because the subsidies for fishermen and farmers DO NOT benefit the fishermen and farmers. They benefit the middlemen, the traders, the businessmen — those who buy from the fishermen and farmers to sell to us, the consumers. The fishermen and farmers do not get any richer. The businessmen do. And because of that Anwar removed the subsidies.

Because fishermen get a subsidy for fuel, the cost of the fish becomes cheaper. But the reduced price of fish is not transferred to us, the consumer. In fact, the cost of fish in fishing states like Terengganu is more expensive than in Kuala Lumpur. So the poor people in Terengganu have to pay more for their fish than the rich people in Kuala Lumpur do.

Then there is the problem of fraud. Say the fishermen need RM500 worth of fuel for one fishing trip. They buy RM1,000 worth of fuel at a subsidised price and sell half to the traders at a profit. The traders then sell this black market fuel to the consumers at normal market price (say like factories and sawmills). So the subsidies do not really help reduce the price of fish. It just helps the recipients of the subsidies plus the traders to make money on the black market.

So we, the taxpayers, are merely helping the exploiters of the subsidies to make money. And we still end up paying a high price for the fish we buy. And, to add insult to injury, the poorer the state, the more expensive the fish price. It came to a stage that the people in Terengganu ate chicken instead of fish because fish was just too expensive in spite of the hundreds of millions of our money that the government was spending in trying to keep the price of fish low.

The same occurred with regards to the subsidies for the rice industry. The government spent hundreds of millions in subsidies for the rice industry. The rice farmers, however, remained poor. But the rice millers and rice traders became even richer because now they could pay a lower price for the rice they bought but still sold the rice at a high price to the consumers.

The government supplied fishing nets and fertilizers free-of-charge to the fishermen and farmers to subsidise the fishing and rice industry. A lot of these fishing nets and fertilizers were then sold back to the traders at a reduced price since the fishermen and farmers got them free anyway. The traders then sold them on the market at normal market prices.

Hence the fishermen and farmers made money selling what the government gave them free while the traders also made money selling what they bought at half price at normal market prices. And we, the consumer, still paid a high price for the fish and rice that we ate — which was even more expensive in poor fishing/farming states like Terengganu.

Subsidies do not always work. Sometimes those who pay for these subsidies (the taxpayers) do not really benefit from the subsidies. The poor pay while the rich benefit from these subsidies. This has been the problem faced by the government for 40 years since the 1970s and was the reason why in the 1980s Anwar decided to end the subsidy policy.

We need to look at a new way in how to help the less fortunate or the low-income citizens. Policies such as subsidised fuel may not really help the less fortunate or low-income population. The more fuel you burn the more money you save. And those who can afford to pay would be those who burn more fuel while those who cannot afford to pay are subsidising them through their taxes.

You may think that you do not pay income tax because your salary is too low. But while you may not be paying income tax you are paying other taxes. As they say, there are two things you cannot escape — death and taxes. And subsidies, which are paid for from your taxes, are more beneficial to the rich than to the poor since everyone will receive the benefit of these subsidies, the rich included.

So what is the solution then? I am not sure but maybe Anwar Ibrahim who opposed subsidies for fishermen and farmers when he was the Agriculture Minister can enlighten us since he concluded that subsidies for those at the lowest rung of the economic ladder help the rich rather than the poor.

In fact, I remember Anwar replying to the question as to why he wanted to end subsidies for fisherman and farmers. He said: we do not want a nation that survives on subsidies. But then at that time he was an Umno Minister and not the leader of the opposition — so maybe today he has a different opinion regarding subsidies.