Thursday, April 16, 2015

REPORT ON STATE ASSEMBLY SESSION (30 MARCH - 9 APRIL 2015)

The state assembly was in session from 30 March to 9 April 2015. In this session, my policy speech focused on my concern over government involvements in business. Below are the details of my speech on this issue and the reply by the state government. In addition, I tabled five select committee reports (see below).  



Note: Select Committees are legislative committees which roles are to check on the government at different aspects of governance. I am in two of the 10 select committees in Selangor State Assembly - GLC and Raw Water Management. We have weekly select committee meetings and table reports every state assembly session. The government will have to respond to each recommendation on the reports the next state assembly session. Such legislative scrutiny is the result of legislative reforms in Selangor State Assembly and aims to improve the accountability and transparency of the government. As backbenchers, we are not to be the rubber-stamp of our own government. Our role is to continue to check and monitor the government, speak out when it is not doing right and ensure continuous improvement in governance. 

THE MAIN CONTENT OF MY POLICY SPEECH at STATE ASSEMBLY SESSION on 1 April 2015

Menteri Besar Incoporation (MBI) of Selangor has recently announced its intention to develop a total of 5,000 acres different parcels of state land to townships through joint venture with private developers. The total gross development value of these developments is estimated at RM 60 billion. I have reservation for such a plan and raised my concern in the recent state assembly session.  

I am not a proponent of government entering into business. I believe that profit-maximizing companies in the free market will generate greater economic impact than government-linked companies (GLCs), i.e creating more jobs and generating higher economic output.

Nevertheless, it is not uncommon to see different types of GLCs at both federal and state level in Malaysia. In fact, Malaysia is among the countries in the world with the highest GLCs presence, ranking fifth after China, United Arab Emirates, Russia and Indonesia.

Researches have found that GLCs usually generate less return compared to private companies in the same competitive industry. According to a McKinsey study, the average return on assets (ROA) at GLCs in China was less than half that of the private sector. The Economist also published similar results in an article “Fixing China Inc” dated 30 August 2014. It further elaborates the inherent problems for GLCs in China, which are also widely seen in Malaysia and Selangor, namely the social obligations of GLCs, bureaucracy, rent-seeking behavior due to lack of transparency and the lack of comparable industrial benchmarks.

In Selangor context, according to the report tabled by Selangor GLC Select Committee in the state assembly session November 2015, Perbadanan Kemajuan Negeri Selangor (PKNS) and Permodalan Negeri Selangor Berhad (PNSB), which are state GLCs in property development, perform much worse than property developers with private management. PKNS and PNSB recorded ROA of 0.12 and 0.0027 compared to Sunway 7.31, YTL Land 1.21, Mah Sing Group 6.97 and UEM Sunrise 6.92. The same goes to return on equity (ROE) with PKNS and PNSB recorded 0.21 and 0.069 while Sunway 16.39, YTL Land 2.61, Mah Sing Group 17.67 and UEM Sunrise 11.59.

The Myth of Joint Venture

We have often heard that joint venture with private companies will increase the return for GLCs. It is not necessarily so. According to the answer to my written questions in state assembly session November 2015, there are a total of 38 projects completed by PNSB through joint venture. However, PNSB still suffer return that is much lower than industry average.

We have also always heard that joint venture will help to transfer skills to GLCs. It is also not necessarily so. I would like to point out one example here - Selaman Sdn Bhd. According to auditor-general (AG) report 2013 Series 2, Selaman was formed in 1977 and have been using joint venture to develop its lands. Unfortunately, up until 2013 when the audit was done, the company was reported to be unable to do the development itself. From 1999-2013, Selaman managed to complete 14 projects, out of which only there projects were developed solely by the company itself. For the 3 projects, one at Sg Bakau, Kundang, Gombak was canceled, another one at Sg Merab, Dengkil, Sepal is still having land problem, and the only completed one was Karya Residensi 1 and it was also delayed for 52 weeks. This example shows that joint venture doesn't guarantee skill transfers.

As a matter of fact, we see that most of the time GLCs become sleeping partners in the joint ventures and sometimes being ‘manipulated’ or ‘play-out’ by the business partners.

In Selangor, we have no less bitter experience in GLC joint ventures. One of the most recent one is PJ Sentral case, of which PKNS entered into joint venture with Nusa Gapurna and was later forced out of it due to unfavorable clauses signed in the shareholder agreements, resulting in a lost of more than RM20 million in cash and 8 acres of prime land in Petaling Jaya. We also do not forget how “smart partnership” with Djiya for the 1,172 acres of Canal City land has turned into a “not so smart” deal for the government.

What is the business of the government?

All in all, what we really need to ponder is why does the government involve in business and what business should the government be involved in?

I believe that the government should only enter into business for one of the three reasons: i. to correct negative externalities of free market economy to achieve social and economic justice, for example, building low-cost flats as a result of income inequality ii. to manage the important natural resources, for example Petronas for Malaysia’s oil or water in Selangor iii. to stimulate the growth of certain strategic industries.

Therefore, I do not agree with MBI entering into joint venture with private developers to develop townships. Instead, I believe the state government through MBI should look into the strategic direction of certain parcel of lands, bringing in strategic international or local investors and tender out different parcels of lands according to that strategic direction. When joint venture is needed for strategic reason, such joint venture should be conducted in an open and transparent manner.

I believe it is more important for the government to attract investment, technology advancement and most importantly human talents to a particular area than to be involved in building the concretes.  I believe the business of the government is to create the macroenvironment that is conducive for businesses to grow and flourish, not getting into the business ourselves.

As a government, we should mind our own business.

REPLY FROM THE GOVERNMENT ON GOVERNMENT IN BUSINESS AND MBI JOINT-VENTURE PLAN (in Malay): 



GLC Select Committee Report on Selaman Sdn Bhd 




Raw Water Management Select Committee Report on Sungai Selangor Supply





Raw Water Management Select Committee Report on HORAS 600





Raw Water Management Select Committee Report on Water Disruptions due to Semenyih River Manganese Contamination




Raw Water Management Select Committee Report on Ammonia Contamination at Batu 11 Cheras and Bukit Tampoi in 2014 


Monday, March 2, 2015

What ISIS Really Wants

The Islamic State is no mere collection of psychopaths. It is a religious group with carefully considered beliefs, among them that it is a key agent of the coming apocalypse. Here’s what that means for its strategy—and for how to stop it.

By Graeme WoodMARCH 2015
The Atlantic

What is the Islamic State?

Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.

The group seized Mosul, Iraq, last June, and already rules an area larger than the United Kingdom. Abu Bakr al-Baghdadi has been its leader since May 2010, but until last summer, his most recent known appearance on film was a grainy mug shot from a stay in U.S. captivity at Camp Bucca during the occupation of Iraq. Then, on July 5 of last year, he stepped into the pulpit of the Great Mosque of al-Nuri in Mosul, to deliver a Ramadan sermon as the first caliph in generations—upgrading his resolution from grainy to high-definition, and his position from hunted guerrilla to commander of all Muslims. The inflow of jihadists that followed, from around the world, was unprecedented in its pace and volume, and is continuing.

Our ignorance of the Islamic State is in some ways understandable: It is a hermit kingdom; few have gone there and returned. Baghdadi has spoken on camera only once. But his address, and the Islamic State’s countless other propaganda videos and encyclicals, are online, and the caliphate’s supporters have toiled mightily to make their project knowable. We can gather that their state rejects peace as a matter of principle; that it hungers for genocide; that its religious views make it constitutionally incapable of certain types of change, even if that change might ensure its survival; and that it considers itself a harbinger of—and headline player in—the imminent end of the world.

Wednesday, February 25, 2015

Selangor to investigate all water disruptions

Selangor to investigate all water disruptions 

17 February, 2015

yeo bee yin kidexThe Selangor state government will be calling for a hearing with relevant water concessionaires over the shutdown of the Semenyih water treatment plant, which led to some 450,000 households with dry taps recently.
In addition, it will also be investigating all future water disruptions in the state.
Selangor Raw Water Management Special Select Committee chairman Yeo Bee Yin in a statement today said the committee will call Sungai Semenyih WTP operator Konsortium ABASS, Lembaga Urus Air Selangor (LUAS), Jabatan Alam Sekitar and Syabas to explain the shut down of the plant. 
“We will conduct a hearing next week to investigate the shut down of Sungai Semenyih water treatment plant. We are disappointed with the sudden shut down of the plant due to contamination, which has caused water disruptions four districts of Selangor – Petaling, Hulu Langat, Kuala Langat and Sepang,” she said.

Tuesday, February 17, 2015

Putting an End to Kidex: In Response to Azmin's Announcement

Finally a decision on Kidex was made. Below is our joint statement responding to the cancellation. We've been following-up with the issue since end of 2013. This is the photo in our press conference to call the work ministry to consider public transport alternative back in April 2014. 


Joint Media Statement by Rajiv Rishyakaran, Yeo Bee Yin, Ng Sze Han and Lau Weng San, State Assemblypersons of Bukit Gasing, Damansara Utama, Kinrara and Kampung Tunku on 16th February 2015. 

With YAB Azmin Ali's pronouncement putting an end to the proposed Kidex highway, which is bypassing the heart of Petaling Jaya, we are one with the residents of our affected constituencies who are thankful that this issue has finally come to a close. 

Sunday, February 15, 2015

Baseless to Relate Women Attire with Rape

Media Statement by Yeo Bee Yin, Chairwoman of DAP Wanita Petaling Jaya Utara Division and State Assemblywoman for Damansara Utama on Saturday 14 February 2015. (Malay and Chinese translations below) 

Statistics shown that it is baseless to claim that rape correlates with women attire.

Recent JAIS sermon correlating women attire to rape and the disagreement of DAP Wanita Chief Chong Eng followed by the involvement of police have sparked the debate on whether women should make certain choice of dress to avoid being raped.  

Friday, January 30, 2015

A Few Issues on Kidex

Here's my statement on the current status of Kidex and our position. 

Media Statement by Yeo Bee Yin State Assemblyperson of Damansara Utama on Tuesday 27 January 2015.

On Keeping Quiet on Kidex

I am writing this to clarify the allegation that we have been keeping quiet on the issue of Kidex. We have not and will not run away from our responsibility to raise issues that concern the people.  

Before I go any further, I would like to stress here again that Kidex now holds neither the State government nor MBPJ approval. The only approval they have now is from the federal government, which is extended until 15 Feb 2015.


Wednesday, October 22, 2014

废除煽动法令是当代的责任

20141016日,正当逾百名律师身穿西装大衣,在马来西亚炎热的天气下走上街头,参与“和平游行”力促政府废除煽动法令,巫青与民青团长却各自在推特上对此游行大泼冷水。作为青年领袖的他们理应为下一代发声,但他们这番言论却显示了他们仍被蒙在旧政治的阴影里,实为令人失望。

他们二人皆认为煽动法令起着反对极端言论及维持国家社群和谐的作用。也许他们已经忘记在实施煽动法令的多年后,我国的和谐已经跌到了历史的最低点。

持久性的和谐需透过教育与谈论、让不同的群体达成真正的理解才能达成,而非靠言论思想的压制及对持异议者的压迫。马来西亚的青年须勇敢拥抱彼此的差异,而非避而不谈。

凯里也指出引起人民对煽动法令不满是因为选择性起诉造成的,而非煽动法令本身。在此我想引用律师公会的备忘录:我们学习到的是,法律能否公平地执行不能取决于当权者的信实。法律本身必须是公正及合适的。《1948煽动法令》就不是这样的法令。

马来西亚年轻的一代应当紧记,我们是国家日后自由的守护者。我们不应害怕起来反抗不公正的法律,也不应为误导,轻信压制性法律是确保国家和谐的灵丹。

过去我国一而再,再而三容许法律压迫人民的自由。《1971年大专法令》已几乎抹杀了所有在马来西亚大学的学生运动,抑制了大学生们在学生时代理应拥有的批判思维。《1984年印刷及出版法令》则限制了新闻自由,促使民主及公正选举的全面衰退。

因此,屈服于压制性法律不再是我们这一代的选择。我们有责任去确保压制性法律在马来西亚的未来并无立足之地。或许届时会有人像国阵青年团长们一样,质疑反抗这律法的必要性,但当一切都埃尘落定时,历史会记载那些曾经为自由、公正及民主挺身而出的人们。


我是杨美盈,我支持废除煽动法令。


Friday, October 17, 2014

Budget 2015: GST, BRIM and Income Tax Cuts

The implementation of the Good and Services Tax, a higher BR1M and income tax cuts are some of the key elements in the Budget 2015.

Following the Budget 2015 to widen the scope of items that will not be subject to GST, the increased in the limit of electricity consumption not subject to GST and the exclusion of retail sale of RON95 petrol, diesel and LPG, we re-computed our analysis and believe that:

The net revenue collection from GST will likely to be less than RM 690 million due to GST fraud

1) After taking into account BR1M, the Budget 2015 estimated that the net revenue collection from GST will amount to RM 690 million per annum.
2) However, if this amount is estimated before the incidence of GST fraud, we believe that the practical amount might fall short of this realistically.
3) Besides, as the enforcement and monitoring costs might not be included, the net revenue raised might be even less.
4) Given that the expected fiscal deficit is 3.5% of GDP in 2014, the actual net revenue raised from GST might only contribute marginally to the aim of having a balanced budget.

Low and middle income households will bear a higher GST burden compared to high income households

5) Despite setting essential items like basic food, public transportation, education, healthcare, higher limit of electricity consumption, petrol, diesel and LPG as exempt or zero rated items, we find that GST itself remains a regressive tax (i.e. the low and middle income households will bear a higher tax burden than the higher income households).
6) This finding is consistent with the norm in international practice (e.g. the US tax administrator’s definition of regressive tax) and with international findings [e.g. “Does Australia Have a Good Income Tax System?” published in the International Business & Economics Research Journal (May 2013)].
7) Our research shows that the proportion of income paid as GST for:
a. Lowest income households (earning RM 605 per month) is 1.71%
b. Middle income households (earning RM 2,580 per month) is 2.01%
c. Highest income households (earning RM 31,850 per month) is 0.96%
8) Our conclusion that GST is a regressive tax is robust as it was undertaken using:
a. Bank Negara’s estimates of income/expenditure
b. The latest Household Expenditure Survey 2009/2010 from the Department of
Statistics
c. The stipulation that essential items like basic food, public transportation, education
and healthcare are exempt or zero rated items

The average Malaysian household pays RM 70 per month or 1.9% of income as GST

9) Our research shows that the average Malaysian household is expected to pay RM 70 per month or 1.9% of their income as GST.
10) We find that a higher GST burden (as a percentage of income) will fall on households in these categories:
a. Low and middle income
b. Single person household
c. Young (less than 24 years old)
d. Bumiputera led households
e. Clerical workers, skilled agricultural and fishery workers
f. Households residing in Peninsular Malaysia

The combined net effect of BR1M, GST and income tax cuts will benefit low and high income households as they will have more cash; but the middle income households are worse off with less cash. 

11) In the Budget 2015, a higher BR1M and income tax cuts are introduced at the same time as GST.
12) By combining BR1M, income tax cuts and GST, we find that the Budget 2015 measures will have these effect (as summarised in Figure 1):


Figure 1: Low and high income households benefit with more cash whilst middle income households will have less cash (combined effect of BR1M plus income tax savings minus GST payment)

a. Low income households will receive BR1M which exceeds the GST that will be payable. The net effect is additional cash between RM 607 to RM 828 per annum.
b. High income households will receive income tax savings due to tax cuts that will exceed the GST payable, giving additional cash of RM 4,296 per annum.
c. Middle income households will neither receive BR1M nor benefit much from income tax cuts; but will have to pay GST. Consequently, they will end up having less cash – approximately RM 708 per annum. The annual household incomes for these middle income households are approximately between RM 55,000 to RM 110,000 per annum.
13) According to the Household Income Survey 2012, the average household income in Malaysia is RM 5,000 per month (RM 60,000 per annum). Therefore, we believe that the combined effect will result in the average Malaysian household having less cash to spend.

For more information on our research and on our interactive spreadsheet detailing the impact on different households, visit:
http://www.penanginstitute.org/gst/

Press statement by: 
1. Dr Lim Kim Hwa, Chief Executive Officer and Head of Economics, Penang Institute
2. Dr Lim Chee Han, Senior Analyst, Penang Institute
3. Ms Ong Wooi Leng, Senior Analyst, Penang Institute
4. Mr Tim Niklas Schoepp, Visiting Analyst, Penang Institute