Rafizi challenges BN to clear air over cheaper cars

By Lee Wei Lian

August 22, 2012

KUALA LUMPUR, Aug 22 — The government has to state its policy on reduction in car prices following a report in a national daily that the Najib administration has been considering the reduction of car prices in the revised National Automotive Policy (NAP) said PKR strategy director Rafizi Ramli today.

This comes after The Star quoted industry sources yesterday as saying that the revised NAP will include a policy that will address the gradual reduction of car prices in the country.

Rafizi said that he welcomed the news as it proved both that Pakatan Rakyat's proposal to of slashing car prices through a gradual reduction of excise duties was workable and the negative impact of high car prices.

He added, however, that it also showed the "hypocrisy" of Umno and Barisan Nasional leaders who had criticised Pakatan Rakyat who had first publicly mooted such an idea.

"Due to the conflicting messages that has been sent out by the leaders of Umno and Barisan Nasional, I urge the Minister of International Trade and Industry Datuk Seri Mustapa Mohamed who is responsible for revising the NAP to state clearly and directly to the public what is the real policy of Umno and Barisan Nasional towards reducing car prices?" he said in a statement today.

He added that if Mustapa agreed that prices should come down through gradual cuts in excise duties, he should sit and discuss the issue with Pakatan Rakyat as it was one area that enjoyed a consensus between the two coalitions.

Rafizi also urged Umno Youth leader Khairy Jamaluddin and Minister in Prime Minister's Department Tan Sri Mohamed Yakcop to retract their statements criticising his earlier proposal.

He also invited Khairy to promote the concept of reducing car prices by following the "Cheapmobile" — a 15-year old Proton Tiara that Rafizi said is used by Pakatan Rakyat during its cheap car campaign to symbolise the issue of automobile affordability in the country.

"Let's put aside partisan differences," he said when contacted by The Malaysian Insider. "Everyone is for cheaper cars."

Rafizi also said that the party is preparing to launch phase two of its campaign and take it nationwide after all 50,000 "Lower Car Prices" car stickers were fully distributed.

The emerging political star had on July 24 said that the opposition will offer a complete revamp of the NAP including slashing hefty excise duties and reducing the triple-tax burden imposed on cars here, should it come to power in the next general election.

He said in his media statement today that such a move would reduce household debt, force the government to upgrade public transport, enable the public to afford higher quality vehicles that offered better safety features that would help lower accident rates and cut subsidy expenditure by making energy efficient vehicles more affordable.

Rafizi concluded, however, that he had doubts over the "sincerity" of the government toward cheaper cars.
Malaysians are currently paying eye-watering excise duties of between 65 and 105 per cent on cars they buy on top of 10 per cent in sales tax, which means that if a Malaysian consumer pays RM100,000 for a car, as much as RM55,000 goes to the government.

The duties are a lucrative form of revenue for the federal government but have also helped push up household debt levels in Malaysia which, as a percentage of GDP, are the second highest in Asia
About 20 per cent of the RM581 billion total household debt in the country last year is being held in cars, an asset that depreciates over time.

Many Malaysians however say that they have little choice but to buy cars to get around as they feel they cannot depend on the public transportation system.

The taxes are seen by some economists to have distortionary effects and they say a cut could help stimulate the economy by boosting disposable income and reducing the household debt burden.