Tuesday 11 September 2012

RM3.5b lost through APs can be used to lower car prices

PKR insists that its proposal to bring down car prices is workable and challenges Mukhriz Mahathir to debate the issue. 
PETALING JAYA: International Trade and Industry Deputy Minister Mukhriz Mahathir’s recent statement has “validated” Pakatan Rakyat’s proposal to bring down the price of cars.
PKR strategy director, Rafizi Ramli, said Mukhriz had carelessly admitted that the government had enough funds to execute the policy proposal, which involves the slashing of excise tax.
Last Friday, Muhkriz criticised the opposition’s current campaign as a populist move and may lead to the country’s bankruptcy.
“They did not explain where they’ll get the money from and a PKR leader said that to increase government revenue, they would sell approved permits [APs] through a bidding process.
“If we apply their method, the person who offers the highest price will win. From our estimates, the APs will be priced between RM50,000 and RM60,000.
“If that was done, how can we bring down the price of cars? That’s just the AP price, we haven’t calculated the car costs,” the Jerlun MP said at a Wanita Umno function recently.
Said Rafizi: “Mukhriz’s statement confirms the estimate that APs will fetch RM60,000 each if we go through open tenders,” he said.
He said this meant that all this while, the 70,000 APs issued each year would incur the country a loss of between RM3 billion to RM3.5 billion.
This was after the government charged RM10,000 for each AP issued without an open tender.
“For each AP, the country and rakyat lose up to RM50,000. This amount goes into the pockets of those with interests due to this Umno-BN policy, which is not transparent,” said Rafizi.
Money will be pumped back
He said if an open tender for APs was held, as he previously proposed, this RM3 billion to RM3.5 billion would become revenue for the country.
“This would then be a source of funds for us to accomodate our new policy of reducing car prices by cutting excise duty in stages.
“The loss of revenue and income we get will be enough to pay for this policy, at least in three to four years.
“By which time, the money we pump back into the local economy would already increase consumption and profits,” said Rafizi.
“It also proves that the government is able to implement this policy if the BN government was truly sincere about listening to the rakyat,” he added.
Rafizi said that Mukhriz’s statement seems to side with rich and those car traders who are already earning too much from the current AP system.
“His complaints that the high price of AP, through open bidding, would cause car prices to go up shows that he wants to protect the huge earnings now being enjoyed by interested groups.”
Rafizi said that Mukhriz does not fully understand the mechanisms in place, arguing that it would be more beneficial if car sellers compete among each other in an open market.
“When AP prices go up and car prices go down, they have no other choice but to decrease their profit margin that has all this while been too much,” he said.
“I’m more than convinced that it can actually be done,” said Rafizi.
Overwhelming response
He issued a challenge to Mukhriz to debate the issue this Thursday at a forum at the Chinese Assembly Hall in Kuala Lumpur.
Meanwhile, PKR communications director Nik Nazmi Nik Ahmad said that the forum was phase two of the PKR campaign, “turunhargakereta”.
Among the panellists will be PAS’ Dr Dzulkefly Ahmad, DAP’s Tony Pua, IDEAS (Institute for Democracy and Economic Affairs) think-tank chief Wan Saiful Wan Jan and Rafizi.
Nik Nazmi said that during phase one, PKR distributed stickers in the Klang Valley and in Penang, and the response has been overwhelming, especially from the “fence-sitters”.
“This is an issue with a lot of strong interest, even from Umno people. We are seeing a crowd that is not normally political or partisan, in making queries and liking our Facebook page.
“They can call it populist or whatever, but we believe it is simply a common sense policy that benefits the people.”
Pakatan Rakyat had declared its intention to make its promise to cut hefty excise duties and sales taxes on cars as one of its major election campaign planks.
Duties and taxes make up close to 100% of the total amount Malaysians pay for a car, making prices here among the highest in the region.
Pakatan’s political rivals have blasted the proposal as an election ploy, saying the opposition bloc will likely draft a new tax scheme to compensate the loss in government revenue generated from car taxes, estimated to be around RM8 billion annually.

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