THANK you to the people who came up with the Prihatin and Penjana stimulus packages. Penjana is the fourth of six economic recovery phases: resolve, resilience, restart, recovery, revitalise and reform. It will “turbo-boost” some industries and, hopefully, its intended objectives will be met.

We do not know whether the stimulus from the earlier phases have been effective and reached the intended beneficiaries, knowing government bureaucracy. Even the Malaysian Trades Union Congress (MTUC) raised concerns over what it described as scant details for Penjana. Even for barbers and hairdressers, there are SOPs. It has been claimed that in reality, many employers are forcing workers to take unpaid leave while pocketing the money from the government.

I think for the other phases, it is better to start educating the rakyat on more productive uses for the money distributed, such as starting a small business or increasing financial literacy, like leveraging. Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime. It will give them more confidence and more in control of their lives, which could, ultimately, be one of the most important things to prepare us for becoming a developed nation.

Distributing cash constantly to certain industries may help in the short run but its effectiveness unclear for the long run. A study by Queen Mary University of London, published in the journal Basic and Applied Social Psychology, showed that people who have or earn more money may be less likely to share their wealth. Also, people with less will more likely spend money on essentials and non-luxury items, thus, creating a multiplier effect. 

Now, we have “Datuk Lim” benefiting from the bank moratorium and gaining from exemptions under the Human Resources Development Fund (HRDF). With extra cash flow, he is buying a flat and car for his children since there is tax exemption on house sales and cars. He is also enjoying free internet access and tax exemption for his new laptop.

There are several tax incentives for the real estate market under Penjana. The Home Ownership Campaign will be reintroduced with stamp duty exemption on property transfers limited to the first RM1 million in house value, subject to the condition of at least 10% discount on the house. 

I can understand if exemptions are given to affordable houses but not for those costing RM1 million. And, the discount could be better. There will also be Real Property Gains Tax (RPGT) exemption granted upon disposal of three residential units. 

Developers will clear unsold units and later build more high-end projects. If overhang occurs, they will again lobby for assistance. The government will again lose revenue and banks will have to support such projects at the expense of more profitable and sustainable ones.

Further, under current circumstances, people who can afford such houses do have a lot of money and do not need exemptions, and the fact that they will make a profit when disposing of property; can’t they share it with others by paying the RPGT? Remember the Queen Mary University study? 

The construction industry’s contribution may be almost 6% of gross domestic product (GDP), but we need to have a critical relook at the housing sector in the new normal.

Also, it is highly unlikely “Datuk Lim” will buy a national car for his children as it is a fast depreciating asset. For others, they are putting today’s happiness before future financial freedom and losing in foreign exchange.

I wonder whether has someone visited Makcik Kiah to ask how is she doing, and also Madam Lee, Haji Salleh and Surjit Kaur.

While under the conditional movement control order (CMCO), I do hope our minds are not imprisoned by the old ways of doing things. 

What say you… – June 7, 2020.

* Saleh Mohammed reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.