Spins and the Spinning Wheel of Price Increases

One of the meanings of spin AT THIS LINK is “to provide an interpretation of (a statement or event, for example), especially in a way meant to sway public opinion: “a messenger who spins bogus research into a vile theology of hatred” (William A. Henry III)”.

Wikipedia defines it as a form of propaganda achieved through providing an interpretation of an event or campaign to persuade public opinion in favor or against a certain organization or public figure. While traditional public relations may also rely on creative presentation of the facts, “spin” often, though not always, implies disingenuous, deceptive and/or highly manipulative tactics. In many countries, many accuse politicians of claiming to be honest and seek the truth while using spin tactics to manipulate public opinion. Are we an exception to this trend?

There is an interesting article in Malaysian Mirror about how the huge savings will be used for education and health. In that post, Prime Minister Najib Abdul Razak said that the measures that began yesterday as part of a gradual and selective removal of subsidies would have minimal impact on individual families but bring long-term benefits for the nation.

According to Malaysian Mirror:

“The reduction in expenditure from these reforms will allow us to better use resources for families, communities and business growth.” education-stages

For example, the more than RM750mil saved in expenditure this year would help fund the government scholarships that are guaranteed to all students scoring 9A+ and to other eligible students, he said.

The money would also help support health facilities such as the 1Malaysia Clinics, including the 1Malaysia mobile clinics.”

In addition, the government would continue with the standardisation of prices of essential goods in Sabah and Sarawak to reduce the burden on the rural dwellers, Najib said yesterday.

“The government has made a difficult, but bold decision. By choosing to implement these modest subsidy reforms, we have taken a crucial step in the right direction towards meeting our commitment to reduce the fiscal deficit, without overburdening the Malaysian people.

“These measures are a demonstration of our fiscal responsibility. They will enhance Malaysia’s financial stability, while also protecting the rakyat,” he added.

In this post, I will summarize the rationale given by the PM AT THIS LINK and also observations and opinions from readers.

Rationale # 1Hard but necessary change

The measures are:

Najib said the price rationalisation for fuel and sugar was the most minimal compared to the proposal by the Subsidy Rationalisation Lab because the government wanted to balance the public interest with the need to reduce the national deficit.

On the other hand, he said the subsidy for education and health would be maintained, and although there was rationalisation, the government still spent about RM7.82 billion annually on subsidy for fuel and sugar.

Rationale # 2 Public feedback

The government arrived at this decision following consultations with the people, not only with the policy makers in Putrajaya, but thousands of Malaysians through the Subsidy Rationalisation Lab Open Day, online voting, short messaging votes and feedback forms stating support for the review on the granting of subsidy in stages.

The granting of subsidy had to be reviewed to remove distortions in the marketplace and ensure that the subsidy was given to deserving groups.

It is to enable us to better target our resources on those most in need, and on investments that will provide lasting benefits for Malaysians.”

The decision to rationalise the prices of fuel and sugar was based on three main concerns, among which was the fact that all these subsidies did not meet the target, as it also benefited those who were ineligible such as foreigners and the wealthier Malaysians.

Rationale # 3 Cutting sugar usage is good

With 40% of Malaysians who are now overweight or obese – and the rising number of diabetes cases, this is a good way of tackling the health issue.

My response

1. I knew it was too good to be true when the PM guaranteed scholarships to all students scoring 9A+ and to other eligible students and now that offer is used to rationalize the removal of subsidies. Great!

2. If indeed the removal of subsidies can save RM750 million that can benefit the education and health care sector, why then propose the new health care financing system as reported HERE in New Straits Times? That scheme will bring in millions in contributions!!! So where will all that millions go? It is not possible that a high percentage of contributors will be seeking medical care at the same time. Also, many Malaysians have their own medical insurance schemes. Please read THIS LETTER published in MT about this issue.

3. The PM’s department:

4. I appeal to the PM’s department to explain how these price increases can (as presented in the Malaysian Mirror)