It’s election time again …
Tuesday, May 8th, 2007 | 9:07 am @ SK
[UPDATED VERSION] More indications!
- Feel good factor.
- It’s the pay-rise season again, for civil servants and school heads.
- Northern and Eastern Corridors, starts with a RM23.9bil project.
Obviously, the election is around the corner. I heard someone said Sweet November is a nice movie, you sure? Feeling good with the Pak Lah way?
May 7th, 2007 at 10:06 pm
Sebelum tarikh pilihanraya diumumkan pun terdapat harga barang-barang dan perkhidmatan sudah mula naik! :)
May 8th, 2007 at 9:24 pm
May 8th, 2007 at 9:25 pm
Let Praise When Praise is Due.
In good time and about time. As they say never too late.
Its not debated and passed through in Parliament yet, but hey, this is a good start. I praise Pak Lah for making the announcement, its good politics.
This is monetary and fiscal expansion, because Govt has to print more money to do this, its not likeky to be financed solely from the country’s revenue (tax) and fiscal because its increases Govt expenditure.
Classic Keynesian expansion.
The resulting economic growth effect wouldnt be felt, provided that the quantum of pay rise is significant enough, wouldnt be felt until 12 to 18 month in the future. So dont expect to see a rise in inflationary expectation yet.
Why?
The lower income civil servants, the bottom of the food chain, has such a low income that they have to supplement by working other jobs.
Lets assume that the Govt give a pay rise of 40% for the lowest income. (The lowest payscale is RM450 a month) This might change the work-leisure behaviour of the worker affected in the longer term. Yet in the short term, nothing changes. In the immediate short term, extra money from pay rise would most likeky be used to pay debts. After that, the immediate needs, like better food and clothing, motorbike etc.
Only then this pay rise has economic impact on the country’s economic activity.
What if the pay rise is insignificant? Like 10% or 20%?
The euphoria might turn into anger, and the civil servants might as well campaign for the opposition in the next election.
If the de facto opposition leader, Anwar Ibrahim read this, he better come up with a much better economic manifesto.
E.g:
1. Pay rise for Govt servant at least 100% for the lowest income. (hey, thats only RM900 per month for 42? hour week) And maybe 10,8,5% for those already above RM900 a month.
2. Minimum wage law for those in the private sector.
3. Fiscal responsibility law for the Govt so that Govt wont be able to spend money on useless things.
4. Freeing up financial markets.
and a few other things.
Ijok Byelection has set a precedent, VOTERS need to be BRIBED!
May 9th, 2007 at 9:55 pm
The last three years by AAB were a period of failures. Reducing the budget deficit alone get you no points with the rakyat when many businesses come within the danger point of folding up. If this continues, AAB might as well close shop or the rakyat will do it for him.
Lately he has been practising more liberal fiscal policies to create a more effective "feel good" experience. The billion-dollar river cleaning contract, the multi-billion dollar oil pipe line up north, salary increase for civil servants, etc. all point to a different strategy to ensure he stays in office. Elections are round the corner, no more than 4 months away, I believe.