One other reason for voting a PSM candidate is because the PSM consistently asks the relevant questions.

There are many NGOs and other civil groups proposing schemes and programs designed to enhance the welfare of ordinary citizens. In the past two years, the PSM itself has put forward recommendations to

– implement an old age pension scheme. Our proposal was RM 500 per month for all those aged 65 and above, who do not enjoy any pension;

– increase the allocation of the health ministry to 5% of GDP (from its current 2.3%) so that the quality of treatment in Ministry of Health Hospitals can be improved;

– provide funds to the Local Councils to take over the maintenance of low-cost flats because many of them cannot be properly maintained by residents’ committees, and have deteriorated into urban ghettoes.

The usual response from Government is, “Your proposal is good, but unfortunately, the government is not in a position to implement it in the near future, because the budget deficit for this year is RM80 billion, and the government debt has exceeded RM 1.2 trillion at this point. This debt requires a payment of RM 56 billion to government bondholders in 2025.”

Most NGOs and other Civil Society groups do not know how to respond to this argument.

The PSM has studied the issue of budgetary deficits and sovereign debt in detail. In June 2023, we organized a two-day roundtable discussion where this issue was discussed with 25 NGOs and academic experts. Based on these efforts, PSM has put forward the following three questions to the government –

1. Why is it, that despite the fact the Malaysian GDP has increased 24 times (in real terms) in the past 50 years, the portion of GDP accruing to the federal government as revenue has shrunk from 30% in the 1980s to just 16% in the 2025 budget? What are the reasons for this?

2. Isn’t competition among ASEAN countries for foreign investors (FDI) the main cause of the problem of shrinking government revenue? Because all ASEAN countries have reduced their corporate taxes over the past 35 years in the hope of attracting more FDI. The Malaysian Government has reduced corporate tax from 40% of company profits in the 1980s to just 24% now. Thailand has reduced its corporate tax rate to 20% of company profits and Singapore is at 17%.

3. Given the fact that corporate tax is the largest component of government revenue, why has the Malaysian Government up till now not initiated a discussion with our ASEAN neighbours to resolve this issue? Surely this race to the bottom in corporate tax rates can be stopped if we put our minds to it.

It is not PSM’s intention to expropriate all the profits of corporations. (In fact, we are quite sympathetic to smaller businesses which are, as a rule, bullied by the largest corporations. We envisage lower tax rates for smaller businesses.) But we want this race to the bottom, which is detrimental to the people of all ASEAN countries, to stop and the corporate tax rate to be raised to a reasonable level. Afterall, the 24-fold GDP growth did not happen on its own. Didn’t the effort and sweat of our workers, farmers and small business people contribute to our GDP growth? Isn’t it reasonable that part of this wealth be used to strengthen social protection through schemes such as the old age pension and to improve the quality of treatment in our public hospitals.

Unfortunately, the mainstream political parties in Malaysia – PN, BN and PH – have not considered the issues outlined above. They are more inclined to consider various modalities of transferring the financial burden to the common people by re-instituting the GST tax, implementing the full payment scheme in government hospitals (now termed Rakan-KKM) and increasing treatment fees in public hospitals.

This is one of the reasons why the presence of a PSM elected representative in Perak will greatly benefit the common people in Perak and also throughout our country. At the very least, important questions related to people’s issues and the distribution of the nation’s wealth will be presented and discussed!

Vote PSM!

Jeyakumar Devaraj
Chairperson
Parti Sosialis Malaysia