Brief Ideas 2019-10-30T13:38:38+00:00
Brief IDEAS No 18: GLC Monitor 2019 - State of Play Since GE14
Author: Terence Gomez, Lau Zheng Zhou, Yash Shewandas
Date: October 2019

Before the general election in 2018, the Pakatan Harapan (PH) coalition promised to reform governance of government-linked companies (GLCs). These reforms included ensuring that the appointment of members of these boards of directors would be made based on merit, not on political considerations.

These were important pledges because Najib Razak, in his dual role as Prime Minister and Finance Minister, had effective control over government-linked investment companies (GLICs) which had majority equity ownership of a broad range of commercial enterprises. This concentration of political and corporate power in the hands of the Prime Minister had contributed to serious abuse of public institutions to advance the political interests of his party, UMNO, in key parliamentary constituencies while also contributing to serious corruption.

Brief IDEAS No 17: A Counter-Cyclical Tax Reform
Author: Carmelo Ferlito
Date: October 2019

In this brief Dr Carmelo identifies that business cycles are unavoidable and to address this, policy makers should establish a set of rules which help to prevent the economy from overheating and cushion the impact when the economy inevitably slows down.To achieve the Dr Carmelo proposes three reforms to Malaysia’s tax system:

  • First, a reformed, more progressive GST to replace the existing and controversial SST.
  • Second, a progressive Capital Gains Tax (CGT) on profits made from the disposal of assets, including company shares.
  • Third, to reformed and reduced income tax to balance the increase in indirect taxation proposed with a new goods and services tax (GST) and a new capital gain tax (CGT)
IDEAS Position Paper: Making Shared Prosperity a Reality in Budget 2020
Author: IDEAS Research Team
Date: September 2019

In this Position Paper, IDEAS put forward the following proposals:

  • A Living Wage Tax Credit. Under this proposal, employers will be incentivised – but not required – to increase wages beyond the Minimum Wage, up to a new Living Wage.
  • Employee Equity Scheme. Under this proposal, employers will  be incentivised to allocate shares to their employees, in order to promote broader distribution of wealth and to provide lower income households with new sources of income and savings.
  • Capital Gains Tax. IDEAS proposes the Government should introduce a Capital Gains Tax (CGT), which is a tax on the profits made on the disposal of assets, including shares.
  • Government Divestment Strategy. IDEAS proposes the Government initiates a Divestment Strategy to create space for new investment and stimulate local business development.

IDEAS believe these proposals can contribute to a bold new economic strategy in Malaysia and help to make shared prosperity a reality: an innovative approach to reaching a Living Wage and higher ownership of Malaysia’s corporate equity by Malaysia’s workers, combined with liberalisation of Malaysia’s capital markets leading to new opportunities for investors to stimulate growth in the economy, at the cost of a modest tax on the profits they make from doing so.

Brief IDEAS No 15 – Responsible Privatisation: A New Malaysian Model of the role of government in the economy
Author: Faiz Abdul Halim and Aira Azhari
Date: March 2019

In response to calls for a more effective plan to address corruption, the National Anti-Corruption Plan (NACP) was launched on January 29th, 2019 by the National Centre for Governance, Integrity and Anti-Corruption (GIACC) under the Prime Minister’s Department (PMD). The goal of the NACP is to create a corruption-free society governed by the principles of integrity, accountability and transparency. The NACP serves as the primary anti-corruption policy framework for different government agencies and ministries so that they may develop their own Organisational Anti-Corruption Plan (OACP).

This brief paper will give an overview of the current procurement regime. Next, the paper will briefly look into cases of corruption, negligence, and non-compliance in procurement. This paper will provide full list of Strategy 3’s 16 initiatives. Due to limitations within this paper, we will attempt to evaluate a few select issues and initiatives within the strategy 3, alongside relevant initiatives from other Strategies. With occasional reference to previous literature on public procurement in Malaysia, this paper will provide a general evaluation of those specific initiatives. This paper then provides a few recommendations to improve these initiatives.

Brief IDEAS No 15 – Responsible Privatisation: A New Malaysian Model of the role of government in the economy
Author: Dr Geoffrey Williams
Date: January 2019

This paper takes a fresh look at the issue of privatisation in Malaysia and examines whether the concerns raised by earlier privatisation programmes can be addressed by a new concept of ‘Responsible Privatisation.’

The prospect of a new wave of privatisation in Malaysia has been raised in the first budget speech of the new Pakatan Harapan (PH) government and in recent announcements that preceded it. The focus is to reduce the role of the Government in the economy and dispose of particular assets as a potential means of raising money to cut Malaysia’s national debt. For many this raises the spectre of past experiences of privatisation which are characterised as being plagued by cronyism, expropriation of profits at the expense of the Rakyat and a loss of social and strategic focus in Malaysia’s development.

Brief IDEAS No 14 – CPTPP: The Case for Ratification
Author: Laurence Todd, Manucheher Shafee
Date: January 2019

The CPTPP is the successor to the Trans-Pacific Partnership (TPP), which was the original free trade agreement (FTA) between the United States and the 11 members of the CPTPP. The TPP was an ambitious FTA that had been negotiated for almost a decade under US leadership during the time of the Obama administration. Not only was the agreement broad, covering two-fifths of the world economy, it was also comprised of 30 chapters that covered areas from tariff reductions to labour standards and intellectual property rights. The concluded TPP Agreement was signed in New Zealand in February 2016 by all 12 countries.