OCT 16 — The latest Budget can be surmised as follows: peanuts for the poor; nothing for the middle class; life as usual for the well-connected.

The mainstream media, playing rah-rah to the government as they write from their la-la land, rushed to paint the budget as the next best thing since sliced bread — “people-friendly”, “full of goodies”, “caring”. Our Prime Minister exhorts the Budget as “transformational”.

It is hard to see which part of the budget is transformational. First, how did we come to an alarming situation where 55 per cent of Malaysian households earn less than RM3000 per month? Not a single budget analyst question how the government intends to raise the income levels of these 3 million households, apart from praising the government on its plan to give out a one-time off RM500 to each family. How “transformational” is a RM500 handout going to lift these households out of their current income trap?

Aside from all the other one-time off cash gifts to students; civil servants; pensioners; the budget is most glaring in its almost non-existent plan to improve the livelihoods of Malaysia’s middle class. Indeed, the middle class in Malaysia is a dying breed — despite the government’s loud declaration to move the nation into a high-income one, we would be lucky just to keep pace with status quo.

The Middle Class in Malaysia certainly gets a raw deal — let’s begin with their biggest purchase — homes. They can’t get housing subsidies for cheap homes, and increasingly their abilities to purchase decent homes in decent locations are being eroded. They end up slaving their entire lives for the banks.

This is an surely an anomaly — we see  housing developers racing to build more and more luxurious condominiums and houses; KLCC area is being swamped with  plush but empty apartment units worth millions of ringgit; yet a typical middle class wage earner struggles to purchase his or her first new home. We see good government-owned land being snapped up by well-connected developers, who did not have to go through a tender process to ascertain the real value of the estate. We read with bewilderment that a government unit wants to build the highest office tower yet in KL, when there is an excess of office space in the capital.

Why has the government neglected to put out a good and equitable housing policy for the middle class and continues to squander the opportunity to provide good locations for housing, or at least extract the maximum value for its state-owned land so the excess can be distributed back to the people? Why are housing developers continue to reap huge profits, and at the same time lamenting they can’t build cheaper homes, claiming escalating costs?

And how about our next biggest expense, cars? Why is the government bent on shielding an overgrown, unsustainable local car industry that can’t wean off the decades-long protection? Let’s not even dwell on the AP system, which benefits the privileged few at the expense of millions of ordinary Malaysians. Isn’t it time for we ordinary folks get to drive better quality cars that are actually, cheaper?!

Even with our more expensive cars, we pay high tolls on our congested highways, because the concessionaires got a lopsided deal that guarantees a virtually risk-free handsome internal rates of returns. Our power bills could be lower if the government has the courage to rescind the lucrative power-purchasing agreements enjoyed by the IPPs. Even our staple food, rice — prices are controlled by a monopolistic private company. We give away our precious bandwidth for virtually nothing to the local Telco’s, yet we have to endure much slower speeds at higher prices, while these Telco’s accumulate huge profits.

We see examples after examples of how the middle class is squeezed, rather bizarrely, in the middle. The poor can benefit from government’s welfare programme. The well-connected companies, tycoons and politically-connected CEO’s continue to extract economic rent from concessions, exclusive licenses, sweet deals, government protection.

There is going to be even bigger challenges ahead for Malaysia’s Middle Class. Our competitive advantage, namely a high quality education armed with good English speaking-skills; are being jeopardised after education became a political tool for politicians to toy with at their whims and fancies, instead of being left to academics and professionals. Costs of living is likely to continue to go up, while Malaysia experiences slower growth and a higher budget deficit in the coming years.

Yes, we may have to tighten our belts further, while the fat cats, I mean, captains of industries praises the government for its “visionary budget”. The Malaysian Middle Class will just have to suffer a little longer, I guess.

* The New Poor reads The Malaysian Insider.

* This is the personal opinion of the writer or publication. The Malaysian Insider does not endorse the view unless specified.