Having read the horrors in the Auditor-General's Report and Minister Idris Jala's speech on finance and bankruptcy, I feel a huge gap in my grasp of financial matters. It is my impression that keeping and managing money is by no means matter. It is elusive, slippery and can simply evaporate or disappear into thin air. It is very vulnerable to plundering and blundering. It is very amenable to sleight -of- hand, falling readily into the pocket, easily concealed up the sleeve, or made a subject of illusion.
Just to help my own understanding of the mystical subject of finance, I decided to make some notes of my own, sharing them with those equally perplexed.
Firstly, there is the concept of 'operating cost'. This should normally refer to the regular or recurring cost of keeping things running, such as salaries and other overheads. Normally 'operating cost' should exclude subsidies, unless subsidies is part of your operational calculation, like for instance for winning votes, in the case of which subsidies is certainly part of 'operational cost'. In any case I think we need to distinguish 'operating cost' from 'operation cost'. 'Operation cost' is the huge burden of correcting, restoring, salvaging, bailing after the plundering and blunderings that we read of. If you like, 'operation cost' is analogous to the cost of restoring our health, say for instance after we go for a heart bypass. Putting it simply , 'operation cost' is the expenses of cleaning up the mess left by someone, which nevertheless continue to drain even more public funds. To recapitulate: We need to distinguish 'operational cost' from ' operation cost' .
I always note that 'subsidy' seems to be a dirty word for many leaders and some diehard of bourgeoisie thinking, normally of those in the private sector. It is taken to signify ' reliance', 'dependence', 'fatalism' of the lower classes, commonly designated as ' subsidy mentality' or 'crutch mentality' by the more affluent. The truth is all classes are usually the beneficiaries of 'subsidy' in one form or another as reflected in the economic or financial policies. Only the form and terminology differs. For the affluent', we don' t call it 'subsidy' but 'perks', 'tax reliefs', 'infrastructural developmental cost' , 'incentives', various form be of licenses like 'AP's', and many more.
Actually 'subsidy' can be either constructive or parasitic. Subsidies in the right places could be a vital developmental tool, like the encouragement of education or development of skills. Subsidy can be a vital mechanic of social and economic equality, and a dispenser of social justice. But there is the other kind of subsidy, which is parasitic in nature, which lives off public fund without accruing much benefits for national development. This can take many forms, wether we call it 'subsidy' or by any other term. Nevertheless subsidy of this kind acts as a drain of public fund. This phenomenon is best categorised as 'subsides', as it merely eats into public fund, depleting it.. To recapitulate: we need to distinguish clearly between ' subsidies' and 'subsides'.
I always have problems with this term ' investment', as in the case someone saying 'investment' must be prioritised over all else. As I understand, 'investment' is putting money to good use, accruing many other benefits, financially or otherwise. 'Investment' is foregoing present use of capital for long term profits or benefits. Within our context, normally 'investment' refers to huge projects costing billions, or big businesses and the like. But for some strange reasons, our 'investments' seems to mean many other things, essentially plundering and disguised blunderings. Public funds seems to have vanished with no benefits accruing, for example a highway project costing billions which is unfit for public use. To make sense of this, even if it is only for myself, I would called such spending ' investiture', because it merely allows some to wax riches, often instantaneously without accountability. To recapitulate: we need to distinguish clearly between 'investment' and 'investiture'.
And then we have this dumbfounding subject of 'loan'. Now 'loan' to my understanding means the money the government needs to 'borrow' to run the country and finance its development. In this respect I do see the need to 'borrow' or take a 'loan'. If well managed, it can certainly be an important factor for our national well being. However, now I read our 'loan' has significantly escalated, jumping by 12.3 percent from the previous year to RM407 billion. With the horrors of the Auditor-General's Report still fresh in mind, I realise something must be wrong with my earlier understanding of 'loan'. 'Loan' seems to be something dangerous, threatening of bankruptcy. For greater clarity , I would call this ever escalating and threatening factor not 'loan' but 'moan'. We should be worrying now that our 'moan' has greatly skyrocketed. As a corollary, we should not speak now of 'borrow' but 'sorrow', allowing for the verb form as in ' googling' or ' fingering'. In short our leaders and bureaucrats should stop 'sorrowing' more and more 'moan', bringing us to the brink of bankruptcy!To recapitulate: we need to distinguish between 'loan' and 'moan', between 'borrow' and 'sorrow'.
I hope to share my personal notes with those equally lost in comprehending recent issues and development in public finance, who are nevertheless anxious over the prospect of our nation falling prey to bankruptcy. Admittedly the notes are too rudimentary or crude for government leaders and top civil servants holding the rein of public finance or the national economy in their hand, vowing 'never to let this (bankruptcy) to happen' -Minister', to cite Minister Idris Jala.