by Steven Sim and Joshua Woo

The National Budget is a Moral Document

The government’s national budget is always a sort of self-revelation: the unveiling of the government’s vision for the people and a diagnosis of the current socio-economic state of the country. It is not merely an economic blueprint or worse, a political showcase. On a more succinct level, the national budget deals with the livelihood of the people, the men and women on the street. Therefore, it cannot be a neutral or amoral document.

How the federal funds are spent (on whom, in what, and with whom) hinges only on one aspect of the budget while the rest has to do with the acquirement of these funds (from who and from where). These purviews are necessarily grounded on the underlying moral decision already assumed in the budget. Therefore the Malaysia 2010 Budget has much more to tell us about the moral vision the current government has for the society than just their proposed spending and earning in the next few years.

The quintessential element of a national budget is the equitable distribution of the national wealth. While the market economy allows for private profits, the Government has a moral duty to care for its poorest citizen and those marginalized in the market economy and isolated from its capital and gains. Prime Minister Najib Tun Razak seemed to agree with this as he opened his 2010 Budget speech with a quote from the Qur’an, Sural Zukhruf, verse 32:

Is it they who would portion out the Mercy of your Lord? Is it We Who portion out between them their livelihood in this world, and We raised some of them above others in ranks, so that some may employ others in their work. But the mercy (Paradise) of your Lord (O Muhammad) is better than the (wealth of this world) which they amass

The Bible agrees with this idea of stewardship, that God is the provider of blessings, earthly and spiritual, and that He holds men and women responsible for dispensing his blessings to others:

I hold the shepherds accountable for my flock – Ezekiel 34:10

The just distribution of national wealth is especially vital now when our economy is just recovering from the impact of the global financial crisis. The International Monetary Fund has projected that the global economic growth will average about 3.1% in 2010. In Singapore, economists have predicted a 3.5% growth for next year, while in his 2010 Budget speech, our Prime Minister Najib Tun Razak has predicted a growth of 2-3%.

But the preliminary question is; what makes the budget a moral document? Taking a cue from a letter signed by leaders of various American religious communities to the American Congress, a budget fundamentally answers the 6 questions below:

1. Does the budget provide those in need with the assistance necessary to build self-reliant, purposeful lives?

2. Does the budget provide adequately for all God’s children, including the poor and sick, the old and very young?

3. Does the budget strengthen the foundations of our country in order to make us safer and more secure?

4. Does the budget protect God’s creation, the environment?

5. Does the budget spread its burdens and rewards fairly, or are some groups given special unearned privilege, while others are excluded from [the Nation's] bounty and opportunity?

6. Does the budget promote justice and equality by providing for basic human needs in health care, education and other areas?

Najib’s 2010 Budget was titled: 1Malaysia: Together We Prosper (hereafter will be referred to as the “Budget”). Its objective is telling, in the title of the speech itself. The Budget focused on three strategies:

1. Driving the country towards a high-income economy

2. Ensuring holistic and sustainable development

3. Focusing on the well being of the Rakyat (people)

This paper aims to examine the Budget through the lens of Christian theology. However we would not be doing a point-by-point commentary on the Budget, but will instead focus on key areas and with that hope to explore the implication of the Budget from a theological perspective.

Income Tax Relief: The More You Have, The More You Get

Income tax is one way the Government receives revenues from salaried workers. The Government in turn will spend the money in form of social and economic development, including providing public amenities, health care, education as well as creating more economic opportunities for its citizens. This way, the salaried workers will be able to share a small portion of the fruits of their labors with those who for unfortunate reasons are not able to work and create wealth themselves.

For the persons on the street, the most lauded elements in the Budget is the increase of personal tax relief from RM8,000 to RM9,000 and the 1% income tax deduction on the highest tax bracket for individuals, from 27% to 26%. It was estimated that the tax reduction will put back RM400 million into the people’s pocket. This is definitely commendable especially in view of the slow economic recovery.

Nevertheless there is a problem. The average annual income of Malaysians is about RM25,000. This means they do not qualify for the 1% tax reduction while they will still be taxed at about 7%, which will be about RM355, counting the extra tax relief of RM1,000. This year, the same salary was taxed RM385, roughly.

What about for the high salaried group, the 5.5% of our population earning more than RM10,000 monthly? If a person earns 10 times more than the average Malaysian salary, about RM250,000, he was taxed about RM52,665 this year. Next year, he will be taxed RM50,985.

This means, the higher your salary is, the more money the Government will give you in tax relief.

Imagine those who are earning below RM10,000 (a factory operator in Penang brings home an average of RM10,000 annually). They are not taxed this year, and they are not taxed next year. Government goodies do not reach them.

The tax relief also does not benefit homemakers, who are generally women in our Malaysian context, and retirees who generally do not have any income.

Therefore the RM400 million are put only into the pockets of those who are not the neediest in our country. The neediest do not benefit from tax relief as the biggest cut goes to those who are already earning big money.

The society is a social representation of the Trinity, where individuals’ social identities and property acquirements are dependent on one another. Thus, each individual member must be treated with entitlement and charity. Low income-earners and those who are non-salaried should be entitled to benefits from the tax relief, in fact, more so for them than those already earning large salaries. Tax relief for high earners is incentive and reward for hard work, but tax relief for the poor is relief in the real sense.

Credit Card Fee: The Working Class Loses More

The fact is credit card has become a norm in the way we do daily transactions. In the end of the first quarter of this year, there were about 11 million principal credit cards issued. Yet, the supposed convenience has landed Malaysians in an RM22.13 billion debt as of last April. That’s almost 12% of the total Budget. Studies also show that only about 30% of credit card holders pay up their balance in full every month.

In order to curb overspending through credit cards, the Budget introduced a fee of RM50 on each principal credit card and RM25 on each supplementary card. The amount will be rather insignificant for individuals to decide whether or not to have a credit card or two. At most, it will deter them from having too many. But having lesser cards does not mean lesser credit spending. This will then defeat the Government’s purpose to curb credit spending as studies have shown that those buying with credit cards are likelier to spend 17% more than those paying cash. While the Government’s intention is valid and thus commendable, the blanket fee program as a solution is ineffective and futile.

There are other problems with the scheme. Firstly, the fee will be seen as punitive even to the 30% who paid up their monthly balance in full and the other majority who are managing their credits well.

Secondly, the credit card fee will put additional pressure on the average Malaysian families who do not have much cash flow and needed the credit facility while waiting for their monthly paycheck. Because credit cards are easy to be obtained – with sales people signing up customers at supermarkets, food court even walkways – most families who own credit cards will have at least 2 cards. That alone will cost the family about RM100 next year.

The collection of the principal credit card fees alone will put about RM550 million back to the Government’s coffer. Remember the Government had earlier given the people about RM400 million where the bulk will go to the highest paid strata of the working group? This in effect means, while the high salaried workers made much more profit from Government’s tax relief, everyone, including the majority of the average salaried workers will have to contribute back to the Government in forms of credit card fees.

From the discussion on individual income tax relief and the re-introduction of the credit card fee, it seemed that the average persons on the street do not have much to cheer for in this gloomy economic climate. The Government’s verbosity in the Budget and reform rhetoric are misleading. The fact is that there is no program to assist the majority of the hardworking lower-middle income Malaysians who will be struggling with cash flow in the nearest future. What might be worst is when such charges, which intended to be a market mechanism turns into a market norm, where an immature and naive population see this financial barrier as adding to the prestige of owning credit cards. This does not reflect economic justice and market moral. Our economic agenda fails when it ignores the suffering majority.

We require real solution to rampant credit spending and not one which adds unnecessary burden on the people. The Eucharist offers a critic to both the credit culture and the Government’s futile and distressing move. ‘Values’ do not borrow their characteristics from the indefinite future of humans. ‘Values’ are transformed in the historical death, resurrection and ascension of Jesus: a solid reality of the past that connects into the present.

Eucharist theology as remembering the past and connecting it into the present restores for us our perception of all values, including monetary value and its characteristic. Therefore, on one hand, we have to reckon to the fact that money’s value is rooted in the realism of the past and present, not in an imaginary characteristic that has often being oversimplified as ‘credit’. While on the other hand the Eucharist enable us to critique the Government’s capitalizing from this fictitious mechanism as reinforcing the unreal and causes unnecessary distress on the people.

Blanket Rule In Economy Is Unjust

In addition to the above, the Budget also includes a re-entry of the Real Property Gain Tax (RPGT) where gains from the disposal of property are subjected to 5% tax. The Government’s reason for the re-introduction of the RPGT scrapped in 2007 was to curb property speculation. Yet unlike the previous RPGT where the taxed percentage from 30%-0% depends on the number of years the property disposed were held, the new RPGT is irrespective of time. This means, a speculator, selling his property investment a year after purchase will be subjected to the same percentage of RPGT as a house owner selling off her house after 20 years of ownership to finance her son’s tertiary education, if that was her second property.

This is in effect another unreasonable blanket rule which will penalize both property speculator and genuine house owners looking to liquefy her fixed asset or to upgrade to a newer house.

The 2010 Budget in applying new financial and unnecessary regulations on almost everyone seems like fairness, that is, everyone have an equal share of the national burden. But the difference is this: the highly paid gave back the same amount as the poor and lower-middle income group, while receiving a bigger portion than them. The average hardworking household struggling with monthly cash flow issue will have to pay the same amount of tax on their wealth as the high riding speculators making tens of thousands.

Far from spreading national wealth, the Budget is putting in writing an immoral principle, it is in effect legislating that the poor and working class have to share the bills of the rich, that is, after the latter had eaten the largest portion of the pie.

A market economy means that the hardworking laborer gets to keep and enjoy the fruits of his toil, but alas,

A poor person’s field may produce abundant food, but injustice sweeps it away. (Proverbs 13:23)

No Goodies We Ask For

Real economic reform is still missing in the 2010 Budget. Government claimed that we should not turn our economy into a protectionist one through legislation, but yet, common sense and top Economists such as Prof. K.S. Jomo and Dr. Terence Gomez have indicated that Malaysia practices patronage economy. This not only impedes the free market process, but also continues to aggregate wealth in the hands of the few well-connected middle class patrons. Hard working lower income group, the poor and the new urban poor, especially young and struggling families will not only suffer the consequent of lack of economic opportunities reserved for political elites, but also suffer at the hand of an unregulated playing ground of the rich and powerful.

For decades, workers are denied minimum wages, job opportunities are reduced by the uncontrolled influxes of foreign labors, legal and illegal, women and senior citizens are not empowered to be self-sustaining and continue to be dependents of their families and at old age becoming burdens. The poor and the marginalized have been isolated and will continue to be isolated from the wealth of the nation by lack of political will which ignore real social reforms and opted for mega projects such as bridges and buildings, and even that, at highly overspent cost.

Although the Government ran a huge nationwide campaign to promote the concept of 1Malaysia, we are still seeing racial categorization in our economy. Malaysians are still divided into Bumiputera and non-Bumiputera, with the former accorded certain socio-economic and political privileges such as quotas and special subsidies. Such forced categorization dampens any effort of national integration. The ‘poor’ is an economic label, not a racial one. Therefore Government’s aid must reach out to the poor irrespective of their skin color, religion, gender and political ideology.

If a king deals with the poor without favoritism, his throne will be established forever. (Proverbs 29:14)

Good Governance, Moral Leadership Not Budgeted

The latest Auditor General’s report reveals that overpayment in Government’s contracts may amount up to RM28 billion. To put this in perspective, that is seven times the RM 400 million which the Government is purportedly giving back to the people in tax relief and deductions. The Budget’s allocation for economic and infrastructure development is only RM25 billion and for social development such as education, health care, housing and welfare is only RM20 billion.

Or to put it in another way, every Malaysian regardless of age, race and religion will be able to receive RM1,000 each if the Government decides to give a stimulus bonus next year with the money lost to overspending.

Wealth is worthless without proper management and good governance.

Mere talk leads only to poverty. (Proverbs 14:23)

Years after years, billions of Ringgit were allocated for projects and programs in the national budget. And years after years, Malaysians have read about corruptions and other abuses which led to the lost of huge amounts of people’s money. The implementation of this year’s reduced Budget, although still at an enormous sum of RM191 billion, will turn out to be “business as usual”, unless concrete actions are taken immediately.

Allocating money is one part, the least of the strategy; ensuring effective implementation is the measure of success. The Government’s seriousness in running the country and implementing the Budget well must be reflected in the Budget itself. If it is weighty enough, it warrants a place in the moral document of the nation. Mechanisms, including legislation and independent monitoring bodies, must be set up to ensure that public fund is not abused, as has been frequently reported in the press.

Take for example the case of the Royal Malaysian Police (PDRM – Malay: Polis Di-Raja Malaysia). Out of the total RM3.7 billion for national security development, the PDRM was given slightly more than RM1 billion in the Budget with the focus of meeting one of the National Key Result Areas (NKRAs) announced by the Prime Minister; to reduce street crime rate by 20% in 2010.

Yet, the Budget continues to ignore the dismal performance of the PDRM, including the abuse of power, rampant corruption and the worrying cases of deaths in custody. The Home Ministry reported that between 2003 and 2007, there were 1531 cases of deaths in custody.

Quis custodiet ipsos custodes? – Who will guard the guards? Who polices the police? The Government has thus far ignored the reports and recommendations of the Police Royal Commission 2005 to establish an Independent Police Complains and Misconduct Commission (IPCMC) to monitor the police and restore public confidence on the law enforcing agency.

The Government has also completely ignored the resolutions of the Parliamentary Roundtable on A New IGP for a Safe Malaysia convened by the Opposition Members of Parliament in July this year.

RM3.7 billion is allocated to improving national security but without any independent and effective monitoring, even given our country’s experience of abuse of public money. It has to be noted that RM3.7 billion is only a development budget, the management of national security has been allocated another sum, unreported in the Budget, but believed to be more than RM15 billion (estimation based on 2009 RM18 billion budget).

The same can be said of the Malaysia Anti Corruption Commission (MACC) which has a badly tainted public image, not least due to our annual drop on the Transparency International’s Index of Corruption for the past decade and the recent case of Teoh Beng Hock who was found dead in MACC Headquarter after he was brought in for investigation. The Government realized that the MACC has failed to gain the public’s trust and so set out to enhance its image. However pumping in money to paint the damaged image of MACC does not in any way make the organization more trustworthy, efficient and effective. After all, a beautiful mural does not turn a prison into a palace.

Another agenda of good governance not reflected into the Budget is the open tender process for government contracts. As mentioned above, overpayments cost us to lose RM28 billion. Yet, without a transparent process of awarding tender for public works, we not only lose money but also risk having substandard quality of work. The latest tragedy where 22 school children attending the 1Malaysia Camp organized by the Education Ministry fell into the rapid Sungai Kampar after the bridge they were using collapsed. 3 children lost their lives in the incident. The bridge was completed only two weeks before.

Finally, we return to a full circle to the Budget being a moral document. The Budget being an important moral document must reflect moral leaderships. This includes documenting our vision and program to be a respectable civilization.

Without moral vision and moral leadership, a civilization will fail to progress. Malaysia is facing serious social crisis. Corruption is taken for granted from top-down. Our judiciary has been made a mockery with inconsistent and unjust sentencing and recently was further marred by the controversial Lingam’s tape. Our democracy is in a mess with the coup in Perak as well as the luring of representatives to change party by various means. The old issues of restricted press freedom, outdated and unjust laws such as the Internal Security Act have not been resolved and we are facing new social and moral problems such as human trafficking, abuse of foreign domestic helpers which sometimes led to death as in the recent case of 36-years old Indonesian maid Mautik Hani and even the atrocious rape of the Penan women in Sarawak, some who are under-aged girls.

In reforming the moral climate of the country, the fundamental change must necessarily include a reform in our democracy. The Government must show its sincerity to open up more democratic space in order for a healthy competition of ideas and political ideologies to take place. For the first time in half a century, Malaysia now has an opportunity to develop a Schumpeterian democracy where a stronger alternative political voice is heard. Free press and freedom of independent expression must be legally guaranteed. The Opposition party must be given the space to compete with the Ruling party for the votes of the people in a free and fair election. A healthy democracy where political parties compete for the people’s vote will safeguard the people’s interest against unchecked and unchallenged power. Recent research from Oxford University also confirmed the intuitive assumption that allowing fair competition between political parties increases the country’s economic performance.

Postscript: Striving for A Social Theology

The German theologian Jurgen Moltmann wrote, “The symbol of the cross in the church points to the God who was crucified not between two candles on an altar, but between two thieves in the place of the skull, where the outcasts belong, outside the gates of the city.” To be more explicit in the gospel’s context, Jesus was crucified between two political rebels due to political reasons. We domesticate our theology when we restrict the Church to “religious stuff”. Our Scripture is replete with a one-sided bias for the marginalized, the oppressed and the poor. The gospel if to be good news at all must be good news to them.

Jesus said, “The Spirit of the Lord is on me because he has anointed me to preach good news to the poor.” (Luke 4:18)

Therefore, theology cannot be unconcerned with the “things of this world.” To quote another German theologian Johann Baptist Metz, “The prices of world trade are not a matter of indifference for the kingdom of God,” because,

The righteous care about justice for the poor, but the wicked have no such concern. (Proverbs 29:7)

Undoubtedly there are many congregations and individual Christians who have been living out this gospel to the poor. Nonetheless, the civil battle between fundamentalism and liberal gospel had paralyzed the Church of our time to break out of her dogmatism and devotionist religion to reach out fully to embrace the world. Our reaching out has been restricted to “reaching out to bring ‘em in”, our evangelism, proclaiming of the good news has been restricted to holy club recruitment drives.

Yet, the Bible tells us that the sin-stricken and groaning Creation awaits the liberating act of the sons of God, the collective Church (Romans 8:18). But we soon realized that our best response is to participate in the pains of the suffering masses (v 23). It is easy for us to give hope and healing from distance, but such hope cannot be very hopeful to a suffering world. That’s James for you, mere words of blessings and prayers are not enough.

Like the God of Isaiah who rolled up his sleeves and got into the mud himself (Isaiah 52:10), Christians are called to get involve, to be involve especially in the experience of suffering, to suffer together. That is the meaning of “compassion”, the original Latin means, “to suffer together”.

And the question naturally arises, where is God in all this?

God is “ever co-suffering” with the suffering world, through the Christians who are co-sufferers with the world (Romans 8:26). That is the beauty of it all, God who is ever-involved dispenses his healing, that is, the true hope of emancipation through his Church when she suffers in hope together with the suffering world; in other words, when the Church has compassion for the suffering world.

Since the 8th of March, the Church found itself in a dilemma. On one hand, Christians like the rest of the country, intuitively knew that they had a part to play, whether as Christians or as citizens, to correct the wrongs in our country. Yet on the other hand, the Church cannot find in her book the theology to response to such situation. Quite a number took to the initial hype of social action and pastors and Christians alike were talking about “cultural mandates” and the social dimension of the gospel. Few took another step forward, even cautiously, to participate in socio-political conversations cropping up in every segment of the society. But many ended up leaving it to their congregation to “do it in your personal capacity outside the church”.

It is time for the Malaysian Church to realize that there is but one dimension to the gospel, the social dimension. The gospel cannot be a formula for a cluster of religious people. It is the good news of hope for the whole world. With many Christians taking up the challenge of participation rather than isolation, especially in the arena of politics, it is crucial for the Church to be able to bless their endeavors not merely with words and prayers, but also by theological praxis (actions/practices). And like the gospel, there is only one dimension to theology, the social theology; because everyone,

The rich and the poor have a common bond: God is the maker of them all. (Proverbs 22:2)

Steven Sim was formerly Special Assistant to Penang State Exco for Youth and Sports and Women, Family & Community Development. He is currently taking time off to pursue his post-graduate degree. Joshua Woo is currently pursuing his studies at Trinity Theological College, Singapore.

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