• Malaysians are voting with their feet by moving to Selangor and Penang

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 30th of May, 2017

    Malaysians are voting with their feet by moving to Selangor and Penang

    In the Migration Report 2016, which was released on the 26th of May, 2017, it was reported that the two states with the highest net migration was Selangor followed by Penang. In the period of 2015-2016, Selangor experienced a net migration of 19,400 persons while Penang experienced a net migration of 12,000 persons (See Chart 4 below).
    Source: Migration Report 2016

    The willingness of people to move to Selangor and Penang is not a short-term phenomenon. According to the data from the 2011 to the 2016 Migration Reports, the net migration for Selangor and Penang were 125,400 and 49,800 respectively making Selangor and Penang the top two states in terms of net migration (See Chart below)

    Source: Migration Reports 2011 to 2016

    The figures from the Migration Reports clearly shows that Malaysians are voting with their feet by moving in large numbers to Selangor and Penang. This is a clear indication that Malaysians have confidence in the state governments of Selangor and Penang under Pakatan Harapan (PH).

    The achievement of Penang is even more remarkable when one considers that it is only the 8th most populous state in Malaysia and yet, it is able to attract the 2nd highest number of net migrants in the entire Malaysia. According to the 2016 Migration Report, “for the period of 2015-2016, Pulau Pinang registered the highest positive effectiveness ratio of migration at 58.4 per cent. This means that the people of Pulau Pinang will be increased by 58 persons for every 100 of inter-state migrants that migrate in and out of the state”.

    On the other hand, the two states with the largest outflow of population are Wilayah Persekutuan Kuala Lumpur and Perak with a net outflow of 163,400 and 40,000 respectively from 2009 to 2016. The reasons for these migration patterns were not given in the Migration Report. But it is likely that the state of Perak is losing population because of better job prospects in places like Selangor and Penang. For Kuala Lumpur, it is likely that it is losing population because of high housing prices and possibly, the more attractive policies offered by the Selangor state government.

    According to the 2016 Migration Report, 61% of out-migrants from Kuala Lumpur moved to Selangor in the period from 2015-2016 while 62% of out-migrants from KL moved to Selangor in the period from 2014-2015 (See Chart 6 below).

    If these trends continue, Kuala Lumpur will soon be a city comprising of mostly rich Malaysians and expatriates and also poor migrant workers.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

  • Pakatan Harapan will terminate PEMANDU and conduct a forensic audit of all of its activities

    Media Statement by Pakatan Harapan Manifesto and Policy Committee issued on the 5th of May, 2017

    Pakatan Harapan will terminate PEMANDU and conduct a forensic audit of all of its activities

    The Performance and Management Delivery Unit (PEMANDU) in the Prime Minister’s Department was launched by the Prime Minister with much hype in 2010. Since its creation, PEMANDU has commandeered much power and resources, spent a lot of money on publicity seeking events and took the lead in ‘spin doctoring’ many of the supposed achievements by the BN government. In reality, it has failed to deliver on its main KPI, failed to be accountable to parliament and the public and most recently, ensnared itself in possible conflict of interest situations. Upon winning GE14, Pakatan Harapan will abolish all government contracts with the newly formed PEMANDU Associates Sdn Bhd and initiate an extensive forensic audit into all of the activities of PEMANDU Corporation including disclosing the salaries of the directors of PEMANDU and all the salient financial terms payable to this private company. Instead of engaging expensive external consultants to direct the civil service, Pakatan Harapan will channel resources directly to the civil service to empower them to do their jobs professionally and to introduce reforms that will make the civil service more independent, transparent and effective.

    (i) Failure to meet its GNI per capita target for a high-income nation

    The key target outlined in the Economic Transformation Program (ETP) 2010 Roadmap Report was for Malaysia to reach a high income nation status of US$15,000 GNI per capita by 2020 (See Exhibit 1 below).

    Source: ETP Roadmap 2010, pg.9

    This target has been referred to in each of the ETP Annual Reports from 2011 to 2014 and also in the 2015 National Transformation Program Annual Report. But what is clear is that we are still very far from the US$15,000 GNI per capita target as show in Chart 1 below. In fact, Malaysia’s GNI per capita has increased by a mere US$490, from US$8636 in 2010 to US$9057 per capita in 2016, or a 4.9% in 6 years. (See Chart 1 below) Based on this statistic alone, PEMANDU has failed.

    Chart 1: GNI per capita current prices (US$) 2010 to 2016

    Source: GNI statistics are from the Department of Statistics, Exchange rate data is the World Bank data showing the average US$ to RM exchange rate for that year (Figures differ slightly from the World Bank GNI data calculated using the Atlas method)

    The issue has been previously highlighted by IDEAS Head of Research Ali Salman and raises questions as to whether Malaysia can reach the high-income nation target by 2020.[1]

    (ii)                Failure of Accountability

    In a piece in The Malaysian Insight, a PEMANDU executive stated the following: PEMANDU also reported to the EPU, the Prime Minister’s Department and was accountable to Parliament.[2] We are unsure as to what the executive’s understanding of parliamentary accountability is, but in his 6 years as a member of the cabinet, the CEO of PEMANDU, Idris Jala, never once appeared in parliament to answer any single parliamentary question that concerned PEMANDU. In fact, he never answered anything or said anything in parliament. Given that he was heading two programs – the ETP and the Government Transformation Program (GTP) – that is supposed to bring about transformational changes in the country, it is disgraceful that he found it unnecessary to answer any questions in the most important elected institution in the country. This is a massive failure from an accountability standpoint.

    In addition, even though PEMANDU published annual reports for the ETP and GTP and starting from 2015, the National Transformation Program (NTP), it di not table any of its reports in parliament nor distribute them to Members of Parliament. It does not table its own financial accounts in parliament nor tell parliament how much PEMANDU has spent for its various activities. And despite many public criticisms, it has not made known how much its staff gets paid, which according to some reports, is higher than the Prime Minister’s salary.[3]

    Furthermore, PEMANDU has the audacity to ask for RM10 million and RM15 million from the government to organize the Global Transformation Forum 2015 and 2017 respectively at the same time as it is preaching values of fiscal prudence on the part of the federal government.[4]

    While it uses the language of good corporate governance and transparency, PEMANDU does not apply any of these standards to itself.

    (iii)              Conflicts of Interest

    All of the staff of PEMANDU Corp, a 100% Ministry of Finance owned entity, has now been transferred to PEMANDU Associates Sdn Bhd, a private entity that is 50% owned by Idris Jala. Starting from 2017, PEMANDU Associates will sell its services to the government by placing its staff in key ministries to continue the NTP. At the same time, this new private entity will be free to sell its services to other government ministries, at home and abroad. Furthermore, since the beginning of 2017, Idris Jala has been occupying the position of the Chairman of Heineken Malaysia, a public listed company.

    The position of Idris Jala as the chairman of a publicly listed company and the president of a private company which is deeply embedded into the inner workings of the federal government via its work in the NTP, raises serious questions with regards to possible conflicts of interest.[5] Until today, he has not even attempted to explain these conflicts of interest.

    For these reasons and immediately upon winning GE14, Pakatan Harapan will terminate all existing contracts with PEMANDU Associates Sdn Bhd. We will initiate a forensic accounting investigation into all of the expenditure undertaken by PEMANDU Corp and BFR Institute, both of which are 100% MOF owned entities, including how much was paid to each and every celebrity speaker for the 2015 and 2017 Global Transformation Program. We will publicly disclose the salaries received by PEMANDU directors.

    Finally, rather than spending obscenely on external consultants, Pakatan Harapan will channel resources directly to the civil service to empower them to carry out its functions more independently and and professionally. Pakatan Harapan will also call upon respected retired civil servants to help us reform the civil service to its former glory days of integrity, transparency and effectiveness.

    Dr. Ong Kian Ming (DAP)

    Wong Chen (PKR)

    Dr Dzulkefly Ahmad (AMANAH)

    Dr Rais Hussin (PPBM)

    [1] http://www.ideas.org.my/news/press-statements/government-intervention-causing-malaysia-to-lose-competitive-edge-as-average-income-of-malaysians-drops-by-15-according-%E2%80%8B%E2%80%8B-to-latest-epu-figures/

    [2] https://www.themalaysianinsight.com/s/2430/

    [3] http://www.malaysiakini.com/news/149861

    [4] http://www.malaysiakini.com/news/377108

    [5] http://www.beritadaily.com/idris-position-in-pemandu-and-heineken-questionable-says-dap-man/

  • 10 questions on the Employment Insurance Scheme (EIS)

    Statement by Pakatan Harapan on the Employment Insurance Scheme (EIS) on the 28th of April, 2017

    10 questions on the Employment Insurance Scheme (EIS)

    As we approach Labour Day on the 1st of May, we acknowledge the contributions which the workers in Malaysia have made to the country. The proposed Employment Insurance Scheme (EIS) by the Prime Minister, which is expected to be tabled in parliament in the July / August 2017 sitting, has the potential to help Malaysian workers through a transition process when they have lost their jobs. But given that the details of this scheme have not been disclosed and there is no parliamentary committee set up on look at the issue of jobs, employment and the economy, there remains many questions to be asked about the EIS.

    Here, we pose the following 10 questions to be answered so that there can be greater confidence that the EIS will be an effective program to help the workers in our country.

    1)                  Retrenchment compensation is currently spelled out in the Employment Act 1955 and the Employment Termination and Lay-Off Benefits (ETLB) Regulations 1980. Will the retrenchment compensation continue to be paid out by the employer after the introduction of the EIS? Will workers be worse off in the long run if retrenchment benefits are cut / abolished as part of a package deal for introducing the EIS?

    2)                  The estimated amount collected will be between RM700m to RM800m a year (based on 0.25% Employers and Employees contribution, 6.5m workers, RM2000 salary). How much will the administrative costs be? Will it be as high as 25% of the amount collected as some reports have indicated?

    3)                  Since the EIS is an insurance scheme like SOCSO, does this mean that employees won’t be able to get back these funds if they don’t get retrenched in their lifetime? How much disposable income will the EIS scheme take away from the regular worker over their lifetimes?

    4)                  How with the EIS funds be managed? Will it be managed in the same manner as the SOCSO funds which has delivered returns that, on average, are lower than EPF’s returns?

    5)                  One of the purpose of the EIS is to help retrain and reskill workers who have lost their jobs. How will these retraining and reskilling programs be different from existing programs which are being implemented by the government such as Skim Latihan 1 Malaysia (SKIM) and others? The government must provide a convincing case that the provision of retraining schemes under EIS will be more effective than current programs.

    6)                  There are already existing training schemes provided and paid for by the sums collected from employers and managed by the Human Resources Development Fund (HRDF). There have been numerous reports that more than RM100m of this fund has not been used by employers for retraining purposes. Can existing HRDF scheme be utilised better for retraining purposes? What is to say that the proposed EIS scheme will not end up like the HRDF scheme i.e. lots of unused funds that are not put into retraining schemes?

    7)                  Initial reports indicate that only those workers who are currently being covered by SOSCO i.e. those earning less than RM4000 a month will be eligible for the EIS scheme. But many middle-income workers are also being retrenched these days including those in the financial industry and the oil and gas industry. What kinds of plans and programs does the government have to help these workers who are in the M40 category?

    8)                  Estimates by Malaysian trade unions show that workers lose between RM50 million to RM100 million a year from lost compensation as a result of companies going bankrupt but RM700 million to RM800 million will be collected from the EIS scheme, half of which are coming from workers. Is this an effective approach to solving the non-compensation issue?

    9)                  One of the main reasons why workers at the lower end of the economic spectrum are losing their jobs is because of employer preference for foreign workers. If the government does not have a comprehensive plan to reduce our reliance on foreign workers, how effective will the EIS scheme be? How easy will it be for the workers who have lost their jobs to find new jobs, especially when they have to compete with lower paid foreign workers?

    10)               Some countries in Asia which have employment insurance schemes also feature government contributions to these schemes (Thailand – 0.25%, Taiwan – 0.1%, Vietnam – 1%). Has the government considered having its own contribution to this scheme to decrease the financial burden on employers and employees alike?

    Dr. Ong Kian Ming, DAP
    Sim Tze Sin, PKR
    Dr Dzulkifli Ahmad, AMANAH
    Dr Rais Hussin, BERSATU

  • How much did Pemandu Associates Sdn Bhd earn from organizing the Global Transformation Forum 2017?

    Media Statement by Dr. Ong Kian Ming, Member of Parliament for Serdang, on the 27th of March, 2017

    How much did Pemandu Associates Sdn Bhd earn from organizing the Global Transformation Forum 2017?

    Tony Robbins is a household name among those who follow management trends and self-help coaches. He has been a life coach to movie stars such as Hugh Jackman and world class athletes including Andre Agassi. For US$650, you can get nosebleed seats to a 3 day “Unleash the Power Within” Tony Robbins seminar in New York later this year. For US$2995, you can have a seat on the floor and access to the Premier Lounge.[1]

    If Tony Robbins were to come to Malaysia, the private company which has to pay his appearance fee would have to charge very high ticket fees in order to cover their costs and to make a decent profit. It would be hard to imagine this private company getting any funding from the Malaysian government to organize such an event. Perhaps some private corporations may be inclined to sponsor such an event so that some of their management can have special access to the man himself. But the risks and the rewards of organizing such an event would be in private hands, with little or no government involvement.

    Malaysia now has its equivalent of a Tony Robbins ‘make yourself feel good session’ in the form of the Global Transformation Forum (GTF). The first forum was held in 2015 and the headliners to this forum included Arnold ‘the Terminator’ Schwarzenegger and former Olympians Carl Lewis and Sebastian Coe. Fast forward to 2017 and this year’s headliners include businessman and philanthropist Richard Branson and 8-time Olympic champion Usain Bolt.[2]

    For GTF 2015, ticket prices started at RM427 for a university student and went up to a maximum of RM1424 for a regular delegate (Figure 1). For GTF 2017, ticket prices were jacked up to a starting price of RM4,000 and went up to a maximum of RM10,000 (Figure 2).

    If this were a purely private event organized by a private company, this Member of Parliament would have no beef with the ticket prices nor with the hosting of the event itself. But this is not a purely private event. Nor was it funded purely by ticket sales to individuals and the private sector.

    Figure 1: Ticket prices for the Global Transformation Forum 2015

    Figure 2: Ticket prices for the Global Transformation Forum 2017

    The first issue I have with this event is that it involves taxpayers’ funds. The first GTF in 2015 was organized with a government subsidy of RM10 million (Figure 3). Despite the higher ticket prices in 2017, the government subsidy was increased to RM15 million (Figure 4).

    Figure 3: Parliamentary Reply on the cost to the taxpayer for organizing GTF 2015

    Figure 4: Parliamentary Reply on the cost to the taxpayer for organizing GTF 2017

    Since this event is mostly accessible to those who are affluent, because of the high ticket prices, it does not make sense for the government to pour in millions of Ringgit to subsidize this event organized by the rich, for the rich and of the rich. It makes even less sense that the government subsidy increased by 50% from RM10 million in 2015 to RM15 million in 2017 when ticket prices in 2017 have been raised significant and there are no discounts for students and the less affluent.

    The second issue I have with this event is that the revenue for GTF 2017 goes directly to a private company. GTF 2015 was organized by BFR Institute, a company which is 100% owned by PEMANDU Corp, which is a company limited by guarantee under the control of the Ministry of Finance Incorporated.[3] GTF 2017 is organized by PEMANDU Associates Sdn Bhd which is a private company that is co-owned by its CEO and President Dato Seri Idris Jala (Figure 5).

    Figure 5: Ownership of PEMANDU Associates Sdn Bhd (downloaded from the Companies Commission of Malaysia / Suruhanjaya Syarikat Malaysia website on the 26th of March, 2017)

    Since the GTF is no longer organized by BFR Institute, which is a government owned and government controlled company, but by a private company, namely PEMANDU Associates Sdn Bhd, how much of the sponsorship of this event, including the RM15 million set aside by the Government of Malaysia, which is going into the pockets of this private company that is co-owned by Idris Jala?

    The third issue I have with the GTF is that a private company, PEMANDU Associates, is using this publicly subsidized event to increase its own public profile, perhaps in the hope of selling its consultancy services to the government, Government Linked Companies (GLCs) and other companies.

    PEMANDU Associates was set up on the 16th of December 2016 as part of the transition for PEMANDU Corp to hand over its responsibilities back to the civil service. According to PEMANDU’s website, “all staff in PEMANDU and BFR Institute will move to PEMANDU Associates Sdn Bhd, a private consultancy firm newly established by PEMANDU management and staff”. In addition, “under our agreement with the Government on 5th January 2017, PEMANDU Associates will be deploying 45 people to the National Transformation Program (NTP) work under the supervision of the Civil Service Delivery Unit in 2017. This number will reduce to 30 in 2018. The current employees not deployed to the NTP work will be doing business development work, as well as to provide consultancy services to public sectors abroad and business turnaround”.[4]

    In other words, PEMANDU Associates will be paid by the Government of Malaysia in 2017 and 2018 for its consultancy services. This means that PEMANDU Associates will have access to the inner workings of various government ministries and agencies. As far as I know, Idris Jala, who was appointed as the Chairman of Heineken Malaysia as of the 1st of January, 2017[5], has not officially resigned from his position as CEO of PEMANDU Corporation or as chairman of the BFR Institute. What assurance is there that PEMANDU Associates will not abuse its position and knowledge of the civil service in order to sell its consultancy services to other government departments or private companies who want to have access to the civil service? The fact that Idris Jala has not clarified his position and role as the CEO and President of PEMANDU Associates Sdn Bhd, the CEO of PEMANDU Corporation, the Chairman of BFR Institute and the Chairman of Heineken Malaysia does not give any public assurance that conflicts of interest arising from the holding of these various positions will not arise.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] https://www.tonyrobbins.com/events/unleash-the-power-within/new-york-area-07-20-2017/#pricing

    [2] One of Usain Bolt’s relay gold medals was recently taken away because of a positive drug test for one of the relay runners (not Bolt).

    [3] https://www.pemandu.gov.my/media-room-idris-jala-holds-no-shares-bfr/

    [4] https://www.pemandu.gov.my/pemandu-begins-transition/

    [5] http://www.thestar.com.my/business/business-news/2016/12/01/idris-jala-to-become-heineken-malaysia-chairman/

  • Why is the government of Malaysia spending RM15 million to subsidize an event for affluent Malaysians and big corporate organizations organized by a private company?

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 23rd of March, 2017

    Why is the government of Malaysia spending RM15 million to subsidize an event for affluent Malaysians and big corporate organizations organized by a private company?

    The Global Transformation Forum 2017, featuring internationally renowned speakers and celebrities such as Sir Richard Branson, Jack Ma and Usain Bolt, is currently taking place at the KL Convention Center from the 22nd to the 23rd of March, 2017.[1] It has a number of corporate sponsors including Tenaga, Hong Leong Bank, YTL, MMC Gamuda, KL Kepong and many others. The cost of entrance for this forum starts at RM4,000 for a basic package (“Club Pass”) and going up to RM10,000 for the most expensive package (“Signature Pass”). As of today, tickets for the Circle Pass (RM6,000) and the Signature Pass (RM10,000) has been sold out and only a limited number of Club Passes (“RM4,000) are left (See Figure 1 below).

    Figure 1: Cost and Benefits of the Club Pass, Circle Pass and Signature Pass packages for the Global Transformation Forum 2017

    If this was a purely private affair, organized by the private sector for the private sector, it would be no business of mine as a Member of Parliament (MP) to question the costs of organizing such an event. But a similar forum had previously been organized in 2015 at a cost of RM10 million to the taxpayer.

    In the parliamentary reply given to me today, the cost to the taxpayer for organizing this event has escalated to RM15 million! (See Appendix 1)

    When government funding to our universities and our hospitals are being cut left, right and center, and government subsidies for essentials such as sugar and cooking oil are being cut, why is the government subsidizing an event that will be almost exclusively attended by affluent and well-connected Malaysians? So that the Prime Minister will have more opportunities to take selfies with celebrities? This is a slap in the face of Malaysians who are suffering because of increases in the cost of living and cuts in government expenditure. The organizers of the event should be ashamed of themselves for asking the government for RM15 million to organize this forum for the rich, of the rich and by the rich.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://globaltransformation.com/

    Appendix 1: Answer to my Parliament Question of the Government Allocation for the Global Transformation Forum 2017

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