PETALING JAYA: Malaysians are no strangers to politicians promising the moon to win votes.
From toll-free highways to delaying repayments on student loans, this laundry list of pledges has invited rigorous public debate.
But one that has sailed inconspicuously under the radar is Rafizi Ramli’s 2013 pledge to lower the prices of cars through the reduction of excise duty if the Pakatan Rakyat took power in the 13th general election.
There is a video recording, taken in the lead-up to GE13, of Rafizi outlining a formula that would gradually reduce sales and excise duties on cars and covering the inevitable shortfall in government revenue with open auctions for the sale of APs (approved permits for the import of cars).
Now almost 10 years on, with Pakatan Rakyat having morphed into Pakatan Harapan and winning the election, Rafizi is finally in a position to effect change.
The newly minted economic affairs minister has yet to revisit the promise he made, but his deafening silence has not gone unnoticed at a time when many Malaysians are gripped by a cost-of-living crisis.
An essential expense
Even in such testing financial conditions, cars remain a necessity given the unreliable public transport and poor last-mile coverage.
As Pearly, who is looking to buy a car for her daughter, pointed out, cars are costly but alternatives are limited.
“I want my child to have the option to take public transport but I cannot trust the system. The LRT is always breaking down and buses never come on time,” she told FMT Business when met at a car showroom recently.
Faizal, another commuter who is also looking to buy his own set of wheels, said it would have been beyond his means if he could not lengthen the repayment period to nine years.
“At least it leaves me enough money, after the monthly instalment, to continue paying the tuition fees for my children,” he said. “I have young children so I cannot afford to not have a car.”
The irony is that going for lower instalments over a longer repayment period also means paying a lot more for the car ultimately.
Eroding trust
Rafizi’s posturing is a reflection of the eroding level of trust Malaysians now have in their politicians.
According to the 2022 Edelman trust barometer report, six in 10 Malaysians tend to not believe anything the government tells them unless there is solid proof of its authenticity.
Many whom FMT Business spoke to expressed despondency towards Rafizi and suggested that politicians only made populist promises to woo voters.
“We have waited long for so many promises (to be fulfilled), yet there has been no delivery on those pledges,” a gentleman named Hong said.
Another was more blunt. “How can they lower car prices when the government has no money?” she asked.
Contrasting views
Interestingly not everyone agrees that cars should come cheaper.
The Consumers’ Association of Penang (CAP) said the fact that the demand for cars continue to soar even as more people complain that they are getting too expensive only shows that the government should do more to encourage the use of public transport.
CAP president Mohideen Abdul Kader said the expansion in car ownership has only led to environmental damage and unprecedented traffic congestion which, if left unchecked, would impede productivity.
Reducing prices will only increase car ownership, he told FMT Business.
“The government should, instead, switch its focus to diverting revenue from (taxes on) car sales to improving public transport,” he added.
However, a long-time car journalist batted away such notions. He said that while drastic action must be taken to raise the disposable income of people in the B40 group, the tax system should also be revised to base duties on emissions.
“Those in the B40 group usually drive cars with significantly lower emission than those in the M40 and T20 groups. They usually drive cars like Perodua Kancil, Kelissa or Axia, which have smaller engines,” he told FMT Business.
He said if the government is serious about helping those in the B40 group, it should put more money in their hands. “There is little chance that such a move will cause a surge in car sales because those in the B40 are not looking to own more than one car,” he added.
A key source of government revenue
Why the silence, Rafizi? Unfortunately FMT Business’s attempts to get the minister to respond have drawn a blank.
Nonetheless, the revenue from the duty on car sales may offer a clue. According to the Malaysian Automotive Association, the taxes on car sales could hit RM10.7 billion in 2022, up from RM6 billion in 2020.
It is just too lucrative for the government to give up.
Former British prime minister Tony Blair, in a quip about political courage, once said that “to be prepared to lead is to be prepared to decide”.
It is a piece of advice that Rafizi should take to heart.