Why Target the Rich?

 

The Malaysian government is trying hard to find a solution to the petrol and diesel subsidy bill that has exploded tenfold. The most attractive political targets are “the rich”. Taking away subsidies from the wealthy feels socially equitable and satisfies public envy with “Robin Hood” economics. The political quick fix is rarely the most effective economic solution.

 

T20 = the top 20% of Malaysian households by income. Nationally, that starts somewhere above RM12,679 a month. But that’s a national cutoff; each state has its own income distribution, which means the bar is different depending on where you live. The most reliable state-level number DOSM gives us is the D9 median; the midpoint income of households in the 9th decile, which is the lower half of T20. If your household earns around this amount, you’re solidly in the top 20% of your state.

 

Source: https://www.wikihow.com

 

So what’s the number for your state?

 

State	“You’re T20 here if you earn around…”
W.P. Putrajaya	RM21,570
W.P. Kuala Lumpur	RM19,494
Selangor	RM18,105
Johor	RM14,590
Pulau Pinang	RM14,016
W.P. Labuan	RM13,316
Melaka	RM13,241
Negeri Sembilan	RM11,348
Sarawak	RM11,150
Terengganu	RM11,015
Sabah	RM10,709
Perak	RM9,567
Pahang	RM9,167
Perlis	RM9,135
Kedah	RM9,107
Kelantan	RM8,296

Based on D9 median household gross income, DOSM Household Income Survey 2024.

 

Selangor’s D9 median is RM18,105. Kelantan’s is RM8,296. That means the income that makes you top 20% in Kelantan is less than half of what you’d need in Selangor for the same status. Same country, very different reality.

 

KL and Putrajaya sit even higher, but they’re a bit of an outlier; small populations heavily skewed towards senior civil servants, executives, and corporate professionals. Not really representative of a typical state.

 

T20 isn’t one thing. It splits into two halves; D9 and D10 and the gap between them is significant. Take Selangor. D9 median is RM18,105. D10 median? RM28,901. That’s a RM10,000 jump between the two halves of the same bracket. In KL, D10 hits RM31,816. This is why you’ll often see T20 averages quoted much higher than medians; a layer of very high earners at the top of D10 pulls the average up. The median is the more honest number for most people. These are household numbers, not individual salaries. It’s gross income.

 

You cannot target the “rich” efficiently or effectively. Relying on the T20 classification is flawed because a household may fall into the T20 bracket collectively but the individuals within it, stay-at-home parents or children, have little or no personal income. Second, the MyKad, technology cannot identify these individuals at the pump and the Padu system is incomplete. Third, factoring in net disposable income shrinks the “no subsidy” group significantly.

 

If the goal is fairness and efficiency, tiered pricing, like we have for electricity is better. Instead of a binary “yes or no” based on income brackets, we should make the transition to a use-based model where the more petrol you use, the less subsidy you receive. For instance, a full subsidy could apply to the first 100 litres per month. The next 50 litres could be subsidised at 50% and the next 50 litres at 25%. Above 200 litres, the market rate would apply. This system is naturally progressive. Low-income groups, who typically buy less fuel, would enjoy full subsidies. Wealthy individuals with high-consumption vehicles would pay more but importantly, they are given the choice to economise.

 

If a T20 individual chooses to drive a fuel-efficient car or drive less, they can benefit from the baseline subsidy too. This solves the identification problem and focuses on consumption behaviour rather than flawed income data.

 

Remember, the top 15% of earners contribute 80% of total individual income tax. In contrast, those earning below RM100,000 annually contribute only 14%. When you factor in consumption taxes and investment taxes, the wealthy are already the primary contributors to government revenue. High taxes act as a disincentive to work and drive talent and entrepreneurs toward low-tax jurisdictions. We risk losing the very human capital needed to make Malaysia a high-income nation.

 

It is time for a fresh look at revenue that moves beyond the “Groundhog Day” debate of SST versus GST. The latter, while transparent, is often preferred by businesses because they can reclaim it, ultimately leaving consumers, especially the poor, to bear the cost. Instead, we should look at the modern reality of our economy.

 

Over 80% of transactions are now electronic, totalling RM1.4 trillion annually. A tiny electronic payments tax (EPT) of just 1% on both buyers and sellers could raise RM14 billion. The rate is low because the tax base is so massive. It is easy to collect at the point of sale, nearly impossible to evade and so small that it does not distort consumer behaviour or punish hard work in the way income tax does. If not as I have said before, do a Tobin tax, which levies a fraction of the forex transaction value each day and that accumulated will pay for the subsidies. Try to be creative, not roll-out measures that only irritate people!

 

References:

Why targeting the rich is not the silver bullet, Geoffrey Williams, Free Malaysia Today, 16 May 2026

 

Here’s How Much Malaysians Need to Earn to Be Considered T20, According To DOSM, WeirdKaya, 15 May 2026

Will New Regulations on Fully Imported EV Spur Growth?

 

The Ministry of Investment, Trade and Industry (Miti) has announced that all completely built-up (CBU) EV imports will be subject to two key conditions: a minimum cost, insurance and freight (CIF) value of RM200,000, and a revised minimum motor power requirement of 180 kilowatts (kW) and above, down from the previous 200kW threshold. 

Is setting a higher minimum vehicle value for imported EVs to encourage development and strengthen localisation and domestic EV manufacturing in Malaysia? After over 40 years of operation, Proton's impact on developing a self-sustaining Malaysian automotive vendor ecosystem remains mediocre to poor. Proton did bolster vendor confidence, shifting toward high-tech, localized production (e.g., in Tanjung Malim) and increased RM3.2B in local sourcing in 2025 but all these happened post the Geely partnership.

 

Source: https://en.wikipedia.org

Proton, established in 1983 as Malaysia’s national carmaker, started ahead of China's domestic automotive boom, launching the Proton Saga in 1985. The initial objective for the set up of Proton was for the establishment of a fully competitive, local automotive industry. Since its inception, Proton was protected and had a price advantage that was unfair to the other car manufacturers and importers. That being so, Proton could possibly have felt that it was too strong, too well-placed, too invincible and so became callous in their approach towards long-term marketing. Or for that matter on R&D. 

Proton then drifted off tangent. It did not focus and meet the quality requirements of the market, what the consumers want. The cars it sold had a lot of issues. Realising that they couldn’t do it on their own, they entered a partnership with China's Geely. Geely only started making passenger cars in 1997. 

It has been over 40 years, but Proton has remained a bonsai! It has become common now that if we can’t compete in any industrialisation projects, the government will introduce new regulations to protect the failing project. 

Just take a look at those few big GLC banks and see how they work. Lackadaisical. Yes, they report huge numbers in its profitability, but they are operating in a near `monoplistic’ environment in Malaysia. Open up the banking sector and see how they perform. A service transaction that needs only 10 minutes can take more than an hour! 

Local manufacturers must be proud of the quality of the goods or services that they sell. They need to be committed not only to customer satisfaction but to customer delight. When that happens, the hope for efficient automotive vendor ecosystem that produces world class products will then evolve. And stop this ‘protectionist’ measures for a 40-year-old baby. It is either a bonsai or suffering from “Down Syndrome” (my apologies to those who unfortunately suffer from it). If you want to thrive, you must compete. Ask Geely or BYD. How do they do it? The Chinese government gives them subsidies for R&D and related areas. So, we should support in R&D through a National R&D Fund? 

References:

PMX, do you really believe the new regulations on fully imported EV will spur growth of the local automotive sector? Opinion, FLK, Newswav, 16 May 2026 

Malaysia raises entry bar for imported EVs from July 1, sets RM200,00 minimum price threshold, Syafiqah Salim, theedgemalaysia.com, 6 May 2026

Many IPOs, Little Depth!

 

Behind Malaysia’s impressive initial public offering (IPO) figures lies a far less flattering reality. The local stock exchange is not just producing many IPOs – it is also producing many small or micro-IPOs. Over the past several years, Bursa Malaysia has seen a wave of micro-IPOs raising less than RM50mil. Many companies come to market with fundraising exercises so small they resemble private placements more than meaningful public listings. 

The conversation around Bursa Malaysia has long centred on the lack of mega or “blockbuster” IPOs. That remains a serious issue. Malaysia has not consistently produced the kind of billion-ringgit listings that dominate regional exchanges such as Hong Kong, India or even Indonesia. But the rise of micro-IPOs deserves equal scrutiny because it points to something deeper about the state of Malaysia’s capital markets.

Between March 2025 and May 6, 2026, out of 50 listings on the smaller ACE Market, micro-IPOs represent 29 of them, or 58% to be exact. This partly explains the decline in total funds raised in the IPO space last year, despite an increase in the number of listings (see chart). In 2025, while there were 60 IPOs on Bursa Malaysia, the total funds raised was RM5.96bil, compared to RM7.44bil in 2024 (55 IPOs). This represents a decline of almost 20% in total funds raised. Meanwhile, average funds raised dropped from RM135.3mil in 2024 to RM99.3mil in 2025. 

The number of ACE Market IPOs has increased tremendously in less than a decade. From just six listings in 2017, a total of 44 IPOs were recorded on the ACE Market in 2025. This represents nearly three-quarters of total IPOs on Bursa Malaysia – across the Main, ACE and LEAP Markets combined. With this, Malaysia’s IPO market also topped South-East-Asia by volume. The 2025 performance was notably the highest since 2006. In 2025, the domestic equity market also saw a first secondary listing – UMS Integrated Ltd – as well as the listing of a subsidiary of a South Korea Exchange-listed company in Malaysia. Deloitte Southeast Asia Ltd, in its Southeast Asia IPO Capital Market 2025 report, said the largest IPO of 2025 – Eco-Shop Marketing Bhd – came from the consumer industry. 

In 2024, the largest IPO – 99 Speed Mart Retail Holdings Bhd – was also from the same sector. While Malaysia led the region in terms of listing volume, Deloitte noted that none of South-East-Asia’s four “blockbuster” IPOs originated from the country. The four IPOs, each raising more than US$500mil, came from Singapore, Vietnam and the Philippines. 

A stock exchange cannot thrive on listing volume alone. It needs depth. It needs scale. It needs companies large enough to attract institutional participation, analyst coverage, foreign interest and sustained liquidity. Without these, the market risks becoming crowded with small counters that generate excitement for a few trading sessions before fading into illiquidity. 

The worrying part is not merely the existence of micro-IPOs. Smaller companies should have access to public capital markets, and many successful global firms began as small listings. The issue lies in the concentration of such offerings. When too many listings raise only modest sums, it raises uncomfortable questions about the overall quality and maturity of the pipeline.

In some cases, IPO exercises appear driven more by branding, shareholder exits or short-term valuation gains rather than long-term expansion strategies. The danger is a gradual dilution of market quality. Investors begin viewing IPOs less as opportunities to participate in future corporate champions and more as short-term trading vehicles. Market confidence becomes increasingly dependent on listing pops instead of long-term value creation. 

Malaysia cannot afford that outcome. It risks being trapped in an uncomfortable middle ground where it produces many IPOs, but too few that genuinely move the needle. The irony is that Malaysia does have companies capable of scaling into larger listings. The country has strong ecosystems in semiconductors, healthcare, industrial technology, digital infrastructure and consumer brands. Regulators may also need to actively scout high-quality regional companies for listing in Malaysia. This would require more proactive “door-knocking” efforts, rather than waiting for firms to approach the exchange. 

Reference:

Many IPOs, little depth, Ganeshwaran Kana, The Star, 11 May 2026

Political Party’s Election Expenditure up to RM5b?

 

The Institute for Democracy and Economic Affairs (IDEAS) found that during an election period in Malaysia, an established political party may spend as much as RM5 billion to support its candidates and campaigning cost. 

Newer parties typically spent about RM1 million during an election period, said IDEAS. The think tank said the financing of political parties and candidates in Malaysia remains “costly, opaque, and uneven”, with established parties benefitting from stronger fundraising networks than newer ones as well as underrepresented groups. 

Source: https://my.linkedin.com/company/ideasmalaysia 

The report, which drew on interviews with politicians, party officials and political finance experts, said established parties are generally able to absorb higher operating costs and access more diversified funding streams, including corporate donations, party-linked businesses and state-linked resources. The study also highlighted rising expenditure on media and digital campaigning, including the use of analytics, videographers and social media teams to shape online narratives ahead of elections. The report also raised concerns over weak transparency and oversight in political financing, noting that parties are not legally required to disclose sources of donations, membership fees or detailed audited accounts. 

The report warned that the high cost of politics risks entrenching incumbent parties and limiting democratic competition, particularly for women, youths, ethnic minorities and lower-income groups seeking political participation. 

It also highlighted how rising financial demands increasingly shape candidate selection and internal party hierarchies, with those with access to financial resources find easier paths for political advancement. The opacity surrounding political financing, creates risks of undue influence, as donors and financiers may gain leverage over political parties and policymaking without public scrutiny. 

IDEAS also noted that some political financing practices blur the line between party and state resources, particularly when government-linked entities, welfare allocations or constituency-related programmes are used for political mobilisation. 

IDEAS called for the immediate enactment of a Political Financing Act to improve transparency and introduce clearer rules governing political donations and expenditure. 

This is not unique problem to Malaysia. The U.S. is a prime example now of how money can drive elections and “transparent” corruption is acceptable.  We can’t follow the U.S. model – it is headed for failure. We need to have the moral compass – “true North” – to frame how political funding can be regulated. Why can’t we have a pool of funds and a regulator that gives to a party according to number of members registered. 

Reference:

Established political party's election expenditure up to RM5b, IDEAS paper finds, Emir Zainul, theedgemalaysia.com, 7 May 2026

Can We Plant Trees in a Pothole?

 

There are many recognised methods for reporting potholes. Citizens can lodge complaints, submit photographs, contact local authorities or tag municipal agencies on social media while hoping their vehicle suspension survives long enough to see progress. But somewhere along the way, Malaysians appear to have developed an alternative system, one involving agriculture. A recent social media post by @dahfollowbelum showed a banana tree planted squarely inside a pothole. This has amused and impressed netizens alike. 

 

Source: https://focusmalaysia.my/@dahfollowbelum 

According to the post, the authorities quickly came to repair the road after noticing the banana tree growing there. We all know that some potholes are so well established that they feel less like temporary damage and more like unofficial landmarks. Yet the moment greenery enters the picture, everything changes. A banana tree standing defiantly in the middle of a road has a way of transforming road damage into public theatre. 

Then there are retired folks who try to repair potholes with their own tools. Why? Because they see danger for motorcyclists or even car drivers. They don’t have to do it, but it is just their way of helping local councils – who may have budget issues – tak ada bajet! 

Better is to grow bananas, jagung or other fast-growing fruits for consumption. This may help achieve food security. The only drawback is night driving – for which we could use some cheap reflectors or solar lamps to help motorists? 

Why can’t the Federal Government provide each constituency, local council with adequate funds to repair, re-tar roads? Then hold them accountable for outcomes? A re-tarred road is a great sight to see and feel. Many voters will support the initiative, something tangible and meaningful. It also provides contracts for small businesses, employment for locals and the multiplier effect locally. Today, even tolled highways are with potholes. The “tidak apa” attitude is all pervasive. Unless residents and citizens demand changes, we will have the finance minister sending money to Gaza! 

Reference:

Plant trees in a pothole to speed up the repair work, claims a netizen, CS Ming, Focus Malaysia, 25 May 2026 

 

A+ in Moral but Bankrupt in Integrity!

 

We have created a system where a student can ace Pendidikan Moral, walk out of the exam hall, and grow up believing that integrity is flexible, honesty is situational, and responsibility applies only when convenient. This is not about blaming students. It reflects a deeper contradiction within our system. 

The Education Ministry had the right intention. Moral education was meant to shape character. But somewhere along the way, it became formulaic: memorise values, learn the right keywords, reproduce model answers, secure the “A”. The result is a generation that can articulate moral principles fluently but struggles to live by them. Honestly, should we be surprised?

 

Source: https://www.wikihow.life

In classrooms, students are taught that honesty is a core value. Outside, they quickly learn what seems to matter more: results. Avoid getting caught. Cut corners if it brings advantage. Say the right things, but do what benefits you. That becomes the real lesson—the one no textbook acknowledges. 

Psychologist Lawrence Kohlberg argued that morality cannot be memorised. It develops through difficult choices, real consequences and the courage to act. Yet our system often does the opposite. It minimises risk, rewards memorisation and encourages conformity. We are not shaping character. We are teaching performance. Road rage turning violent. Academic dishonesty dismissed as minor. Public trust eroded by repeated misconduct. These are not isolated incidents. They reflect a deeper issue. We claim to value integrity but have not fully internalised it. 

So what does an A+ in Moral actually mean? It does not necessarily reflect honesty. At best, it shows that a student understands what is expected. It says little about how they will act when faced with pressure or temptation. If we are serious about change, small adjustments will not be enough. A more fundamental shift is needed. 

Moral education must move beyond exams and into lived experience. Community service should be meaningful, not a formality. Students should be exposed to real-world challenges—inequality, hardship, ethical dilemmas—so they can develop empathy and judgement. Assessment should not focus solely on written responses, but also on behaviour and accountability. 

There is also a broader issue we cannot ignore: inconsistency between what is taught and what is practised. Values promoted in schools must be reflected in wider society. When contradictions become visible, they undermine credibility. Young people are perceptive. When they see gaps between principle and practice, they may conclude that values are optional. 

As reflected in the teachings of many traditions, education is not only about producing capable individuals. It is about developing trustworthy human beings. Without that foundation, knowledge becomes a tool without direction. Malaysia risks becoming a society of high achievers with low accountability—impressive on paper, but fragile where it matters. An A+ in Moral should carry meaning. At present, it does not. Until we close the gap between what we teach and what we practise, we are not building character. We are sustaining an illusion. And illusions do not last. 

Reference:

OPINION | A+ in moral but bankrupt in integrity, K. T. Maran, Newswav, 10 May 2026

Two-Teacher Classroom Model!

 

A Newswav poll of around 2,100 respondents shows strong public scepticism towards the idea of having two teachers in a single classroom. While the Ministry of Education plans to introduce a co-teaching model nationwide from 2027, 83% voted “No”, compared to just 17% who believe it would improve student learning.

 

 

Under the proposed model, two teachers will co-teach the same class simultaneously, working together to deliver lessons, manage classroom dynamics, and support student development. According to the Education Ministry, this approach could help address mixed learning abilities, improve engagement, and reduce the burden on individual teachers. 

Internationally, co-teaching has been used in some education systems to support inclusive learning, particularly for students with different learning abilities. Education Minister has said the model is intended to promote better interaction, character-building, and classroom support, particularly in increasingly diverse learning environments. 

Poll comments reveal that most scepticism centres on priorities and practicality. Many respondents questioned whether placing two teachers in one classroom is the best use of limited resources, especially when schools continue to face overcrowded classes, teacher shortages, and heavy administrative workloads. Several felt the funding would be better directed toward improving school facilities, hiring more teachers to reduce class sizes, providing school nurses or counsellors, or offering free breakfast programmes for students. 

A common suggestion was that smaller classes, rather than co-teaching, would allow educators to focus more effectively on individual students. Others highlighted that teachers are already stretched thin by paperwork and deadlines, arguing that reforms to curriculum design, assessment methods, and school management should come before introducing new teaching models. 

As usual, the education minister is the top star for “blunders”. Can’t they do a check with Singapore, how they do it? Is it below our dignity or maruah? 

Reference:

Survey: 83% of Malaysians Unconvinced by Two-Teacher Classroom Model, Newswav,
13 May 2026