Sinatra_Z - Selangor

I am particularly happy with the free water that the Selangor state government have approved and it comes as a very helpful rebate when Oil and Utility bills are up. Even though I am a BN man (yes BN not just UMNO) I have to give credit where it is due. Indeed it is refreshing to see this kind of governance compare to the previous government palace of Kelang fiasco which I shall not dive further as the star of the whole episode had passed away.

However me being me, I don't like to take things on the face value. It's not that my nature is to go against the current Selangor government for no particular reason but being an opposition supporter (in case of this state) one must play the role of an opposition effectively. In which I must be more critical of the move and decisions made by the current state government. Now it's fine they want to give free water, which I applaud but it's the promises and the maths that makes me a wee bit skeptical.

You see this move means that Selangor will pay RM 11.40 for each household. It is written in the news that this would cost the state gov 11 million plus each month. According to DrKhir's blog (www.drkhir.com) this new scheme has a small loophole in which the 20 square meters of free water includes those with a united water bill such as apartments and flat units. These sort of housings don't have separate water bills but instead they are charged in a whole bulk to which their respective residents association will collect money from each units to pay the bills (don't ask me why we have a really dumb policy). Now these residents get free water based on that one big bill which is unfair, Khir Toyo are suggesting that these people will get free water supply based on the number of units in a bloc of bill

20M x Number of houses

I am pretty sure that the current state government will agree with this as a lot of the lower income group come of these flat units. What I am more concerned about is this...

Currently the state spends 11 million plus a month excluding these flats and apartments which their numbers are quite significant especially in the Klang Valley area. Let's just say that 20-30% (which is a fair estimation) of the houses in Selangor are Apartments and Flats. This means that the government would have to bear a 25% (mean value) of extra costs, which is about 13.75 Million a month (estimation). So in a year the Government would spend about RM 165 Million a year just for water subsidies. A few months back I attended a forum organized by MyKMU in which Dr Khir was one of the speakers. I asked him about the houses that the state government bought for their Exco's and about wasting state money, he went on this long explanation on why he did that and in that reply he stated that the Selangor government through PKNS have a suplus of 400 Million in which he left the government in a good state.

So according to my calculation the current state government would have to spend about 41 percent of the total cash (or at least owned by PKNS) to cover this cost. Now this 400 Million is something I heard from Dr Khir in a forum which may include assets as well (which is more likely). So what worries me is that in just a year the state govenment would have to spend up to 41 percent of PKNS coffers to cover for this and it is just for water alone.

Now one might say that Khalid Ibrahim being a former CEO would know how to generate income for the state. However what worries me is not the MB but the promises that PR made during the elections, they promised all sorts of benefits such as lower housing tax, rebates, scholarship for Selangor students and many more. This will not only burden the government spending but also limit their income capacity. Pakatan Rakyat shows itself as a coalition that favours the little people and are known to be friendly to small traders and stalls so increasing tax in this sector (or introducing new taxes) is very unlikely.

Oh let's not forget the 100 million pig farm project.

So in all the State Government would have to spend more that 265 Million Ringgit this year alone.

Khalid Ibrahim better live up to his name or there is going to be trouble. If my numbers are right (though it has a lot of assumptions and I heard of numbers) they would eat more than 50% of the state's coffers, and we have yet to include repair costs, new roads, maintenance, administration and other usual costs in which a government would have to deal every year.

I may sound like a cold hearted capitalist in this article but like it or not we have to deal with reality.

And the reality is there is no such thing as a free lunch in today's world.