Income tax laws, to be an instrument of equity and the fairer distribution of income and social opportunities, must not be rigid and inflexible – but must be alive to the economic problems and difficulties of taxpayers.
There has been a lot of talk about restructuring of society, but there does not appear to be any realisation of the need to restructure our taxation laws to achieve a progressive, poverty-free Malaysia.
It is indeed ironical and a Malaysian tragedy that, while every year, the government claims that it is spending more and more money on education, more and more Malaysian youths experience the loss or dimunition of higher education opportunities in Malaysia.
The only avenue left for them is to go overseas like England, Australia, to pursue further studies.
Apart from the wealthy families, this is a crushing financial burden on parents who have to bear these educational expenses. It will not be hard to imagine the financial burden of parents who have two or three children in post-secondary stage and doing higher studies abroad – which is becoming more and more common. This is not because Malaysians have become richer and are more able to afford to send their children to study overseas, but because parents are forced to raise funds by whatever means, even getting into debts, to send their children overseas.
I know there are powerful leaders in government and ruling parties who frown upon and are critical of the increasing spate of Malaysian students going abroad for higher studies.
These leaders are narrow-minded and short-sighted. Higher education is a form of national investment, and as their policies have made it impossible for them to find places in local universities and colleges, not let or hindrance should be put in the way of free pursuit of higher studies abroad.
In fact, far from putting obstacles in the way, the government – as a government of the people – has a duty to help Malaysian parents in the financial burden of sending their children for higher studies overseas.
The Finance Minister announced in this budget an accelerated depreciation allowance as high as 80 percent on plant and machinery to encourage the establishment, modernisation and expansion of selected industries and activities. The purpose is to encourage physical investment leading to greater productivity. Education is a human investment leading to greater national productivity. If capitalists and manufacturers are encouraged and given incentives to invest in physical plants and machinery, I do not see why an enlightened government should not encourage Malaysian citizens in investing in human capital and qualified manpower by sending their children abroad for higher studies when they could not find locally.
The government subsidises Malaysian students who study in the local Malaysian universities. But it does not give a single cent of subsidy for students who go abroad for higher studies, although their contribution to the country will not be less than Malaysians who study in the local institutions. On the countrary, the Ministry of Education seemed bent on making it more difficult for students to go abroad for higher studies – as for instance, the recent regulation imposing a $1,500 deposit for every intending student to the United Kingdom.
I therefore call on government to grant tax reliefs or an educational rebate to Malaysians with less than $15,000 annual income to meet the educational expenditures of their children abroad, where they have not received governmental help, both on grounds of equity, as this will help remove social injustice and make the lower income Malaysians more able to compete with the higher-income Malaysians, and on grounds of national interest – as this a valuable form of national investment in human skills.
It is for this reason why I feel quite disappointed by the Finance Minister’s budget, for he failed to grasp the opportunity to lead a feseh approach to the budgetary policies by identifying areas where innovative fiscal and budgetary policies can be of most impact in achieving the objective of a fairer, more just and equal Malaysian society.
Speech by DAP Secretary-General and Ketua Pembangkang, Lim Kit Siang, in the Dewan Rakyat on the 1977 Budget on Monday, 1st November, 1976