Unfair to impose blanket tax on property owners


THE Penang government should first study the assessment rates for different categories of properties before imposing a blanket tax on everyone which is unfair, says Citizen Awareness Chant Group (Chant) legal adviser Citizen Awareness Chant Group (Chant) (pic).He said the state should look into the categories of assessment rates like those imposed in developed countries before imposing the rates on ratepayers.

“The lowest charged fees should be for the disabled (OKU) owners and those in the B40 group.

“For owner-occupied properties, they should be charged a lower rate and the highest rates should be imposed for commercial and industrial offices, ” he said at a press conference at Jalan Pykett on Wednesday.

Yan Lee said although commercial properties like restaurants and hawker complexes would be paying higher assessment, it is fair as commercial properties have more rubbish to be cleared.

“These premises frequently take up the cost for public health inspection and council cleaning services.

“So, there should be a categorisation of how the rates are charged, like different rates for properties that are also rented out, vacant or used for commercial purposes, ” he added.

Yan Lee said in developed countries, there are categories which include owner occupied, rented out properties, unoccupied properties, rented out long-term or Airbnb properties, residential properties used for offices and industrial properties.

“But, as the state is moving forward and following the footsteps of a developed country, there is also the question of how these categories can be monitored.

“In this case, the state should consider having an enforcement team like in Australia to check on the properties at random.

“With the usage of a digital camera similar to those used for parking fine routines, photos can be taken when checks are done on the properties.

“We hope the state would do a study to look into this and try to implement the system, along with imposing different rates for the different properties, ” he said.

Earlier, it was announced that an assessment rate review would see almost all residential property owners in Penang paying more in assessment taxes.

On the island, a total of 255,280 out of the 263,544 property owners would have to pay more in the revised assessment tax, while the increase would involve 196,347 out of 215,586 houses on the mainland.

Following the announcement, the Penang Island City Council (MBPP) and Seberang Prai City Council (MBSP) started hearing sessions for objections against the review in October.

It was reported that MBPP had received a total of 54,459 objections from over 322,000 ratepayers, while MBSP received a total 40,666 objections from 327,000 ratepayers.

Meanwhile, Yan Lee said that in the case of the parcel rent, (previously known as the quit rent), commissions should be applied based on how the land is used.

“The increase in the quit rent was announced earlier from RM10 to RM30. Quantum-wise, the amount is not a lot, but percentage wise, it is a lot, ” he said.

Earlier, the quit rent came into effect where rates are calculated based on the total plot of land which the building was built on and rates for parcel rent are based on the size of each unit.

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Design engineers at fault in landslide tragedy, act against negligent engineers


Design engineers at fault in landslide tragedy | The Star Online
https://rightways.files.wordpress.com/2017/10/8723e-penang2blandslide_tanjung2bbungah1.jpg

GEORGE TOWN: The State Commission of Inquiry (SCI) tasked with investigating the Tanjung Bungah landslide in October 2017 has found the design engineer of the slope primarily responsible for the incident that claimed 11 lives.

The SCI, in its 116-page report made public, has recommended that the engineer be investigated by the police under Section 304A of the Penal Code for gross negligence.

Besides the engineer, the commission found another design engineer responsible for being “contributorily negligent” for allowing excavation to be carried out without design, engineering calculations and supervision.

Chief Minister Chow Kon Yeow said the commission found that the slope failure was a man-made tragedy and entirely preventable if those in charge had taken necessary and proper steps to ensure the stability of the slope and the safety of the workers.

“The landslide did not develop overnight, it was a disaster waiting to happen over a period of time.

“There were ample warnings which were sadly unheeded or inadequately heeded,” Chow said of the report at a press conference at his office in Komtar here yesterday.

Chow said the report, dated July 22 this year, was a result of public hearings conducted over 26 days with testimonies from 28 witnesses.

“The commission also considered voluminous documents, reports, photographs and drawings, as well as the opinions of six expert witnesses.

“The report provides further analysis of the background facts, excerpts of testimonies recorded during the hearings and findings on liability against several parties,” he said.

The commission also found the Occupational Safety and Health Department negligent for failing to take adequate steps to ascertain the extent of the danger posed by the unsafe slope, by not promptly issuing a prohibition notice after its visit to the site on Aug 18, 2017, which was two months before the fatal incident.

Chow said copies of the report would be sent to the police, Attorney General’s Chambers, Board of Engineers Malaysia and other authorities involved.

“The report also contains nine recommendations that the commission hopes will serve as guidelines and prevent such incidents from recurring,” he added.

On Oct 21, 2017, a temporary slope in the construction site of a high-rise apartment block in Tanjung Bungah collapsed while workers were trying to stabilise it. Tonnes of earth crumbled, killing 11 workers.

The full SCI report can be bought at Level Three, Komtar, for RM50 per copy between Sept 3 and 30. For more details, call 04-650 5480.- Source link

Chow: Agencies have to act against negligent engineers

Penang chief minister Chow Kon Yeow

GEORGE TOWN: It is up to the relevant agencies to take action against the consultant engineers who were found negligent, resulting in the Tanjung Bungah landslide tragedy, says Chief Minister Chow Kon Yeow.

“It is up to the agencies and the police to take action as recommended by the State Commission of Inquiry (SCI).

“I have also directed the Town and Country Planning Department, Penang Island City Council, Seberang Prai Municipal Council and other related agencies to come up with recommendations to improve hill development.

“It was discussed at the State Planning Committee meeting and I have directed state housing, town and country planning and local government committee chairman Jagdeep Singh Deo to head the committee and come up with the recommendations within a month, ” said Chow at Komtar here yesterday.

It was reported that the SCI tasked with investigating the Tanjung Bungah landslide in October 2017 had found the design engineer of the slope primarily responsible for the incident that claimed 11 lives.

The SCI, in its 116-page report made public, had recommended that the engineer be investigated by the police under Section 304A of the Penal Code for gross negligence.

Besides the engineer, the commission found another design engineer responsible for being “contributorily negligent” for allowing excavation to be carried out without design, engineering calculations and supervision.

Penang Island City Council engineering director A. Rajendran, who was also present at the press conference, said the stop-work order on the project was lifted after the developer completed mitigation works.“However, different engineers have been overseeing the project since work resumed some time ago, ” said Rajendran.

On Oct 21,2017, a temporary slope at the construction site of a high-rise apartment block in Tanjung Bungah collapsed while workers were trying to stabilise it.

Tonnes of earth crumbled, killing 11 workers. – Source link

Read  more:

 

Tanjung Bungah landslide incident entirely preventable, concludes …

Act against engineers for negligence, urges Tanjung Bungah …

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Penang commission moots criminal charges against consultant …

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Fitch affirms Malaysia’s rating at A- with stable outlook, but heed the economic warning


Image result for Fitch ratings logo/images
 


Fitch Ratings

 

KUALA LUMPUR: Fitch Ratings has affirmed Malaysia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘A-‘ with a Stable Outlook.

According to a statement posted on the interantional rating agency’s website on Thursday the key rating drivers were its strong and broad-based medium-term growth with a diversified export base.

However, it also was concerned about its high public debt and some lagging structural factor.

Main points:

* GDP to grow at 4.4% in 2019 and 4.5% in 2020

* Global trade tensions to impact economy

* Private consumption to hold up well, public investment to pick up

* Outlook for private investment is more uncertain

* Weak fiscal position relative to peers weighs on the credit profile

* General government debt to fall from 62.5% of GDP in 2019 to 59.3% in 2021

* Malaysia relatively vulnerable to shifts in external investor sentiment

* Fitch expects another 25bp rate cut in 2020 on the back of continued external and domestic uncertainty.

* Banking sector fundamentals remain broadly stable

Fitch said Malaysia’s ratings balance strong and broad-based medium-term growth with a diversified export base, against high public debt and some lagging structural factors, such as weak governance indicators relative to peers.

The latter may gradually improve with ongoing government efforts to enhance transparency and address high-profile corruption cases.

Fitch expects economic growth to slightly decelerate in the rest of this year as a result of a worsening

external environment, but to hold up well at 4.4% in 2019 and 4.5% in 2020.

Malaysia is a small open economy that is integrated into Asian supply chains, but it also has a well-diversified export base, which helps cushion the impact from a potential fall in demand in specific sectors.

Global trade tensions are likely to have a detrimental effect on Malaysia’s economy, as with many other countries, but this may be partially offset by near-term mitigating factors, such as trade diversion, in particular towards the electronics sector.

Private consumption is likely to hold up well and public investment should pick up again in the next few years after the successful renegotiation of some big infrastructure projects, most prominently the East Coast Rail Link.

However, the outlook for private investment is more uncertain. FDI inflows were strong in the past few quarters, but investors will continue to face both external trade and domestic political uncertainty.

The Pakatan Harapan coalition took office in May 2018 with very high expectations. It has set a number of policy initiatives in motion, but holds only a small majority in parliament and has seen its previously high public approval rates fall significantly.

Uncertainty about the timing and details of the succession of the 94-year old Prime Minister Tun Dr Mahathir Mohamad also continues to linger.

A weak fiscal position relative to peers weighs on the credit profile. The government’s repeal of the Goods and Services Tax (GST) and replacement with the Sales and Service Tax (SST) soon after it took power has undermined fiscal consolidation.

The government aims to offset the revenue loss through measures to strengthen compliance, the introduction of a sugar tax and an increased stamp duty. Its fiscal deficit target for 2019 of 3.4% of GDP, which we believe will be met, includes a special dividend from Petroliam Nasional Berhad (PETRONAS, A-/Stable).

Political pressures and growth headwinds could motivate the government to increase its current spending, but we believe that if it does so, it would seek additional revenues or asset sales to contain the associated rises in the deficit and public debt.

Fitch estimates general government debt to gradually decrease from 62.5% of GDP in 2019 to 59.3% in 2021.

The debt figures used by Fitch include officially reported “committed government guarantees” on loans, which are serviced by the government budget, and 1MDB’s net debt, equivalent at end-2018 to 9.2% and 2.2% of GDP, respectively.

The government guaranteed another 9.2% of GDP in loans it does not service. The greater clarity provided by the government last year on contingent liabilities negatively influenced the debt ratios, but this is partly offset by the improved fiscal transparency.

Significant asset sales, as intended by the government, could result in a swifter decline in the debt stock than its forecast in its base case.

Progress in implementing reforms that institutionalise improved governance standards through stronger checks and balances, and greater transparency and accountability would strengthen Malaysia’s business environment and credit profile.

The World Bank’s governance indicator is still low at the 61st percentile compared with the ‘A’ category median of 76th.

An important change is that all public projects are now being tendered, which increases transparency, creates a level-playing field and should bring down project costs. Prosecution of high-profile cases may also help reduce corruption levels over time.

Malaysia has been running annual current account surpluses for the past 20 years, and Fitch expects it to continue to do so in the next few years, even though the surplus is likely to narrow to below 2% of GDP.

Foreign-reserve buffers were US$102.7 billion (4.7 months of current account payments) at end-June 2019, while other external assets are also significant, including from sovereign wealth fund Khazanah.

Malaysia is nonetheless relatively vulnerable to shifts in external investor sentiment, partly because of still-high foreign holdings of domestic government debt, although these have fallen to 21% from 33% three years ago.

Moreover, short-term external debt is high relative to reserves, although a significant part of this constitutes intra-group borrowing between parent and subsidiary banks domestically and abroad, reflecting the open and regional nature of Malaysia’s banking sector.

Monetary policy is likely to remain supportive of economic activity, after Bank Negara Malaysia’s (BNM) reduced its policy rate by 25bp to 3.0% last May, which seemed a pre-emptive response to increased external downside risk.

Inflationary pressures are limited with headline inflation at 0.2% in May 2019, still low due to the repeal of the GST and lower domestic fuel prices.

Fitch expects another 25bp rate cut in 2020 on the back of continued external and domestic uncertainty.

Banking sector fundamentals remain broadly stable. Elevated, but slightly declining household debt at 83% of GDP and property-sector

weakness should be manageable for the sector, but present a downside risk in case of a major economic shock.

The sector’s healthy capital and liquidity buffers, as indicated by the common equity Tier 1 ratio of 13.4% and liquidity coverage ratio of 155% at end-May 2019, help to underpin its resilience in times of stress.

SOVEREIGN RATING MODEL (SRM) and QUALITATIVE OVERLAY (QO)

Fitch’s proprietary SRM assigns Malaysia a score equivalent to a rating of ‘BBB+’ on the Long-Term Foreign-Currency (LT FC) IDR scale.

In accordance with its rating criteria, Fitch’s sovereign rating committee decided not to adopt the score indicated by the SRM as the starting point for its analysis because it considers it likely that the one-notch drop in the score to ‘BBB+’ since March 2018 will prove temporary.

Fitch’s SRM is the agency’s proprietary multiple regression rating model that employs 18 variables based on three-year centred averages, including one year of forecasts, to produce a score equivalent to a LT FC IDR.

Fitch’s QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within our criteria that are not fully quantifiable and/or not fully reflected in the SRM.

RATING SENSITIVITIES

The main factors that, individually or collectively, could trigger positive rating action are:

* Greater confidence in a sustained reduction in general government debt over the medium term.

* An improvement in governance standards relative to peers, for instance through greater transparency and control of corruption.

The main factors that could trigger negative rating action are:

* Limited progress in debt reduction, for instance due to insufficient fiscal consolidation or further crystallisation of contingent liabilities.

* A lack of improvement in governance standards

KEY ASSUMPTIONS

* The global economy and oil price perform broadly in line with Fitch’s Global Economic Outlook (June 2019). Fitch forecasts Brent oil to average USD65 per barrel in 2019, USD62.5 in 2020 and USD60 in 2021.


The full list of rating actions is as follows:

Long-Term Foreign-Currency IDR affirmed at ‘A-‘;

Outlook Stable

Long-Term Local-Currency IDR affirmed at ‘A-‘;

Outlook Stable

Short-Term Foreign-Currency IDR affirmed at ‘F1’

Short-Term Local-Currency IDR affirmed at ‘F1’

Country Ceiling affirmed at ‘A’

Issue ratings on long-term senior unsecured local-currency bonds affirmed at ‘A-‘

Issue ratings on global sukuk trust certificates issued by Malaysia Sukuk Global Berhad affirmed at ‘A-‘


But heed of Fitch’s economic warning

 

Fitch Ratings has affirmed Malaysia's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'A-' with a Stable Outlook.
Fitch Ratings has affirmed Malaysia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘A-‘ with a Stable Outlook.

The international Fitch Ratings has given us a warning on the outlook for the Malaysian economy, which we should not ignore.

In preparing for the 2020 Budget, the government’s economic and financial planners should take heed of this friendly warning and act sooner rather than later. We should not let this warning pass, without having more consultations with Fitch, on how serious their constructive criticism could turn out to be.

Fitch Ratings has affirmed Malaysia’s long-term foreign currency issuer default rating at A-, with a stable outlook. But we must seriously take note of the several reservations that Fitch has made, and consider and monitor them, to remain on even keel and progress further.

What are these warnings?

High public debt

The national debt is now confirmed by Fitch to be high. By whatever standard of measurement used – by us, the IMF or the World Bank and other agencies – there is now consensus that our debt is indeed high, although still not critical.

However, the debt has to be watched closely. We have to ensure better management of our budget expenditures and strive to strengthen our budget revenues, to reduce the pressure to borrow more in the short to medium term.

Some lagging structural factors

The structural factors would refer to our need to raise productivity, increase our competitiveness and meritocracy and strengthen our successes, in combating corruption and cronyism.

How far have we advanced to deal effectively with these longstanding structural issues? In the minds of our foreign and even domestic investors, how successful have we been compared to the previous regime?

Fitch expects the economy to slow down to 4.4% this year and 4.5% in 2020. With the US -China trade war looming large and the general world economic uncertainty, investors can get even more jittery and hold back their investment plans. Thus, the low economic growth rates for this year and ahead should not be ruled out.

If the economy softens further to around 4% per annum, the implications of unemployment, and especially for our graduates, could be worrisome. The small and medium businesses and farmers and fishermen and smallholders in our plantation industries could suffer much from any slowdown.

But we are still slow and are struggling in trying to restructure the economy. We have not yet adopted major changes of transformation of the economy, which is largely raced-based to the vital requirement, to become more needs-based in our policies and implementation.

We need a New Economic Model but it has been difficult to adopt it as soon as possible.


Weak governance relative to peers

To be fair, many measures have been taken to strengthen the institutions of government. We have seen this in the parliament select committees, the Election Commission, the MACC and the civil service and other institutions.

We cannot do too much too soon, as good governance takes much longer to restore and build, after several decades of neglect in the past. But our people and investors are somewhat impatient for more rapid changes for better governance.

Fitch has, however, subtly warned us to compare our “weak governance relative to our peers”. Thus, we have to take note of the more rapid progress made by our neighbouring countries in Asean, like Vietnam, Thailand and Indonesia and, of course, Singapore, to measure our real success in good governance.

Investors have the whole world to choose from, to put their money where their mouth is. They also need not look at the comfortable physical climate and tax incentives alone to be attracted to invest in Malaysia.

Racial harmony, religious understanding and political stability are also major considerations for both domestic and foreign investors and professionals. This is where the reduction of the brain drain is important. But we continue to have strong outflows of brain power, which is debilitating.

Fitch warns that the PH government holds only a small majority in Parliament and has seen its previously high public approval rates fall significantly. Fitch’s assessment is quite correct. This has been due to too much politicking and allegation of sex scandals. All this does not give confidence to investors and even consumers who will be dampened in their enthusiasm to increase consumption and investment.

Fitch Ratings has subtly and politely warned us of the challenges we are facing. It has also emphasised in its usual guarded fashion the essential need for us to take heed of their advice and warnings, to make the necessary socio-economic and political adjustments, changes and even transformation, without undue delays.

We could face a real slowdown all round if we don’t consolidate our strengths to overcome our lingering weaknesses to forge ahead for a better Malaysia in the future – for all Malaysians.

By Tan Sri Ramon Navaratnam, chairman of the Asli Centre for Public Policy.

Read more:

 

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Penang’s LRT project gets conditional approval from Transport Minister


GEORGE TOWN: Waves of excitement swept through Penang when the Transport Minister announced that the Bayan Lepas light rail transit (LRT) has received conditional approval.

It is seen as a move to reduce traffic congestion in the city and create a next wave of growth for the state.

The approved 29.9km Bayan Lepas LRT will bring convenience not only to the local folk but also tourists and investors, said Federation of Malaysian Manufacturers Penang chairman Datuk Dr Ooi Eng Hock.

Ooi, who is positive that the project will spur growth on the island, believes the LRT will bring in another wave of development into the state.

“The LRT will divert traffic congestion. It will attract new investments, make life easier for our workforce.

“I believe it will boost the state’s economy with another wave of growth,” he said yesterday.

Following the Transport Ministry’s conditional approval of the project, Ooi added that it is the first step for a change in landscape and behaviour of transport mode in Penang.

Yesterday, the Transport Ministry gave conditional approval to the Bayan Lepas LRT project.

Transport Minister Anthony Loke in a statement said that after a detailed study of the application by Penang Economic Planning Unit (BPEN) to develop the Bayan Lepas LRT project, approval with 30 conditions for the state to comply was given on Tuesday.

Loke said the conditions included a detailed environmental impact assessment (DEIA) approval including traffic, social and heritage assess­ments.

The state must now exhibit documents on the project for three months, and the final go ahead will only be decided after the public responses are evaluated, said Loke.

“I welcome public participation from the people, NGOs and all stakeholders in this public review.

“The relevant documents are to be exhibited in public places including government offices.

“The state government must also upload a copy of these documents on a website for online viewing.

Penang Chief Minister Chow Kon Yeow thanked the Federal Govern­ment and said the state is committed to fulfilling all requirements.

“We will wait for the official letter from Transport Ministry to proceed and initiate public viewing of the documents,” he said.

The RM8.4bil Bayan Lepas LRT together with a monorail, cable cars and water taxis, is part of the state government’s RM46bil Penang Trans­port Master Plan (PTMP).

This LRT will begin at Komtar in the northeast corner of the island and head south through Jelutong, Gelugor, Bayan Lepas and Penang Interna­tional Airport, ending at the Penang South Reclamation (PSR) development.

It is expected to provide a fast route to the airport and will traverse densely populated residential, commercial and industrial areas.

Source link 

 

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Housing woes: death spiral or virtuous cycle?


THE World Economic Forum estimates that the global cost of corruption annually is at least US$2.6 trillion (RM10.9 trillion) or 5% of global gross domestic product (GDP).

According to the World Bank, businesses and individuals pay over US$1 trillion (RM4.2 trillion) in bribes each year.

Corruption adds up to 10% of the total cost of doing business globally and up to 25% of the cost of procurement contracts in developing countries.

I gathered these shocking facts at a conference. There are other alarming statistics that shed light on the damage brought about by corruption and its dreadful impact on the economy.

Corruption leads to further impoverishment of the poor and other issues in many countries. The average income in countries with a high level of corruption is about one-third of those countries with a low level of corruption. In addition, corrupt countries have a literacy rate that is 25% lower.

The Corruption Perception Index 2018 released by Transparency International shows that on the scale of 0 to 100, where 0 is highly corrupt and 100 is very clean, over two-thirds of 180 countries score below 50, with the average score of 43.

In the index, Denmark ranked first in the world followed by New Zealand second. Finland and Singapore were tied for third with a score of 85. Malaysia was ranked 61st in the world, scoring only 47.

We were ranked the third highest in the Asean region, after Singapore and Brunei. Our country is doing better now with the ongoing investigation of the 1Malaysia Development Bhd scandal and other prominent cases.

In TI’s report, Malaysia is one of the countries on the watch with promising political developments against corruption. However, more solid action is needed in combatting all elusive forms of corruption.

According to Transparency International Malaysia, corruption had cost our country about 4% of its GDP value each year since 2013. Added together, this amounts to a high figure of some RM212.3bil since 2013. For 2017 alone, that figure was a whopping RM46.9bil!

As a comparison, our development expenditure in 2017 was RM48bil. If the value of corruption above was accurate, our development fund was almost “wiped out” because of corruption.

Transparency International Malaysia president Datuk Akhbar Satar said: “This is our estimate. It is likely to be higher in reality (on the value of corruption).”

No country can eliminate corruption completely. However, we can learn from good practices shown in some developed countries, such as the Scandinavian countries which all scored high on the Corruption Perception Index.

Corruption leads to poverty as money collected is not used for the welfare of the nation. As a result, the people end up suffering and paying for the leakage in the system.

If a country is corrupt-free, it will reduce the need for non-governmental organisations (NGOs). NGOs advocate for the rights of marginalised groups. The government can take care of those group when it has a surplus in the budget.

A clean government and system will have a positive impact on many aspects including affordable housing, one of the prominent needs of the people.

Whenever there is corruption, there is a compromise in the delivery of goods and services. The same situation applies to affordable housing.

Someone mentioned to me in the past that “the government isn’t interested in affordable housing as there is literally ‘no money’ to be made in it”!

Things have made a dramatic change for the better since May last year. Our new government is working on a platform of clean government and improving transparency. It plans to build one million affordable homes within two terms of its administration. To make this a reality, the government needs to put in real money to make it happen.

Corruption causes a death spiral that leads to various problems. Without it, a virtuous cycle grows that ensures every part runs smoothly and the marginalised in society are looked after.

With a promise of a cleaner government, we hope we will soon see a virtuous cycle that makes the one million affordable homes an achievable target.

By Datuk Alan Tong, who has over 50 years of experience in property development. He is group chairman of Bukit Kiara Properties. For feedback, please email bkp@bukitkiara.com. The views expressed here are solely that of his own.

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Parcel rent bills mailing soon


Stratified property owners given till December 31 to settle dues for 2019

Chow (second right) with (from right) Jagdeep Singh, State Land and Mines office director Akmar Omar and State Secretary Datuk Seri Farizan Darus, showing the new bills for the parcel rent in Komtar, Penang.

OWNERS of stratified properties will now have to pay parcel rent directly to their respective district and land offices.

Chief Minister Chow Kon Yeow said the billing for parcel rent, replacing quit rent, would be sent out to all parcel owners next month through their respective management corporations.

“Previously, it was paid by the respective management corporations of stratified properties.

“Since the bills will be sent out late, parcel owners are given until end of this year to pay up although the deadline is usually May 31 each year,” he told a press conference at Komtar on Friday.

Chow said the parcel rent came into effect since January this year.

He said the rates for parcel rent would be based on the size of each unit, while quit rent was based on the total plot of land which the building was built on.

“Parcel owners will need to update their addresses with the respective district and land offices when paying their parcel rent this year,” he said, adding that the parcel rent billing for next year will be sent to their addresses.

Citing an example, Chow said the total quit rent collected from a specific stratified property last year was RM28,268.

“The collection in parcel rent for the same property will be lesser at RM24,239, as it will not take into account common areas, unlike for quit rent,” he said.

State housing, town, country plan­­ning and local government committee chairman Jagdeep Singh Deo, who was also present, said the arrears for quit rent has amounted to RM65mil to date.

Parcel owners are advised to update their mailing addresses at the land and district office or online at etanah.penang.gov.my

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How to make living more affordable?


 

 

IN my previous article I asked the question, Do you earn enough to sustain your lifestyle?

The feedback received was consistent. People told me that they worry about the situation, some even wrote in to share their concern.

A reader by the name of Yap wrote me an email about his observation after reading my article.

“I always doubt how a family with a median household income can survive in KL. Based on my calculation, there is no way a family with two children can survive in KL with RM6,275 without accumulating bad debt or spending 4.5 hours to travel on the road. Housing is one of the factors, but not the only one,” he wrote in his email.

Belanjawanku, an expenditure guide launched by the Employees Provident Fund (EPF) in early March states that a married couple with two children spend about RM6,620 per month on food, transport, housing, childcare, utilities, healthcare, etc.

However, the median household income for Malaysians in 2016 was RM5,228. While the median income of M40 group (Middle 40%) was RM6,275, which means five out of 10 households in this category received RM6,275 per month or less. This is far below the RM6,620 required for a family with two children to stay in the Klang Valley.

Another alarming fact is… Belanjawanku compiles only core living expenses without including long-term financial planning tools such as education funds or investments. The actual budget constraint can be more severe if we take them into account.

The living cost in major cities is inevitably higher than in small towns or suburb areas.

As such, when we discuss housing affordability in the cities such as Kuala Lumpur and the Klang Valley, we shouldn’t impose the same benchmark of RM300,000 as everything else is more expensive in the city. Affordable housing should benchmark against the cost of living of the area.

Based on the research for Belanjawanku, even if housing was provided for free, a household of four would still need RM5,750 to sustain their lifestyle.

The transportation cost alone is RM1,040 for a family, higher than the RM870 allocated for housing.

Therefore, if a family is looking to lower their cost of living, moving to suburb areas would allow them to have a more affordable budget.

According to a news report which quoted information from brickz.my, the housing prices in KL are five times higher than in Seremban, with median housing price of RM1mil (RM940 psf) in the KL city centre, versus RM200,000 (RM210 psf) in Seremban.

Suburbs which are nearer to KL such as Klang and Shah Alam also offer attractive housing prices with a median price of RM340,000.

For families who stay in the city centre and plan to reduce their cost of living, they can consider moving to suburbs to enjoy a better quality of life, and leverage on the improved public transportation which offer hassle-free travelling from suburbs to city centre.

Although high living cost is a concern for many Malaysians, KL is ironically found to be the cheapest city to live out of the 11 major cities in Asia, according to the 2018 Wealth Report Asia.

We are “cheaper” or ranked lower than our neighbouring cities, including Bangkok, Manila and Jakarta. KL, Manila, and Jakarta are also the most price competitive cities when it comes to the residential properties segment.

Why are we still facing the challenge of high living costs despite being the “cheapest” city in the region? The underlying factor is because of the low household income earned by most Malaysians, as the previous government failed to transit us to a higher income nation.

In his email, Yap mentioned that “I always imagine what Malaysia can be if there were no leakages. Hundreds of billions could be spent to stimulate various industries. Our GDP per capita could be close to if not similar to Singapore’s”.

That is the vision and sentiment shared by a majority of Malaysians. With the new government that promises to be more transparent and efficient, we hope that one day, we can afford to live comfortably in any city we wish to, with a higher household income.

Datuk Alan Tong has over 50 years of experience in property development. He was the World President of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, please email bkp@bukitkiara.com

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Check on coming monsoon floods in Penang !


Wake-up call: The floods that hit Penang in 2017 exposed its lack of flood mitigation and disaster  preparedness.

GEORGE TOWN: The south-west monsoon season is expected to start sometime this month, prompting fears of flooding and falling trees here.

As dark clouds hang over Penang almost every morning now to herald the coming monsoon, talk of flooding in the state assembly sitting on Tuesday led to several lawmakers and the Speaker himself wanting to have a say.

“I am aware that some government agencies belittle the efforts of assemblymen who highlight flooding and other problems.

“As legislators who face the rakyat, they are carrying out their duties and I hope that the relevant agencies will take them seriously and not make fun of them,” said Speaker Datuk Law Choo Kiang during the day’s proceedings.

Lim Siew Khim (PH-Sungai Pinang) told the assembly how she and Ong Ah Teong (PH-Batu Lanchang) suffered verbal insults when visiting flood victims in Kampung Bukit Dumbar, where homes were flooded seven times, including a few days before the recent Chinese New Year.

This led to Dr Norlela Ariffin (PH-Penanti), Ong and Teh Lai Heng (PH-Komtar) to also stand up and voice their grouses.

Outside the hall, Ong said government officers handling flood problems tend to ignore the pleas of assemblymen.

“We are all in the same WhatsApp groups. When we highlight floods, they never respond,” he said.

Teh told the assembly that government officers don’t face the residents but the assemblymen bear all the insults from flood victims in their constituencies.

Dr Norlela said when she attended the monthly district meetings and called for strict enforcement to end the source of floodings such as deforestation, her pleas were often met with silence.

While the Sungai Pinang Flood Mitigation Plan – delayed for 20 years – has begun again with renewed federal funding, many are worried that the south-west monsoon will still bring back the floods this year.

Scientists Sheeba Nettukandy Chenoli and Chai Heng Lim, in a research paper published last November in the “Journal of Atmospheric and Solar-Terrestrial Physics”, found that the onset of the mid-year monsoon will be on May 19 with a standard deviation of eight days.

State Environment Committee chairman Phee Boon Poh said this was the season when rain coinciding with extra high tides fuelled by the super full moon could lead to severe flooding.

“Between May and June, strong winds stir up huge tidal waves that are not safe for small boats,” he said.

A freak storm on Sunday caused several trees to fall on Penang island, one of them in Tanjung Bungah falling on a passing car.

To keep falling trees in check, State Works Committee chairman Zairil Khir Johari said a special committee was ironing out a method to pass the care of public trees from the Public Works Department (JKR) to Penang Island City Council (MBPP).

“JKR specialises in building and caring for roads and bridges but MBPP has a full landscaping team that includes arborists.

“This team has the know-how to care for public trees and recognise diseased trees that must be felled before they become a hazard.

“We are finalising a method for MBPP’s landscapers to have island-wide jurisdiction of roadside trees and be granted access to federal grants for their maintenance,” he said.

By Arnold Loh and R. Sekaran The Star
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Penang State to study Airbnb woes before legalising operations; Using Airbnb to settle mortgages?


Airbnb, Why the New Logo?

HOW other cities worldwide tackle their Airbnb problems are being studied to see if the home-sharing business could be legalised or regulated in Penang.

The office of the Penang State Exco for Tourism Development, Arts, Culture and Heritage (Petach) is studying their policies to tackle the issue of residential home owners who rent out their units as if they were running a hotel or serviced apartment.

Its exco member Yeoh Soon Hin (pic) said the global home-sharing business was quite established in Penang now that when people buy a house or condominium unit, someone might approach them and offer to guide them to sign up with Airbnb and make money from their new property.

He told the assembly that Penang Global Tourism had met with Airbnb’s management team to discuss how to regulate the business.

“Airbnb told us that they are ready to cooperate and register Airbnb units in Penang with the local authority, but we have no laws or policies for this yet,” he said.

Yeoh said in San Francisco, Airbnb operators are limited to renting their homes to a maximum of 90 days a year.

“In Catalonia, Spain, Airbnb operators can be fined up to 30,000 Euros (RM140,000) and the unit owners fined up to 90,000 Euros (RM420,000) if there are complaints.

“In Singapore, the Urban Redevelopment Authority is proposing to limit Airbnb units to only allow up to six people each time to rent them and for only up to 90 days a year.

“For strata units, Singapore plans to allow it only if at least 80% of all unit owners in the building give consent.

“Japan enacted a law to allow home-sharing of units for only up to 180 days a year,” he said when replying a question from Daniel Gooi Zi Sen (PH-Pengkalan Kota).

Gooi said he was concerned because despite strong enforcement from Penang Island City Council since 2017 to stop residential property owners from using their units commercially, the Airbnb portal lists thousands of units in Penang.

“We cannot deny property owners from benefitting from their assets, but we also cannot let them continue to operate without paying their dues such as commercial assessment rates or the hotel fee,” he said.

Yeoh said Petach was studying how Airbnb operators are regulated while waiting for the federal government to draft laws on home-sharing.

“We raised the issue and were told that the Housing and Local Government Ministry and the Tourism, Arts and Culture Ministry are studying possible laws on this.”

Yeoh said the business was unfair to neighbours, the hotel industry and local authorities.

“They are paying assessments and utility rates for residential units but are using those units commercially while legal hotels that comply with all laws such as safety and traffic provisions pay much more.

“The peace and privacy of their neighbours are being intruded upon,” Yeoh said.

He said his team in Petach was also considering the possibility of recommending that Airbnb operators be charged double or triple the current residential assessment rates that they are paying now after they are legalised.

By arnold loh and r. sekaran at the penang state assembly

 

Should Airbnb be regulated?

MUCH has been said about Airbnb in the news of late. The Malaysian Association of Hotels (MAH) Penang branch has claimed that the emergence of Airbnb and illegal accommodation are among the main causes for Penang hotel occupancy rate to decline.

Another news report indicated that Airbnb operators are required to register with Kuala Lumpur City Hall. At this point in time, it is vital to see the concept of Airbnb. The platform was started to connect people who were looking to rent their homes to those who wanted hotel-free stay accommodation for short periods. The reason for the registration must be for the purpose of regulation by the authorities.

The claim by MAH that the emergence of Airbnb has caused hotel occupancy rates to drop must also be examined.

In terms of cleanliness and hospitality, although hotels do fit the bill, not all hotels are in that category. All hotels must be refurbished and kept clean at all times. It may be a bit too much to ask for luxury bedding or first class service, but cleanliness and pleasant service is not too difficult.

Airbnb hosts are conscious about their guests and the reviews that are given on the website. They go the extra mile, and it is not always accurate to say that Airbnb is cheaper and therefore people choose them over hotels. It is the space, the home away from home concept, and being looked after, the occasional bottle of wine left for guests, the fruit basket, the bottles of fruit juice and mineral water in the fridge — all of these go a long way in wooing guests.

In terms of protection for the hosts and the guests, Airbnb has enough protection in place. It is up to the renter to choose who they want to rent out to. Those who want to rent and those who are renting out their properties have their profiles. Reviews as to the safety of the place and its convenience — all can be seen from the website. It is a very transparent website and no one can complain that they were not aware that there was a danger or that they did not get their money’s worth. There are times that unfortunate Airbnb hosts unwittingly allow roguish guests and their premises are wrecked. The Airbnb hosts too, have a risk to take.

From the reports, it is unclear of the need for Airbnb to be registered or regulated. Hotel operators are required to register as it is a business. Airbnb is a service platform and not a business. For hosts, it is an additional income — especially for the elder population whose children have left, or even for those with university fees to pay, this additional income will be a good supplement. Unlike hotels and motels, Airbnb operators are there on a temporary basis. Sometimes, the owner may get a long-term tenant, and may not want to continue with the Airbnb concept.

Maybe we can take a leaf from countries where Airbnb has been regulated. In Los Angeles, United States, a regulation was passed for short-term rentals (vacation) with an initial cap on rentals for up to 120 days with flexibility to increase that number of days.

In New York, it is illegal to rent out an entire residence for less than 30 days. Short-term rentals are permitted if the homeowner is also staying there throughout the rental period and there are no more than two renters. This would be ideal for an elderly couple who would enjoy the company of young tourists who would in turn enjoy being in a home environment.

In Japan, anyone wanting to list their property on Airbnb will need to register with the local government, who will conduct fire and safety checks on the premises. The new regulations also limit rentals to 180 days per year.

Singapore has prohibited public housing rentals that are under six months, or three months in the case of private housing without the approval of the Urban Redevelopment Authority. In London and Paris, new laws have limited short-term rentals up to 90 days per year, and Liverpool City Council has pushed for national regulations to ensure that landlords register short-term rental properties.

Regulation is of critical importance in shaping the welfare of economies and society. Any form of regulation must work effectively and serve the public interest. Government agencies, in this case, the local councils are responsible for implementing regulatory policies and must be aimed towards protecting the consumer. When imposing such regulations on individuals, such as Airbnb hosts, there must be a goal that will help the government to achieve its purpose. The objective of a government or regulatory body is to ensure better and cheaper services and goods, and to provide a fair competition to any particular industry without encouraging a monopoly. Airbnb may be regulated and the town and city councils may want to draw up guidelines following from the examples cited above.

By GRACE XAVIER

Grace Xavier is research fellow at the Faculty of Law, Universiti Malaya and she can be reached at gracem@um.edu.my

Using Airbnb to settle mortgages

Survey: Hosting helps to repay loans, provide extra income

Video:
https://www.thestar.com.my/business/business-news/2019/07/03/md-the-cost-and-security-issue-of-airbnb/?jwsource=cl

PETALING JAYA: More Malaysians are relying on Airbnb to settle their mortgages given the property overhang that is engulfing the sector.

According to an Airbnb survey of more than 2,000 Malaysian hosts and guests, half of the Airbnb hosts said it had helped them pay for their homes while 40% said Airbnb provided a supplementary income for them to make ends meet.Malaysia is Airbnb’s fastest growing country in South-East Asia for the second consecutive year.

It saw more than 3.25 million guests in Malaysia over the past 12 months ended July 1, which translated to a 73% increase from the previous period.There are more than 53,000 Airbnb listings in the country.

Axis REIT Managers Bhd investment head and former Malaysian Institute of Estate Agents president Siva Shanker said many of the Airbnb hosts were investors and speculators who purchased the properties during the upturn, with the intention of selling them at a higher price.

“However, when the property market started to make a turn for the worse, many of these speculators found it difficult to sell or rent out their units but at the same time they needed income to service their loans,” he told StarBiz.

Siva said many of the buyers and investors had bought the units on the advice of some people with questionable skills and credentials.

“Many of the people, who claimed to be experts, gave false assurances that the properties could be sold at a premium of up to 40% within a couple of years, or that they would be able to get high rental yields.

“This is essentially a get rich quick scheme and many people believed in them. But then the market crashed and many of the buyers are saddled with a property that they can’t sell or rent out.”

Siva said many of the so-called “advisers” had rebranded themselves as Airbnb consultants when the property market slumped.

Airbnb is an online booking platform that allows people to rent out their properties or spare rooms to guests.

PPC International managing director Datuk Siders Sittampalam said the concept of Airbnb needs to be regulated.

“It’s never been regulated in the past, especially in terms of taxes. How do you determine things such as cost and security?”

Siva concurred that proper regulation need to be put in place to for Airbnb operators.

“You don’t know who’s going into your apartment. Every other day, your occupants are changing.

“They could be illegal immigrants, running criminal activities, being a nuisance and disturbing the neighbours.

“How is the unit considered ‘gated and guarded’ when the owner is the one that opens the door to these strangers?”

With no proper regulation in place, Siva said the value of the apartment will deteriorate.

“The owner is running it like a hotel, except he doesn’t have the upkeep skills of a hotelier. Within a year, the apartment will look run down. By then, new properties will be up in the market and new owners will be looking to rent them out.

“The owner of the run down apartment is going to have difficulties finding tenants, but he still needs to fulfil his monthly mortgage. Eventually, it becomes a vicious cycle. To stop this, we need to educate the public and get rid of the self-proclaimed property gurus.”

Another concern is the Airbnb having a huge impact on the local hotel industry.

According to Impiana Hotels Bhd executive director Azrin Kamaluddin, hotels that havemore than four stars will face limited to no impact from the rising popularity of Airbnb.

“The hotels offer distinct product differentiation as they provide experience and service to guests.

“What Airbnb does is offer accommodation as a commodity.

“I believe that owners of four and five star serviced residences that do not lease back their units to operators as well as hotels that are three stars and below would be disrupted by Airbnb.

“It is imperative for hotels that have three stars and below to reinvent themselves to stand out from the competition posed by Airbnb,” he said.

On the potential launch of Airbnb Luxe, Azrin said it would not have an impact on four to five-star hotels, given the relatively small volume and higher price tag of US$1,000 per night.

Siders concurred that Airbnb would only have an adverse impact on budget hotels.

“The four-star and five-star hotels offer different types of services and amenities.”

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Do you earn enough to sustain your lifestyle?


DO you know how much you need to sustain your lifestyle every month? Are you living within your budget or stretching to make ends meet?

We can now gain insights with the unveiling of Belanjawanku, an Expenditure Guide for Malaysian Individuals and Families, launched by the Employees Provident Fund (EPF) in early March.

The guide offers an idea of the living costs for respective household categories. It encompasses the expenditure on basic needs and involvement in society for a reasonable standard of living in the Klang Valley.

According to Belanjawanku, a married couple with two children spend about RM6,620 per month on food, transport, housing, childcare, utilities, healthcare, personal care, annual expenses, savings, social participation and discretionary expenses.

When I read this guide together with the income statistics published by the Statistics Department, it reveals that a vast majority of Malaysians can’t afford to live in the Klang Valley.

Based on the statistics, the median household income for Malaysian households in 2016 is RM5,228, far below the RM6,620 required for a family with two children to stay in the Klang Valley.

If we take a closer look, the median income of M40 group (Middle 40%) is RM6,275, which means five out of 10 households in this category received RM6,275 per month or less. This indicates that over 60% (40% from B40 households and half of the M40 households) of Malaysian households (if they have two children) can’t afford to stay in the Klang Valley.

What went wrong in the process? Why are many households having challenges to meet the required budget?

According to Belanjawanku, a married couple with two children spent the majority of their income on food (RM1,550), followed by childcare (RM1,150) and transport (RM1,040), then only on housing (RM870) and other items.

Based on the research, even if housing was provided for free, a household of four would still need RM5,750 to sustain their lifestyle. Therefore, the common perception that only housing is expensive is not right. It is not that housing is expensive, but that everything is expensive because of inflation over the years! The value of our currency has fallen due to global money printing measures over the past decade.

Belanjawanku compiles only core living expenses without luxury items or excessive spending. It also doesn’t include long-term financial planning tools such as funds for education or investments. If the majority of Malaysian households have challenges in meeting the existing expenses listed in the guide, it poses a serious concern on their future financial prospects.

The underlying factor of this challenge is the low household income earned by Malaysians. The previous government failed to move us to a high income nation as they had promised, and more families are stretching to make ends meet now. It may lead to serious financial problems in the future.

If median household incomes don’t increase, the B40 (Bottom 40%) and half of the M40 will always struggle even if housing is free, assuming that they aspire to have two children and to live in the Klang Valley.

According to Transparency International Malaysia, corruption had cost our country about 4% of its gross domestic product (GDP) value each year since 2013. Added together, this amounts to a high figure of some RM212.3bil since 2013. For 2017 alone, that figure was a whopping RM46.9bil!

Imagine what we can do with these monies if there was no leakage in the system? The previous government should have channeled the money to stimulate economic growth and increase the income of the rakyat.

Going forward, I am optimistic that the new government, with its promise of a clean and transparent government, can finally fix the leakage and focus on generating a higher income level for all Malaysian households.

Financial independence is a key factor in the overall well being of the rakyat. We need to increase household incomes to a level where families can meet their basic needs and embark on long-term financial planning, to elevate their quality of life.

Then, and only then, will housing and other living expenses finally become affordable.

By

Food for thought By Alan Tong

Datuk Alan Tong has over 50 years of experience in property development. He is the group chairman of Bukit Kiara Properties. For feedback, email bkp@bukitkiara.com



 

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