It is generally agreed that 'laissez faire' or the doctrine that government should not interfere in commercial affairs should be followed wherever possible.
But in trying to compete with Pakatan's proposal on how they would reduce car prices, Mustapha Mohamed seems to side-step what are within his control (excise duty and sales tax), and expect more from manufacturers' productivity and profit margins.
'In trying to reduce car prices, its better for the government to manage the variables it has complete control such as excise and sales tax. It’s the government who imposes these and not the private sector. Its better for the government to mind its own business.'
'...The 4 elements that go into the pricing of a car are the cost ex-factory, profit margin, excise duty and sales tax. Mustapha went on lecturing on how improving the productivity the manufacturer reduces unit cost and hence can offer a reduction in car pricing.'
'It’s a common flaw that runs through the entire gamut of BN government economic thinking. The same principle or thinking as it were underlined much of the overrated government’s ETP. The thinking is this: this government thinks it can generate economic progress by way of centralised planning. To do it must exercise complete direction over the affairs of economic agents.
Herein lies the fundamental flaw. Having wedded itself to the idea of centralised planning, it seeks to control variables outside its own area of competence.
Consider the attempt to reduce the car price. The 4 elements that Mustapha mentioned were (1) ex-factory price (2) profit margin (3) excise tax and (4) sales tax. All these cost elements are variables if and only if one party gets to control all. The government can’t control ex-factory price and profit margins, short of giving decrees. '
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But in trying to compete with Pakatan's proposal on how they would reduce car prices, Mustapha Mohamed seems to side-step what are within his control (excise duty and sales tax), and expect more from manufacturers' productivity and profit margins.
'In trying to reduce car prices, its better for the government to manage the variables it has complete control such as excise and sales tax. It’s the government who imposes these and not the private sector. Its better for the government to mind its own business.'
'...The 4 elements that go into the pricing of a car are the cost ex-factory, profit margin, excise duty and sales tax. Mustapha went on lecturing on how improving the productivity the manufacturer reduces unit cost and hence can offer a reduction in car pricing.'
'It’s a common flaw that runs through the entire gamut of BN government economic thinking. The same principle or thinking as it were underlined much of the overrated government’s ETP. The thinking is this: this government thinks it can generate economic progress by way of centralised planning. To do it must exercise complete direction over the affairs of economic agents.
Herein lies the fundamental flaw. Having wedded itself to the idea of centralised planning, it seeks to control variables outside its own area of competence.
Consider the attempt to reduce the car price. The 4 elements that Mustapha mentioned were (1) ex-factory price (2) profit margin (3) excise tax and (4) sales tax. All these cost elements are variables if and only if one party gets to control all. The government can’t control ex-factory price and profit margins, short of giving decrees. '
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