Friday, July 30, 2010

7% Bumiputera discount for high-end property should go

My colleague Tony Pua, Member of Parliament for Petaling Jaya Utara, said during Selangor State Government Budget Dialogue that the state government should reconsider its decision of allowing discount of up to seven percents to Bumiputera property purchasers, that the discount should be abolished for purchasing residential property of more than RM500,000 and commercial property of more than RM2 million.
Unfortunately mainstream Malay newspapers had twisted his words. UMNO leaders even misled the public that DAP is suggesting the full abolishment of discount for Bumiputera property purchasers.
This is untrue as the reason why such discount should be abolished is it goes against the policy of affirmative action when such discount does not benefit low-income Bumiputeras while stiffening the competitiveness of local property market.
Such discount is meant to encourage Bumiputera property ownership, especially house ownership for Bumiputera community as most of the under-privileged Bumiputeras live in rented property and could not afford to own their own houses.
We must also acknowledge that high-income Bumiputera purchasers who can afford such expensive properties are financially sound, independent and competitive. Thus they do not need such discount.
If we are suggesting that such discount should continue, are we suggesting that rich Malays like Tan Sri Syed Mokhtar, Tan Sri Rozali Ismail or Dato’ Seri Nazir Tun Razak, who earn six-figure or seven-figure monthly income, also qualify for the seven percents discount whenever they buy any residential property above RM500,000 or commercial property above RM2 million, even though they afford to pay the market price?
I further suggest that Bumiputeras who purchase residential property below RM500,000 and commercial property below RM2 million merely for investment purpose and not for own usage should not be given any discount as any discount given will be seen as an act of rent-seeking.
The responsibility of the government is not to help the rich Bumiputera to become richer by giving them more discounts but to ensure that the under-privileged Bumiputeras can own their dream house.

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