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Thursday September 13, 2007

Sordid stories from the audit

ALONG THE WATCHTOWER
By M.VEERA PANDIYAN


It is pointless to publish yearly Auditor-General reports if crooks are not brought to book

JOHN Maynard Keynes was so right. The avoidance of taxes is the only intellectual pursuit that carries any reward. The English economist’s observation always comes to mind when the dreaded tax return forms arrive.

But when the Inland Revenue Board’s envelop is delivered next year, I’m more likely to remember this quote: People will think of creative ways to avoid paying taxes because they are fed-up with the mismanagement of public funds.

The sentiment expressed by Tan Sri Ramon Navaratnam, president of Transparency International Malaysia last week couldn’t have been any more sensible.

If our taxpayers can diligently pay their dues, albeit largely out of fear of being punished with higher penalties or ending up in jail, why don’t those entrusted with spending the money fear the repercussions of wrongdoing and corruption?

The mismanagement of public funds is indeed becoming more appalling – like inflating the price of a screwdriver set from RM32 to RM224, paying RM1,146 for a RM160 pen or RM5,700 for a RM50 carjack, as exposed in the 2006 Auditor-General Report.

Among the other shocking fiscal imbroglios uncovered was the RM290mil spent by the Customs Department for an outdated, user-unfriendly information system.

The department is in the process of replacing it with a new information technology plan, which is estimated to cost RM451.3mil.

As for the police air wing, it bought two helicopters worth RM117.75mil but couldn't use them because they did not meet specifications. Before that, RM15.37mil had already been spent on training pilots to fly the choppers.

Another deplorable matter highlighted in the A-G’s report was the revelation that ambulances were found to be hazardous to the patients they were supposed to ferry.

Vital medical equipment such as cardiac monitors and portable ventilators were dysfunctional in the vehicles, which were also apparently used to transport workers and even food.

Reacting to the report, Navaratnam warned that the time could come when Malaysians might think of ways to avoid paying taxes because they were no longer convinced the money would be put to good use as pledged by the administration.

Many people would beg to differ, Tan Sri. They already feel that such a time has already come. There is no need for a mother-of-all A-G’s report tallying the total cost of overpriced goods and services, unauthorised payments, wasted equipment, shoddy implementation of projects and money given as kickbacks to convince them.

In the past, the corrupt few were careful not to show off their ill-gotten gains out of fear of being caught. There are more people committing such crimes today and they no longer fear of being punished, never mind their lack of shame.

These people don’t care a damn about flaunting their riches, even when it is obvious that their salaries or legal incomes don’t match their lifestyles.

A-G’s reports are tabled in Parliament without fail each year but how many of those named for mismanagement have been taken to court so far? What is the point of audits if the crooks get away most of the time?

Real change can only come through perspicuous political commitment. To quote Transparency International, ending the pettier forms of corruption in the bureaucracy is almost impossible if grand political corruption persists.

Reform of the public procurement system depends on political will to disclose spending, upgrade accounting standards and monitoring, along with improved access to information.

Let’s look at how Malaysia has fared in nation management over the past decade. Based on the World Bank’s Worldwide Governance Indicators 1996-2006 Report released last week, the results are rather drab.

We have fallen back in five out of the six yardsticks used, only recovering marginally in the category of Government Effectiveness, which covers the quality of public services and the civil service. In 1996, Malaysia’s marks stood at 79.6 %. In 2006, we scaled a point up to 80.6 %.

Scores have slid in the other key categories of Voice and Accountability, Political Stability and Absence of Violence, Regulatory Quality, Rule of Law, and Control of Corruption.

In Voice and Accountability, which gauges how citizens are involved in choosing their government, their freedom of expression, association and media, Malaysia was only at 38%, lower than the 39.2 % recorded 10 years earlier.

As for Political Stability, we only managed to get 58.7%, sinking from 65.4% set in 1996. It was the same state for the category of Regulatory Quality – 69.8% compared to 80% in 1996.

In Rule of Law, Malaysia recorded 65.7% for the third consecutive year, way below the 71% scored in 1996. Similarly, for Control of Corruption, the country has fallen behind at 68%, much poorer than the 73.3% scored 10 years earlier.

At the time of our independence in 1957, Stanford psychologist Leon Festinger came out with his famous theory of cognitive dissonance, which describes the unease experienced when actions are not aligned with beliefs.

For example, if people consistently fail to do what they know is right or keep doing what they know is wrong, they would experience cognitive dissonance.

But in most cases, they cannot accept the feeling. Instead of correcting the behaviour, they would repress or deny the feelings, rationalise them, justify their actions or start believing that the problem does not exist.

It’s a rather taxing thought but I hope that those who govern us are not in such a state of mind.

  • M. Veera Pandiyan, Deputy Editor, New Media, is among the taxpayers who are hoping to get some refunds by December.

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