The last thing Penangites need is to be burdened by increased rates

LETTER | Penang’s two local councils, the MBPP and MBSP, have increased the assessment rates of a total of 322,549 and 327,401 properties on the island and Seberang Perai respectively. The reasons given for this move is that the local councils had not reviewed the rates for the past 15 years and that they have been experiencing an annual deficit since 2016.

It was reported that as in April 2019 there were 54,792 ratepayers who owed MBPP RM58,332,933 in the first half of the year. We urge the local councils to take effective action to collect the large amount of assessment arrears. The collection of such arrears is important because, as it is in this case, the amount owed to the MBPP is staggering and this is just the first half of the year.

Raising the assessment for all at this juncture is a bad decision considering the economic situation and that half of the country’s working population is earning less than RM2,000. As such we would recommend that the assessment rate of those in the B40 group to remain at the status quo.

The MBPP must stop wasteful projects. It announced the plan to implement 31 infrastructure projects between 2020 and 2022 costing RM179.03 million. On the other hand, the MPSP will be implementing 46 projects within the same period, costing RM169.74 million. The assessment rate collection will be used to finance the projects by the two local councils. The local councils do not need to spend RM348.77 million on projects not needed at the expense of ratepayers, particularly those from the B40.

Among the projects earmarked for 2020 are the installation of 100 new CCTV cameras and the maintenance of the existing ones at a cost of RM11.36 million. One other example of such wasteful projects is the proposed RM30 million underground tunnel project stretching from the middle of Mount Erskine Road to Adventist Hospital in Burmah Road

It would be inaccurate to say that the government had not reviewed assessment rates for the past 15 years because there was an increase in 2015, albeit an increase of between 7.5 and 8.5 percent for apartments and between 8.3 and 9.3 percent for landed properties. During that time, low-medium (LMC) and low-cost (LC) housing had an increase of 0.5 percent which is less than RM10.

Assessment is supposed to be reviewed every five years but the rate does not need to be as steep as 70 percent in some cases. This is in contradiction with what had been said that there will be “minimal impact to about 75 percent of ratepayers who only need to pay below RM100 annually” and that those in the lower-income group “would only need to pay a few additional ringgit”. 

For the government to use this steep increase for partial funding of development projects is truly insensitive to the economic reality of the people. Such a drastic increase will impact the poor and the retirees most.

Assessment rates increase should be higher for unoccupied premises to curb property speculation whereas it should be lower if the owner is staying there. A reduced assessment rate for owner-occupied premises (Owner Occupied Concession) was practised until about two decades ago when it was discontinued. Moreover, if there is a reduced increase in assessment rates for occupied premises it will encourage property owners to lower their rental to keep their premises rented out.

Our other concern lies with the voiceless poor and less-educated who own low-cost flats or an affordable housing unit. These are the people who are least likely to appeal although been asked to do so before Oct 14. Therefore, we urge the government to consider all factors before going on a spending spree in the name of development in uncertain times like these.

The writer is president, Consumers Association of Penang (CAP).

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.