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 for the past 15 years and that they are 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 having considered 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 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, 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 rate payers, particularly those from B40s.
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% 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% 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% in some cases. This is in contradiction of what had been said that there will be “minimal impact to about 75 per cent of ratepayers, who only needed 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 the steep increase for partial funding of development projects is truly insensitive to the economic reality of the people. Such drastic increase will impact the poor and the retirees most.
Assessment rate 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 practiced 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 owns a 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 14 October 2019. Therefore, we urge the government to consider all factors before going on a spending spree in the name of development in uncertain times like this.
Press Statement, 7 October 2019