City Hall needs to justify hike in assessment charges BY MAKING A POINT JAGDEV SINGH SIDHU

by **Cals** Sun 17 Nov 2013, 21:26

Published: Saturday November 16, 2013 MYT 12:00:00 AM
Updated: Saturday November 16, 2013 MYT 8:51:35 AM
City Hall needs to justify hike in assessment charges
BY MAKING A POINT JAGDEV SINGH SIDHU

I was in Melbourne recently and while there for five days, I realised why it’s a city ranked as the most liveable in the world. From a dipstick perspective, everything works. It was clean, free from congestion and generally appears to be a very pleasant city to live and work in.
Upon returning from Down Under and back home in Kuala Lumpur, I read with great interest about the proposed hike in assessment charges by City Hall.
Checking with a couple of colleagues, they told me they have received letters from Kuala Lumpur City Hall informing them on the proposed new assessment charges. I am waiting for mine.
One said her assessment charges will double, while another said his would go up by about 40%. Businesses too are expected to pay more in assessment charges.
The reason for the proposed rise in assessment charges is because of the steep spike in property prices in the city over the years. The Federal Territories Minister when defending the move to raise assessment charges, echoed that. The last hike in assessment charges was 21 years ago. Although the hike is not final and subject to feedback from residents, its implication on city folks will be telling.
The higher tax comes at a point when costs are going up. Subsidies are being cut, petrol prices have gone up, food is more expensive and Malaysians might soon see electricity tariffs go up.
And it’s not as if the economy is booming, It grew a healthy 5% in the third quarter but I doubt it’s helping wages of many to exceed the rise in the cost of living. For businesses, their operating costs too has gone up and if they are unable to pass on the cost increases, then margins will dip.
Should the proposed higher assessment stay, I feel that the reason for bumping up assessment rates by such a degree should be better justified and communicated, especially in light of how costly things are.
Higher property prices should not be the underlying reason for the higher charges. People are paying assessment charges for the upkeep of the city and higher property prices does not influence that in anyway. The cost to plug potholes and maintain public facilities are not indexed to property prices.
The assessment receipts by City Hall are used for a number of things, which from its website include the construction and maintenance of public facilities such as community halls, public toilets, bus stops, children’s playground, leisure and others; cleaning of residential areas, businesses, factories, parks and public places; construction and maintenance of infrastructure such as roads, drains, ditches and so forth and; provision and maintenance of street lights.
The money is also used for the development of Kuala Lumpur.
Yes, it’s understandable that the cost of providing such services and for the development of Kuala Lumpur is much more than it was all those years ago. I also assume City Hall managed to defray imposing higher charges because it has it funded its expenses from the general growth of businesses and homes in Kuala Lumpur.
Although the City Hall, according to its 2013 Budget, is on an operating surplus, its overall budget will dip into a deficit as it spends more on developing the capital.
There are a host of projects that are underway under the Greater Kuala Lumpur/Klang Valley Economic Transformation Programme (ETP). That ETP is the most lucrative as the Klang Valley’s contribution to the overall economy is huge.
With plans to now propel Kuala Lumpur up the ranking of most liveable cities from number 77, according to The Economist’s poll, to number 20 by 2020, a lot needs to be done. And that involves money. Programmes will need funding and maybe that’s why City Hall is proposing a big bump in assessment charges.
Maybe more clarity will be revealed when the City Hall announces its 2014 Budget. For a start, it needs to review just how much it spends on contractors to carry out the work it is responsible for. The must be some level of oversight and ways to see if it can get more bang for the ringgit than what it currently receives.
When announcing its latest budget, City Hall should also tell what they are going to spend their money on and in greater detail. If people are going to end up paying more for the upkeep and the development of the city, then they must also be informed where that money is going.
It’s reported that City Hall plans to spend more on social programmes in 2014, and programmes to help city residents will be beneficial. In fact, spending money to catapult Kuala Lumpur up the liveable city ranking will be better services and upkeep of the city. If residents can see tangible improvements in the look and feel of Kuala Lumpur, then the pain of paying more can be soothed somewhat.
The last thing anyone will want is for City Hall to collect more money and see much of the same old ways being maintained. It’s time for City Hall to really get value for its expenses.

Business editor (features) Jagdev Singh Sidhu doesn’t mind paying more in assessments if there is going to be a better return on his cost. Plus plant more trees and keep whatever open spaces there is left.