Budget 2013 smartphone rebate: A stupid thing to do

  • RM200 rebate for smartphones for those between 21 to 30 years of age is a waste of tax-payer money
  • The RM300 million allocated would have been a huge boost to the tech ecosystem via a seed venture fund

Budget 2013 smartphone rebate: A stupid thing to doIF you need further proof that even very smart people can do stupid things, look no further than the Budget 2013 proposal allocating RM300 million (US$98 million) for a RM200 (US$65) rebate for youths aged 21 to 30 to go towards the purchase of a 3G smartphone.  (YTL Communications Bhd will not be too happy about this as their 4G phone is left out.)
Prime Minister Datuk Seri Najib Tun Razak, in announcing the proposal, said it is designed to “enable the youths to access the information highway.”
According to the people I speak to, this is a lame election ploy. I think so too, especially with the age bracket. It will cost taxpayers RM300 million. Funds that should instead have gone to creating a seed venture capital fund that Cradle Fund Sdn Bhd is championing. Betting RM300 million on entrepreneurs, the real engine of the economy, will create untold times multiplier effects including jobs and a strong optimism of the future among our youth (the Commonwealth Youth Program defines youth as those aged between 18 and 35). It could even be the seeding ground for a global champion to emerge.
But throwing the money away on a subsidy creates zero value, zero multiplier, zero global champions. It reinforces the habit of looking to government for yet more zero value creating subsidies. As someone who wants to see Malaysians stand tall and rise high on the regional and global ICT stage, this really angers me.
Especially when I know that Cradle would have done wonders with this money for its seed venture plan. What a huge shot that would have been for our ecosystem, versus the 1.5 million youth who will have forgotten about the rebate by the next week. And, by the way, I can tell you now that we do not have 1.5 million youth within that age bracket who qualify as a fair number in their late 20s, especially in the tech space, will likely be earning above RM3,000.
Worse, there is no guarantee that youths will subscribe to a data package for their “information highway” device. For it is only when a phone is connected to the Internet that it can be truly “smart.” Sure, Najib did mention that a special package will be introduced with the cooperation between the Malaysian Communications and Multimedia Commission and the telecommunications companies. There could be a data element involved but I am hazarding a guess that this would not prove popular as the headlines are all about a RM200 rebate per smartphone.
Nor will our mobile app developers benefit from this. No MSC Malaysia Integrated Content Development Programme (ICON) recipient is jumping for joy. Nor did Multimedia Development Corporation (MDeC) make mention of this announcement in its post-budget comments, which were mostly positive.
And even youths in the target market of this subsidy are not wholeheartedly welcoming it. Malay language tech portal http://amanz.my highlighted this to its mainly youth and university audience and there was a fair amount of skepticism in the comments to the news.
The comment I liked was one requesting a lowering of Streamyx charges further. Fortunately for Telekom Malaysia Bhd, it dodged that bullet to its bottom-line. But we taxpayers are taking one straight between the eyes.
I hope Digital News Asia readers don't take this lying down and make their displeasure known to their Member of Parliament. That is the least we can and should do.
I am not asking much from the Government in terms of further funding for the ICT sector, but I do demand that it consistently does the smart and right thing to boost our tech ecosystem. This smartphone thing is plain stupid.
Related Stories:
Point: Budget 2013 -- time to get on with IT!
Counterpoint: Budget 2013 treats ICT industry as a step-child
Malaysia’s Budget lauded amid caution on implementation
Industry generally upbeat about Budget 2013
Budget 2013 boost for angels and IP monetization

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