3 Tighter Rules for Property Sector? (Sept 2013)

Prior to Budget 2014 (to be tabled next month), speculation has rift up on a few proposal to tighten the rules, especially on property sector. Following the outcry from public stating the alarming high property prices, measure should be taken to tackle the issue before bubble was formed.

The Bubbling Biz...

Among the measures being proposed were:

1. Non-other than Real Property Gain Tax (RPGT)
   
   
   
   
2. Higher Stamp Duty:
   ~ 5% of purchase price for 3rd property
   ~ 7.5% for 4th property
   ~ 10% for 5th property onward
   
   
3. Loan-to-Value ratio reduce to 60% for 3rd property onward
   
   

While the above info need to be ascertained further, some banks already implemented their in-house ruling. What's that? It was to limit the maximum term for refinancing of property to 10 years. Yes. Sooner or later, all of the banks will follow.

* Please note that the above 3 rules need to be ascertained further. Stay tune!

[Property] 3 Critical Factors to Watch Out by Year End (July 2013)

Ever since the property boom started in 2009, right after the global financial crisis, investors were laughing to the bank. But, can these sustain until next year? Many analysts doubt so. Why?

The most crucial determining factors might uncover itself in the next few months, approaching year end. In short, we have summed out to the below 3 critical factors:

1. Banning of DIBS
   This is not a secret anymore. Speculation rife up recently, saying that BNM may ban the Developer Interest Bearing Scheme (DIBS) by year end. BNM is studying the implications of DIBS which benefiting speculators more than serious buyers. Note: Singapore already banned such scheme few years back.
   
   
2. Interest Rate hike
   BNM also may revised the Overnight Policy Rate (OPR), which determine the cost of financing in the country including Base Lending Rate (BLR) for mortgage loan. A 25 basis points hike was expected. This will affect all type of loans, except fixed interest loans. Let's get prepare for higher monthly loan installment amount.
   
   
3. Higher RPGT
   Coming this 2014 budget to be tabled on 25th Oct, watch out for higher Real Property Gain Tax (RPGT). Currently, it was 15% for first two years and 10% for disposal from 3rd year to 5th year. Note: RPGT was much higher before 2008.

In our view, once DIBS was banned, developer no need to bear the interest, financier no need to bear the risk, new launching properties should be selling at lower price. Then, this is bad news for existing property, especially bought under DIBS before?

Example, phase one selling at RM500k under DIBS, phase two selling at RM500k without DIBS. No effect?

Think again... More supply now releasing for secondary market, assuming phase two also selling at same price, which is very good already. Right?

What is US "Fiscal Cliff" actually?

When everyone thought that US and the world will be better if Obama won his presidential re-election again, world equities markets today declines with US being the most serious market by dropping more than 2%. What's the reason? Answer: Fiscal Cliff ?

Hmmm... Then, what is fiscal cliff actually which many of us on the street do not even heard about this new term before. No worry, Finance Malaysia blog did his homework over here. Share this out if you like.

Understanding Fiscal Cliff...

The US fiscal cliff refers to the effect of a series of enacted legislation which, if unchanged, will result in tax increases, spending cuts, and a corresponding reduction in the budget deficit. With Obama retaining the presidency, it sends the signal that it's US government policies will pretty much stay the same as previous 4 years. Ben Bernanke will stay as Fed chairman, which also meaning that the open-ended liquidity and bond buying programs will continue, fueling risk taking appetite of equity and fixed income markets for the foreseeable future.

Budget deficits, projected through 2022. The "CBO Baseline" shows the effects of the fiscal cliff under current law. The "Alternative Scenario" represents what would happen if Congress extends the Bush tax cuts and repeals the Budget Control Act-mandated spending reductions beyond the end of 2012.

However, Obama has to resume his duties in a very likely divided congress, with Republicans controlling the House and Democrats controlling the Senate. With this political deadlock and the looming "Fiscal Cliff", that's the reason why US market sink this morning.

Good or Bad?

If you understand it, the so called "Fiscal Cliff" is not something bad, in which its purpose is to reduce budget deficit of US. What investors worried was the measures being taken will slow the already slow growth rate of US economy, subsequently the world economies including Asia. But, without the intention of reducing budget deficit of US, would you be more confident? Of course NOT, because US would never able to not walk out from the brushes. Right?

By now, you should be able to understand the term. Meanwhile, some analysts have argued that "fiscal slope" or "fiscal hill" would be more appropriate because while the cumulative economic effect over all would be substantial, it would not be felt immediately but rather gradually as the weeks and months went by. Hahaha...

Budget 2013: What's the view by Foreign research houses?

Hmmm... Yup, the title is correct. We at Finance Malaysia blog would like to hear the views from Foreign analysts only this time. Why? Because they tend to be more independent (we think), and we know that readers like you can easily access to local research reports. So, we made the decision to only show you what is written by foreign analysts as below:

Phillip Capital Management: An earnest & all-around Budget?

"People’s livelihood, affordable housing and tax issues topped the pre-budget wish lists. Weeks before the announcement, there were many discussions about the Budget 2013 in the media and various conjectures about the budget outcome. Everybody in town was anxiously waiting for the Prime Minister’s speech to reveal the Budget 2013, hoping the wish in one’s heart and mind will come true. TV camera shots have shown that people have been in high spirits cheering for the Santa Claus during the speech. We think Barisan Nasional has successfully drawn up the budget that appears to benefit the majority of people especially the middle-income segment just to keep in voters’ good graces.

However, off the radar of the camera shots, people are debating about the fiscal deficit that has been running for the 15th straight year and the high level of government debts which is approaching 55% to GDP. People expect their money to be used more efficiently to improving the competitive landscape, cutting wastage and leakage, commitment towards more R&D. Although Budget 2013 will bring down the fiscal deficit to 4% of GDP and disclosed that the deficit will continue to narrow to 3% by 2015, people still question if the budget is drafted in earnest. Only time will tell!

Overall, we think there is no big surprise from the Budget 2013 and will not have big impact to the market. However, there are some sectors that will benefit and should get some boosts from the budget such as consumer, construction and oil & gas."

UOB Kay Hian: Reining In Spending...

"The market-neutral Budget 2013 again reaches out to the lower to lower-middle income segments with cash handouts and a cut in tax rates, but reins in the overall deficit with marginally lower government expenditure. Highlights include the establishment of business trusts, a modest real property gain tax (RPGT) hike, and incentives for the oil & gas (O&G) sector. Potential winners are beneficiaries of business trust structures that enable cash distributions, such as BToto and DiGi, selected consumer stocks, particularly BAT (no duty hike), as well as micro-lending institutions like RCE and MBSB, while minor losers are high-end property developers due to modest RPGT rate hikes.

Promoting the establishment of business trusts... A key proposal of Budget 2013 is the establishment of business trusts which add vitality to the capital market (hence making Bursa a minor beneficiary), but more importantly allow a handful of local companies to optimise their capital structure and distribute surplus cash. Potential beneficiaries are cash flow-rich companies with suboptimal capital structures (cash-rich or under-leveraged) that are constrained by a lack of shareholder reserves.

…and O&G investments, which include a 10-year 100% Investment Tax Allowance for investments in refinery activities with regard to petroleum products, and an enhanced 100% income tax exemption on statutory income for the first three years of operations for liquefied natural gas (LNG) trading companies under the Global Incentive for Trading (GIFT) programme.

Strategy: We continue to advocate a defensive strategy amid a peakish market, cautious external outlook and a potentially early general election (GE13). Thematically, we like:

1. beneficiaries of business trust creation,
2. in the O&G sector, beneficiaries of rising exploration and production (E&P) activities, such as Perisai, and significant property owners at Pengerang, and
3. selected beneficiaries in various iconic government developments – Iskandar Malaysia and Tun Razak Exchange (TRX).

Our key top picks are BToto, DiGi, Gamuda and SapuraKencana. Smaller-cap favourites include MPHB, Perisai, Top Glove and Tradewinds Plantation while MRCB is a key situational stock. Meanwhile, we have upgraded BAT to HOLD (target price raised to RM57.70 from RM49.00) as we now foresee a rising momentum in volume recovery without a duty hike."

Budget 2013: Election or Rakyat centric?

General election is around the corner. External environment was not so promising, following the no ending of European debt crisis, world economic slowdown, and recent tension between China and Japan. I believe all of these would be some key factors being taking into consideration to formulate the Malaysia Budget 2013.

Goodies? Bonus? Cash handout?

Themed as "Prospering The Nation, Enhancing Well-Being of the Rakyat: A Promise Fulfilled". Our prime minister, who is also Finance Minister, tabled the 2013 Budget at Dewan Rakyat yesterday. Over here, Finance Malaysia blog would only touches on some key points:

• Economic growth projected to expand between 4.5% - 5.5%
• Federal Government's revenue in 2013 is estimated to increase to RM208.6 billion
• Continuation of BR1M of RM500 to households earning not more than RM3,000 a month and also extended the aid to cover a payment of RM250 for single unmarried individuals aged 21 and above, earnings not more than RM2,000 a month
• RM 16 million a year group insurance scheme for registered hawkers and small businesses for coverage of up to RM5,000
• FM: Once again goodies were dished out to created a feel-good factor for govt and we doubted whether Msia could achieves the 4% budget deficit target in 2013. Anyway, govt could still succeed by increasing the revenue by using these goodies. How? Very simple, that's to entice the non-registered self-employed and businesses to registered so that they are accountable for their earnings.

Spurring retail bond/sukuk market:

• DanaInfra Nasional Bhd to issue retail bonds worth RM300million by end-2012 to finance MRT development projects
• Additional expenses incurred in issuance of retail bonds and retail sukuk to be given double deduction for a period of 4 years from YA2012 to YA2015
• Individuals investors given stamp duty exemption on instruments relating to transactions of retail bonds and retail sukuk
• FM: It's very clear and straight forward that the govt want to see the soon-to-be launched retail bond/sukuk market to prosper, thus, attracting more foreign funds to the country to make it more vibrant and liquid.

Youth-centric offers:

• A one-off rebate of RM200 for the purchase of one unit of 3G smartphone from authorized dealers for youths aged between 21 to 30 years old with monthly income of RM3,000 and below.
• PTPTN loans: 20% discount for full repayment of loan; 10% discount for regular repayment.
• RM250 1Malaysia book voucher for students studying at institutions of higher learning
• FM: It seems too good to be true for PTPTN borrowers. But, it was attractive for probably 1% of them only. Why? We must remember that they borrow because they doesn't have money in the first place, not because they want to leverage. Do you get my meaning? Or, does govt scared if opposition coalition will void all outstanding loans if they took over?

Addressing the skyrocketing property prices:

• RM500 million by PR1MA to build 80,000 houses in major locations nationwide with selling price ranging between RM100,000 and RM400,000 per unit. Among the locations are KL, Shah Alam, JB, Seremban and Kuantan.
• MyFirst Home Scheme will be enhanced by increasing the income limit for individual loans from RM3,000 to RM5,000 per month or joint loans of husband and wife of up to RM10,000 per month.
• Real Property Gains Tax (RPGT) for properties disposed within 2 years will be taxed at 15% (up from 10%) and 10% for between 3rd to 5th year (up from 5%), whereas other term remained unchanged.
• FM: For us, we think that 15% RPGT is still too low if compared to pre-2007, where RPGT for first 2 years disposal was as high as 30% and 25%. Meanwhile, MyFirst Home Scheme was very tough to get it, as far as we concerned. Once again, good luck to those potential property buyers.

Changes to personal income tax:

• Individual income tax rate to be reduced by 1% for each grouped annual income tax exceeding RM2,500 and RM50,000.
• Tax relief on children's higher education scheme (SPNN) increased to RM6,000 per person (from RM4,000 previously).
• FM: The 1% tax reduction seems more effective to help out those mid-income earners, although it's not much. However, we are disappointed once again for the unchanged REITs withholding tax structure which makes M-REITs less attractive compared to regional REITs.

Government servants is the BIG winner AGAIN!!!

• Minimum pension to be increased to RM820 for those who had served the govt for at least 25 years. More than 50,000 pensioners benefited.
• 1.5 months bonus for civil servants.
• FM: Well... Nothing much we can say about it. This is a govt budget. What's wrong if govt servants being the beneficiary? But, should it be again and again? Hmmm...

"Stocks-to-watch" for the coming Monday:

• Genting, GENM, JTI, BAT on the surprise unchanged sin taxes
• Construction companies on the River of Life projects, EPP projects and schools upgrade
• Consumer related players on the expected extra spending by govt servants with bonuses
• Low cost housing developers (etc. Hua Yang) for possible contracts by PR1MA
• Financial institutions with investment banking arm for the launching of retail bond/sukuk market

Budget 2012: Another interesting debate --- RPGT

Property prices had been skyrocketing since 2009, creating more millionaires in Malaysia. The key factors behind the increasing properties prices were low interest-rate environment, attractive housing loan packages and ample of liquidity in financial system. These had prompt investors ,and general public too, to invest into properties searching for better return among all the investment instruments. Oppss... Favorable Real Property Gain Tax (RPGT) is one of the factor too.

While creating millionaires, many middle and low income groups are facing difficulties to come out the higher capital required to purchase their homes. Genuine buyers, who are first-time house buyers, were being forced to delay their buying and ended up renting. This will resulted in widening wealth gaps between Malaysians. As such, government had proposed to increase the quantum of RPGT to counter the potential socioeconomic backlash. (see attachment)

Curbing speculations?

Traditionally, there are two important tools available to government to curb excessive properties speculations and they are interest rate and RPGT. Since 2008 global financial crisis, central banks globally including Malaysia had slashed their interest rate to all time low in order to spur economic activities.

Picture taken from Business Times

On top of that, RPGT stayed low at a flat 5% for properties sold within 5 years. "5% only?" you may ask. Yes, and this is a contributing factor on why properties prices remain elevated.

Is it enough?

However, economists are saying that the latest announcement made on RPGT was relatively "too soft" in contain the problem. Anyway, this is a good news though for property speculators or investors as 10% RPGT within 2 years can be easily absorbed. Then, how much is enough?

     

     Genuine buyers said: "Higher is better".

     Property developers said: "Current rate is enough".

Finance Malaysia reckons that 10% is definitely not enough. The marginal increments looks like government is only "entertain" the perception of general public, while protecting property developers, we think. As such, we are suggesting a higher rate as below:

By imposing a higher RPGT, that could possibly boosted government tax revenue, thus lowering down the over-optimism budget deficit target. Why don't government implement that way?

Budget 2012: How Does 1% more EPF Affecting YOU?

During the recent Budget 2012 announcement, one of the controversial issue is the increment of 1% contributed by employers to EPF effective 1st January 2012. This will bring the minimum contribution rate by employers to 13% from 12% currently for those earning less than RM5,000 per month.

The Fatter EPF

While employees are welcoming the new rules, many employers are voicing out their concern on the extra burden being bear by them. "This is not fair to us, especially during current scenario where businesses are bracing for more challenging times ahead", says one of the concerned boss. Although there is some sort of tax-relief for employers who contribute more, bosses are still unsatisfied by the new ruling which adds to their fixed costs.

What is the rationale behind?

The reason is somewhat very good, that is "to equip Malaysians more retirement funds for their golden age" after recent facts shown that Malaysian generally fully utilized their EPF monies between 3-10 years time after retired. This is an alarming issue which prompt government to impose the new ruling.

We work hand-in-hand

However, Finance Malaysia found another good reason behind all this. That is "EPF needs more money". Why?

1. General election is coming very soon
2. We need a feel good factor on Bursa Malaysia
3. External environment resulting in a not so perform KLCI

If we link all the three points together, we can come out a conclusion, which is "Due to the gloomy economic outlook caused by western countries, Bursa Malaysia is in red territories in-line with other countries. Normally, KLCI is also an index which measures the health of Malaysia's economy. In other words, people perceived that our economy is good if KLCI is advancing, which acts as an advantage for the government in the coming general election. And, one of the important supporters was EPF". So, you know why EPF needs more money now?

Then, how does 1% more EPF affecting you?

Less Increment. If raw materials prices eats into profit, bosses will pass the extra costs to end consumers. Does this 1% more EPF consider as extra cost to bosses? Definitely. But, this is called operating costs to employers. So, the natural option for employers is to giving you less increment, thus reducing the effect of 1% more EPF contributions.

Example, you may only get a 9% increment, instead of your deserved 10%. Anyway, you still get the money in this case, but is in your EPF account rather than cash in hand. Good luck, buddies.

Note: This is purely for your own consumption without the intention to provoke any parties.

4 Interesting Questions on Budget 2012

Well, well, well... The newly announced Budget 2012 seems to be a very holistic one, which covers almost everyone (even the opposition MPs). In the budget, a total of RM232.8 billions was allocated to implement all Government development plans, which include the projects and programs under various plans, focusing on the well-being of the rakyat. But, there are a few interesting questions that Finance Malaysia would like to highlight here.

1) Is it too optimistic?

As we all know, the external environment is becoming more challenging once again due to slowdown in US, Europe and Japan (if not double-dip recession). This would definitely impact Malaysia as manufacturing sector still playing a crucial role in our country's growth. While IMF is revising downward the global growth next year, our Government is projecting a 5 - 5.5% growth this year, and 5 - 6% for 2012. I think we should be very happy if Malaysia can grow more than 4.5% for 2011 and 2012.

2) Budget Deficit to come down?

Taking into account the estimated revenue and expenditure, the Federal Government deficit in 2012 is expected to improve to 4.7% of GDP compared with 5.4% in 2011. As we all know, Petronas is the main contributor to Government's revenue, which is heavily relies on crude oil prices. How much is the estimated price Government based on 2012? It does not stated. Of course, it should be lower than current year. Am I correct?

3) Construction sector to be one of the main growth engine?

By setting a 7% growth forecast for Construction sector next year, is it too optimistic (yet again)? Given the current state of delayed tendering process, land acquisition dispute and change of project owners (MRT project), I doubt the execution part of the beautifully layout projects. Do remember that Hong Kong and Singapore takes more than 5 years just for planning for their MRT projects. And, if we can kick-start so soon, sure Malaysia Boleh!!!

4) Is it really Rakyat-centric?

Just as rakyat coping with high living cost, especially in urban areas, there is some relieves after the Government's latest various incentives and rebates. Subsidies on some of the basic food items were continued. Concurrently, our MPs also have higher allowance. This seems like a win-win situation. However, would the Government forgot about another very important item - petrol? As promised earlier, our petrol prices are adjusted according to market price. Judging from the fallen crude oil prices lately, why Government still not yet lower petrol prices? I believe this is definitely a better and more effective way to help rakyat.

AirAsia vs Tiger Airways

"If Tigers were meant to fly, they would be born with wings"

What do you think?

Congratulations, AirAsia won another award - "The Best Airline Advertisement" (if there is such an award)!!!

Interestingly, both airline has many similarities.

Both are budget airline

Both are headed by Tony (AirAsia's Tony Fernandes and Tiger Airways' Tony Davis)

Below is the full-story of the battle:

Fernandes : "We're Asians, not a bunch of white guys running the airline"

Davis        : "It was a racist remark"

Fernandes : "It was a tiny carrier"

Davis        : "Tiger aims to be among the top three global airlines"

< Then, the famous advertisement popped up in Singapore newspaper >

Davis        : "It's no wonder some of our competitors are getting so rattled"

Because of the interesting advertisements from AirAsia, DiGi, Maxis, Celcom... I like reading advertisements more than before. Hopefully, after the advertisement-war, price-war will erupted soon. By then, "Everyone can Benefit"...

Where is the money for "Warisan Merdeka"?

One of the most controversial project announced in Budget 2011, Warisan Merdeka claim the top spot. Dubbed as Malaysia's tallest building with 100-storey tall, the 10 years project will kick-start next year. However, many quarters lamented the project as lavish, unnecessary, and would worsen the famous KL city traffic.

In respond to this, PNB's group chief executive Tan Sri Hamad Kama Piah hold a press conference to address the issue. Among the key phrases taken are:

"We are not taking government's money (for this project)"

"PNB had the capability to finance the project through internally generated funds"

"PNB existing head quarter will be 30 years old when the project is completed"

Show me the $$$...

Yes, I believe PNB would not use government's money for this project. Anyway, what does it meant by internally generated funds? As we know, PNB managed a range of Amanah Funds in the country. 

Yes, I believe PNB would not use our Amanah Saham Funds' money for this project. The internally generated funds is mainly coming from the returns generated through investments in a portfolio of listed companies, such as Sime Darby. Actually, who gave money to PNB to invests? Is this called "internal generated funds"?

Meanwhile, there is fact that KL office space is over-supply currently, and projected it will precede for another 6 years. Current take-up rate at KL city center is only 80%. Although it will take 10 years to complete, the huge building means great office space will be made available by then. Could PNB find the tenants by then?

Yes, PNB will make the new tower as its new head quarter, and for its investee companies too. But, can it be enough for 100% occupancy? Definitely NOT enough. So, PNB have to attract other tenants, which is a problem to another problem - traffic congestion.

Just imagine, 10,000 people with 2,500 cars coming out from the car park!!! How are you going to attract tenants? If no tenants, PNB would face losses (I hope not our Amanah Saham) then.

Undoubtedly, I would like to see a successful big project taking shape. But, due considerations must be made to such multi-billion project. Can we build it at Putrajaya instead?

Budget 2011: Goodies for first-time house buyers

First Home Scheme was being introduced by the Government in Budget 2011 as below to encourage home ownership among Malaysians:

• Specially cater for first-time house buyers with monthly household income below RM3,000.
• 100% loan for houses priced below RM220,000.
• 50% stamp duty exemptions on instruments of transfer on houses below RM350,000.
• 50% stamp duty exemptions on loan agreement instruments on houses below RM350,000.

To facilitate the 100% loan, Cagamas Bhd (national mortgage corporation) will provide guarantee on the 10% down-payment to eligible house buyers.

Signals sent-out by Government:

1. Enabling first-time buyers to afford their first home.

2. Developers should build more houses which is affordable for such categories.

Advise to first-time house buyers:

1. The securing of such a loan is still subject to how much the banker willing to lend you.

2. 100% loan means higher monthly repayment for borrower.

3. Always buy within your means, not because of such scheme.

How about the buzzing higher down-payment ratio?

Although Government does not raising the down-payment to 20% or 30%, I believe it will announce later. The interesting part is always follows later.

Budget 2011: Price of Mobile Phone to DROP?

Yahoooo!!! Budget 2011 announced that ordinary phones would be exempted from the 10% sales tax. Yes, we can expect that the prices of mobile phones to drop a little bit, although not much, especially for first time buyers.

Would iPhone and other smart-phone's prices drops?

To be exact, the removal of sales tax is only meant for "ordinary phones", not smart-phones, as the latter already DO NOT have any sales tax. So sorry for those iPhone seekers out there.

For me, this will only benefiting those low income earners. Yet, I strongly agree with it. Instead, the 10% sales tax removal should first be on ordinary phones in the first place (anyway, now is not too late).

In today's era of connectivity and popular usage of social media (etc. Facebook, Twitter...), smart-phones and those with Internet applications, was the preferred choice for many of us. Thus, I do not view this announcement as a gift to many of us. What a disappointed happiness for me.

Post-Budget 2011 Interview with Finance Malaysia

* Please take note that this blog is for reading pleasure only, and NOT intended to offend any party.

Below are some questions posted to Finance Malaysia (FM), with some interesting reply:

Q    : Let's start off with the famous KL MRT project. Any comment?

FM : Well, this is definitely a good public transport reformations for KL citizen. However, please bare in mind that the extensions of two existing LRT lines still not yet started. Implementation is problem, not project.

Q    : How about the development of the Malaysian Rubber Board land in Sg. Buloh by EPF?
FM : The project costs RM10bil for 15 years. I don't know when EPF (Malaysians' retirement fund) role has changed to being a developer?

Q    : Malaysia's tallest building - 100-storey Warisan Merdeka. Is it necessary?
FM : So that Osama can either choose this or Twin-towers. Haha. Since EPF can be a developer, why not PNB? Malaysia Boleh spirit for all...

Q    : Existing income tax relief of up to RM6,000 extended to Private Pension Fund contributions. Good?

FM : Sounds good, but not viable. Because, first, those who afford private pension fund most likely already exceed the limit. Second, if we bought a simple life insurance, the premium plus with EPF contributions, already exceed the limit. Instead, government should separate life insurance premium with those contributions.

Q    : Wow... RM 3bil Karambunai eco-nature resort in Sabah.
FM : Yes. We have another "first" of the world, but, with RM 3bil we can buy the whole Sabah already.

Q    : Service tax increased from 5% to 6%. How would it affect us?
FM : Watch online TV, instead of Astro. 20% (5% to 6%) increase yet considered minimal as stated?

Q    : To develop football, a Football Academy will be build in Pahang. Why Pahang?
FM : First, can we revive our football team? Second, maybe Pahang is the home of prime minister (not football).

Q    : NO toll rate hike from PLUS expressway for next 5 years?
FM : I believe this is the only thing which directly benefiting me. Would it be better if this is permanent?