By Kee Thuan Chye | Malaysian Digest
I don’t know about you but I got practically nothing from the 2013 Budget. I don’t qualify for the BR1M payout of RM500 for households with a monthly income of not more than RM3,000. I also don’t qualify for the 50% discount on passports for senior citizens.
But that’s all right. I don’t want anything from the Budget. It comes from the people’s money and should be spent wisely on developing the country. I should not expect to get something directly from it.
The way it looks, though, Prime Minister Najib Razak doesn’t seem to think the same way. His 2013 Budget is a lot about giving money away to people. It seems this is to make them happy, and perhaps this feeling of happiness could translate into votes for his Barisan Nasional (BN) government at the upcoming general election.
What worries me is that Najib is spending money like there is no tomorrow. That seems the right way to put it because his Budget does not address the future. Maybe except for education, especially in boosting vocational training and encouraging small entrepreneurs.
There’s hardly anything about enhancing the country’s economic growth, spending prudently or reducing the national debt.
In fact, of the projected amount of RM252 billion to be spent, a whopping RM202 billion will be used for operating expenditure. Only one-fifth left is for development expenditure.
Najib is gung-ho about the global economy despite the uncertainties predicted by financial analysts. He said, “In 2013, based on the prospects of an improved global economy, the Malaysian economy is forecast to expand strongly between 4.5% and 5%.”
Is that predicated on a DR1M?
Meanwhile, the reality, according to online news website Free Malaysia Today, is that this year the national debt has risen 10.1% to a new high of RM502.4 billion or 53.7% of the GDP. That is only 1.3% short of the 55% debt ceiling the country is allowed to reach.
And according to The Malaysian Insider, this debt figure “does not include hidden liability of RM117 billion (12 per cent of GDP) in the form of guarantees issued against commercial loans to government agencies and GLCs (government-linked corporations)”.
Is our fiscal future already in the pawnshop?
In the social media, people are calling Najib “an illusionist” for throwing so much money around when Malaysians are wondering where it is coming from. They’re calling this Budget “the biggest bribe Budget of all time”.
The main targets appear to be the low-income groups, youths and civil servants (who will be getting one-and-a-half month’s bonus).
BR1M is back. It has even been extended to unmarried individuals aged above 21 who are earning not more than RM2,000 a month. These people will get RM250.
I don’t understand the rationale for this. In fact, I think it’s rather silly. Perhaps the minimum age is too low. A newly graduated employee who earns, say, between RM1,500 and RM2,000, which is about what a lot of fresh graduates get these days, would be entitled to the BR1M RM250 even if he or she doesn’t need it.
And what if this person has lost both parents and is therefore a household of one? Does he or she claim the RM250 plus the BR1M RM500, which in principle he or she should also be entitled to?
Even more mind-boggling is the RM200 rebate for those aged between 21 and 30 earning not more than RM3,000 to buy smartphones. Why smartphones? It’s a non-essential item. Besides, many may already own one.
Consider this: A 20-something who earns RM2,900 and has no dependents, therefore no commitments, would be flushed with cash and already own a smartphone. Why give him or her that aid?
As someone pointed out on Facebook, it may transpire that some of them will make a deal with the smartphone dealers and get the cash instead. “Just give me RM150, you keep the other RM50” or something like that.
We saw signs of such a tendency when the Government gave tertiary students book vouchers earlier this year only to see them put up for sale on the Internet. Not having learned from that experience, it is still giving out more book vouchers, worth RM250, through the new Budget.
Indeed, the range of goodies dished out to youths seems to show desperation on the part of BN to secure their goodwill since many of them will be voting at GE13. The Budget even offers a 20% discount to borrowers who pay back in full their National Higher Education Fund Corporation (PTPTN) loans by the end of September next year.
This was, to be sure, taking a leaf from the Opposition’s Buku Jingga. It just falls short of Pakatan Rakyat’s proposal to do away with the loans totally and therefore giving free education to everyone. Nonetheless, the Government was not bashful about appropriating the basic theme.
That’s not surprising. This is not the first time the Government has taken ideas from Pakatan Rakyat and used them. Besides, with the general election coming up, any populist idea has to appear a great idea.
Sceptics, however, are not persuaded. Neither are those who are capable of seeing beyond the temporary gratification of the handouts they are given.
As one Netizen wrote on Facebook: “Ini semua secara ‘pinjaman’ saja. (This is all just a ‘loan’.) Payback time will come after GE13. The people will have to pay back with interest if BN wins. Wait and see.”
Indeed, when the Government has to give money out like this, something must have been wrong with its administration of the country. Has it not done the right things to improve the economy of a country blessed with a wealth of natural resources in order to ensure that its people enjoy a high per capita income arising out of a huge GDP?
Why are we at this point in our development still trying to become a high-income nation? Why is our average national wage still so low? According to CIMB, in 2010 it stood at only RM1,804.43.
I was recently reminded by a friend about ‘Bersih, Cekap dan Amanah’ (Clean, Efficient and Trustworthy), the tagline of former prime minister Mahathir Mohamad’s administration. What happened to its promise? Did it turn out to be the opposite instead? And thereby led to leakage and wastage of public money and corruption in high places that sucked away our resources and rendered us poorer than we should be?
Ironically, then, the 2013 Budget shows us even more clearly the failure of the BN government over the decades in taking the country’s economy to a higher level. Compared to Singapore, which has no natural resources, Malaysia is a laggard.
And yet, to make doubly sure that Malaysians got the message that his goodies were meant to secure their votes, Najib stressed: “With … support from the rakyat, God-willing, we will see six more budgets tabled by the BN government before Malaysia transforms into a nation with high-income status” (meaning in 2020).
He then proceeded to bash the Opposition.
It prompted someone to post in Facebook: “This is the first time in the history of Malaysia that a PM shamelessly tells us that we need to vote for him after he gives out the goodies. Tak malu ke? (Not embarrassed?) Does he think the Government coffers belong solely to BN?”
Yes, lest we forget, the money is not BN’s. It is the public’s money. Yours and mine.
Blogger Sakmongkol AK47 puts it aptly, “The Budget is about the PM asking for our money and telling us how he wants to use the money he is asking from us. It is not a gift from him, not ehsan or hadiah.”
This connotes that we need not be grateful for getting the handouts because it’s our own money. Nonetheless, we still need to ask: Is the PM doing the right thing with our money? Is he bribing us? And if he is, will we allow ourselves to be bribed?
These are questions we also need to answer.
Kee Thuan Chye is the author of the bestselling book No More Bullshit, Please, We’re All Malaysians. Its Malay translation, Jangan Kelentong Lagi, Kita Semua Orang Malaysia, is now in bookstores.
Tuesday, October 2, 2012
Monday, October 1, 2012
Breaking News : Court: Mkini should be allowed publishing permit
The Kuala Lumpur High Court's Appellate and Special Powers division has quashed the Home Ministry's decision not to grant a publishing permit to Mkini Dotcom Sdn Bhd which operates the Malaysiakini news portal.
Ruled the ministry’s decision as “improper and irrational”, Justice Abang Iskandar Abang Hashim also said the home minister's decision was misdirected as it exceeds the limit of its jurisdiction.
“The decision affects the right of the plaintiff to the right to freedom of expression which also includes the right to a permit, and it is a fundamental liberty enshrined in the constitution,” he said.
"Hence, the court allows the application for a certiorari (to quash) the decision of the respondents (Home Ministry) and the applicant needs to submit its letter to the ministry.”
Justice Abang Iskandar noted that freedom of expression (through publication) is a natural right and enshrined in Article 10 of the federal constitution.
He also recognised the fact that the portal has won numerous local and international awards, and that this should not stop the authorities from not giving a permit.
Justice Abang Iskandar also ordered the Home Ministry to pay RM5,000 in costs.
K Shanmuga and Edmund Bon represented Mkini Dotcom.
Read full report at Malaysiakini
Ruled the ministry’s decision as “improper and irrational”, Justice Abang Iskandar Abang Hashim also said the home minister's decision was misdirected as it exceeds the limit of its jurisdiction.
“The decision affects the right of the plaintiff to the right to freedom of expression which also includes the right to a permit, and it is a fundamental liberty enshrined in the constitution,” he said.
"Hence, the court allows the application for a certiorari (to quash) the decision of the respondents (Home Ministry) and the applicant needs to submit its letter to the ministry.”
Justice Abang Iskandar noted that freedom of expression (through publication) is a natural right and enshrined in Article 10 of the federal constitution.
He also recognised the fact that the portal has won numerous local and international awards, and that this should not stop the authorities from not giving a permit.
Justice Abang Iskandar also ordered the Home Ministry to pay RM5,000 in costs.
K Shanmuga and Edmund Bon represented Mkini Dotcom.
Read full report at Malaysiakini
Pakatan Rakyat: Building an Economy for All
By Liew Chin Tong
Barisan Nasional paraded its “55 years” of track record” in “fulfillment of promises” – Janji Ditepati – during the Prime Minister Najib Razak’s recent roadshows and on National Day 2012.
One would expect a government with such a long experience in office would have long term strategies for the nation. Unfortunately, apart from arguing that i) change of government is not good for the economy and ii) that it is better to elect the known devils than the unknown angels, BN offers very little beyond the status quo.
BN’s economic platforms today can be summed up as follow:
BN’s polls-driven handouts and Pakatan’s care for the people
BN launched its polls-driven handouts, Bantuan Rakyat 1Malaysia (BR1M), in the 2012 Budget. It was actually a response to policy ideas mooted by Pakatan Rakyat.
Pakatan Rakyat announced in August 2011 that its Budget 2012 aimed at uplifting families with household monthly income of less than RM3,000. Deputy Prime Minister Muhyiddin Yassin replied that Pemandu was instructed to craft a response, which eventually becomes the RM500 per household aid.
In comparison, Pakatan Rakyat’s policies are well thought-out answers to the economic malaise faced by Malaysians.
The Malaysian economy is now serving the vested interests of a small group of cronies at the expense of ordinary Malaysians.
Such dire situations require national attention. It is an impending crisis that has been swept under the carpet.
Economic policies must focus on improving the income and disposable income of the 60% at the bottom.
The basic idea is that when the ordinary folks have more cash in hand, they would not keep it in Swiss banks like the cronies; the lower income group would spend the cash in the economy, hence keeping the domestic economy afloat which in turn would benefit the businesses through multiplying effect from the expansion of aggregate demand.
It will be a rising tide that lifts all boats.
The global economic crisis has made it more urgent for Malaysia to focus on improving income and disposable income of its citizens. The most profitable economic activities of Malaysia and the rest of Asia for the most of the past four decades have been about exporting to the United States and Europe. Suppression of wages and currencies are typical policy tools to keep export cheap and competitive.
However, the advance nations are now faced with high unemployment rate which means diminished purchasing power.
What Pakatan will do for the people
Malaysia and other Asian neighbours need to ensure that its citizens have enough money to consume their own products to sustain a vibrant economy.
In the long run, huge income gap and a large section of the society being squeezed economically jeopardise cohesiveness and security of a society.
Hence, Pakatan Rakyat offers:
Through various policy measures to increase female labour participation from 46% to 60% within five years. A bi-salary family generally means a higher household income.
Most Malaysians, especially the lower income and middle class, have to fork out large portion of their incomes to pay for transportation, housing, education, health and security, due to poor delivery of public services or outmoded public policies. Addressing policy gaps in these areas will help improve disposable income of ordinary Malaysians.
Pakatan Rakyat proposes:
Demolishing monopolies, cartels and oligopolies also play an important role in the effort to improve disposable income of the ordinary folks. Abolishing tolls in stages, removing control of cronies over paid television, rice, sugar etc, will contribute to better disposable income.
It is clear that Pakatan Rakyat offers a better life for all of us. BN has the opportunity to do something good for the country but its leaders have chose to protect only their family members and cronies.
Without offering new ideas and initiatives, BN can only offer cash handouts now. After the general election (which is within the next few months), each and every one of us
Who will bankrupt the country?
BN has been attacking Pakatan Rakyat’s policies by claiming them to be mere populist measures without being fiscally responsible, and if implemented will bankrupt the nation.
Alas, typical propaganda from UMNO and BN leaders, as they are the ones who are controlling the media for many decades.
One of Pakatan’s key policy objectives is to see that Malaysian families live on a household income of more than RM4,000 a month at the end of PR’s first term as the federal government. The RM4,000 a month objective is not an income guarantee or a minimum wage.
PR is reshaping our economy to one that shifts from BN’s obsession with race quota and distribution of wealth to a select few, to one that helps everyone at the bottom 60% regardless of race to live a dignified life.
How the people will suffer under BN: Beware of GST
BN has no solution to finance the ballooning national debts.
The BN Government claims that now “educating” the public on the impending implementation of Goods and Services Tax. It has also whispered to the financial market that the unpopular tax would be implemented in 2014. There are also talks about subsidy cuts which means higher fuel price.
Pakatan is not in favour of a higher fuel price until and unless public transport is adequate. The lack of decent public transport makes private vehicles almost a necessity.
Studies have shown that petrol price hike encouraged people to switch to motorcycle from cars, and, as a consequence, resulted in higher motorcycle deaths. Policy makers must be cognizant of the implications and impacts of their decisions on ordinary citizen.
Likewise, those who promoted the GST as the silver bullet to “get more people to pay tax” and solve the budget deficit are living in their own world. They said that there are too few Malaysians paying tax.
Certainly there are tax evaders and we have sufficient laws to deal with them. But the reason why the bulk of the population is not paying tax is because their income is too low to qualify to pay taxes.
Imposing a new tax on the lower income group is bad enough. A regressive, blanket tax like GST is going to hurt the bottom 60% badly. And with the bulk of the population having less disposable income, the rest of the economy would not do well either.
What must we do
BN should return to the root causes of high deficit – corruption and cronyism. In order to reduce the level of debts, the government must deal with corruption steadfastly. Unfortunately, UMNO and BN leaders are not interested in doing all these good things.
Why? Doing good for the people means putting aside their cronies. No, BN will never do that and has no intention of doing it.
The choice is getting clearer now. We voters of Malaysia have the power to decide what’s best for our family, our community and our nation.
Barisan Nasional paraded its “55 years” of track record” in “fulfillment of promises” – Janji Ditepati – during the Prime Minister Najib Razak’s recent roadshows and on National Day 2012.
One would expect a government with such a long experience in office would have long term strategies for the nation. Unfortunately, apart from arguing that i) change of government is not good for the economy and ii) that it is better to elect the known devils than the unknown angels, BN offers very little beyond the status quo.
BN’s economic platforms today can be summed up as follow:
1) Criticising Pakatan Rakyat’s economic policies as populist (while not offering concrete economic policies and strategies);
2) Offering more handouts to win the general election (which will cost billions of ringgit);
3) Preparing to introduce Goods and Services Tax (GST) after the general election (GST means every single person in Malaysia will be taxed).
BN’s polls-driven handouts and Pakatan’s care for the people
BN launched its polls-driven handouts, Bantuan Rakyat 1Malaysia (BR1M), in the 2012 Budget. It was actually a response to policy ideas mooted by Pakatan Rakyat.
Pakatan Rakyat announced in August 2011 that its Budget 2012 aimed at uplifting families with household monthly income of less than RM3,000. Deputy Prime Minister Muhyiddin Yassin replied that Pemandu was instructed to craft a response, which eventually becomes the RM500 per household aid.
In comparison, Pakatan Rakyat’s policies are well thought-out answers to the economic malaise faced by Malaysians.
The Malaysian economy is now serving the vested interests of a small group of cronies at the expense of ordinary Malaysians.
• 60% lives on a household income of not more than RM3,000 monthly; in fact, 40% are below RM1,500;
• Household debts is 77% of Gross Domestic Product (GDP); worse still, household debts is 140% to disposable income, second highest in Asia after Japan;
• 33% of workers earn an income of less than RM700 monthly.
Such dire situations require national attention. It is an impending crisis that has been swept under the carpet.
Economic policies must focus on improving the income and disposable income of the 60% at the bottom.
The basic idea is that when the ordinary folks have more cash in hand, they would not keep it in Swiss banks like the cronies; the lower income group would spend the cash in the economy, hence keeping the domestic economy afloat which in turn would benefit the businesses through multiplying effect from the expansion of aggregate demand.
It will be a rising tide that lifts all boats.
The global economic crisis has made it more urgent for Malaysia to focus on improving income and disposable income of its citizens. The most profitable economic activities of Malaysia and the rest of Asia for the most of the past four decades have been about exporting to the United States and Europe. Suppression of wages and currencies are typical policy tools to keep export cheap and competitive.
However, the advance nations are now faced with high unemployment rate which means diminished purchasing power.
What Pakatan will do for the people
Malaysia and other Asian neighbours need to ensure that its citizens have enough money to consume their own products to sustain a vibrant economy.
In the long run, huge income gap and a large section of the society being squeezed economically jeopardise cohesiveness and security of a society.
Hence, Pakatan Rakyat offers:
• A monthly minimum wage of RM1,100 (BN only announced the figure of RM900 a month but had yet to implement it);
• A commitment to reduce unskilled foreign workers who drive down wages and impede drive for automation;
• Through massive assistance to industries and businesses to encourage innovation, technological upgrade and automation to shift the economy away from its dependence on unskilled foreign labour;
Through various policy measures to increase female labour participation from 46% to 60% within five years. A bi-salary family generally means a higher household income.
Most Malaysians, especially the lower income and middle class, have to fork out large portion of their incomes to pay for transportation, housing, education, health and security, due to poor delivery of public services or outmoded public policies. Addressing policy gaps in these areas will help improve disposable income of ordinary Malaysians.
Pakatan Rakyat proposes:
• Transportation – to reduce excise duties for car in order to cut car price hence reducing debt burden while improving the disposable income of ordinary Malaysians; to develop a multimodal public transport system which is based on bus and bus rapid transit (BRT) to reduce dependence on private vehicles.
• Housing – apart from taming speculation, new concepts such as social housing for the poor that do not require them to own a house, shared equity for middle class households and other measures would be introduced to ensure the availability of housing for those who need them, as well as reducing indebtedness.
• Education – free university education so that the youth are not burdened with huge debts before starting their careers.
• Health – to improve public health care services and to require government linked corporations not to own shares of private hospitals with the aim to narrow the gaps between public and private provision of healthcare.
• Security – to ensure the full commitments of the police to crime prevention.
Demolishing monopolies, cartels and oligopolies also play an important role in the effort to improve disposable income of the ordinary folks. Abolishing tolls in stages, removing control of cronies over paid television, rice, sugar etc, will contribute to better disposable income.
It is clear that Pakatan Rakyat offers a better life for all of us. BN has the opportunity to do something good for the country but its leaders have chose to protect only their family members and cronies.
Without offering new ideas and initiatives, BN can only offer cash handouts now. After the general election (which is within the next few months), each and every one of us
Who will bankrupt the country?
BN has been attacking Pakatan Rakyat’s policies by claiming them to be mere populist measures without being fiscally responsible, and if implemented will bankrupt the nation.
Alas, typical propaganda from UMNO and BN leaders, as they are the ones who are controlling the media for many decades.
One of Pakatan’s key policy objectives is to see that Malaysian families live on a household income of more than RM4,000 a month at the end of PR’s first term as the federal government. The RM4,000 a month objective is not an income guarantee or a minimum wage.
PR is reshaping our economy to one that shifts from BN’s obsession with race quota and distribution of wealth to a select few, to one that helps everyone at the bottom 60% regardless of race to live a dignified life.
How the people will suffer under BN: Beware of GST
BN has no solution to finance the ballooning national debts.
The BN Government claims that now “educating” the public on the impending implementation of Goods and Services Tax. It has also whispered to the financial market that the unpopular tax would be implemented in 2014. There are also talks about subsidy cuts which means higher fuel price.
Pakatan is not in favour of a higher fuel price until and unless public transport is adequate. The lack of decent public transport makes private vehicles almost a necessity.
Studies have shown that petrol price hike encouraged people to switch to motorcycle from cars, and, as a consequence, resulted in higher motorcycle deaths. Policy makers must be cognizant of the implications and impacts of their decisions on ordinary citizen.
Likewise, those who promoted the GST as the silver bullet to “get more people to pay tax” and solve the budget deficit are living in their own world. They said that there are too few Malaysians paying tax.
Certainly there are tax evaders and we have sufficient laws to deal with them. But the reason why the bulk of the population is not paying tax is because their income is too low to qualify to pay taxes.
Imposing a new tax on the lower income group is bad enough. A regressive, blanket tax like GST is going to hurt the bottom 60% badly. And with the bulk of the population having less disposable income, the rest of the economy would not do well either.
What must we do
BN should return to the root causes of high deficit – corruption and cronyism. In order to reduce the level of debts, the government must deal with corruption steadfastly. Unfortunately, UMNO and BN leaders are not interested in doing all these good things.
Why? Doing good for the people means putting aside their cronies. No, BN will never do that and has no intention of doing it.
The choice is getting clearer now. We voters of Malaysia have the power to decide what’s best for our family, our community and our nation.
Budget 2013: Same old formula, with no solutions
Tony Pua MP SPEAKS | Malaysiakini
Over the past few years, the government has been able to increase its budget tremendously to achieve record expenditures annually.
This has allowed the government to prop up the economy as we face challenges in attracting private investments, as well as a drop in our trade contributions.
However, Budget 2013 has projected an increase of only 0.7 percent (2012: 11.8 percent; 2011: 16.1 percent) in projected revenues from RM207.2 billion to RM208.6 billion in 2013.
This is the slowest projected increase in the tabled budget since 1999, barring the global financial crisis in 2009.
Consequently, the government is forced to table a smaller budget than the prior year. The proposed operating expenditure has been reduced by 0.3 percent from RM202.6 billion to RM201.9 billion, while the development expenditure is also reduced from RM46.9 billion to RM46.7 billion or 0.4 percent.
The marked decline in revenue growth will have a very significant impact on the government’s ability to impact growth in the Malaysian economy through fiscal means.
The fact that we have not been able to reduce our budget deficit below four percent over the past few years reflects the years of wasted opportunities, where we have failed to curb our expenditure through reduced wastage, abuses and corruption.
Consistent decline in development expenditure
Of concern is also how the government has consistently reduced its emphasis on Development Expenditure, which will create greater multiplier effects on our economy.
The proportion of the budget expenditure dedicated to Development Expenditure has reduced from 31.5 percent in 2003 to 27.1 percent in 2007 to 21.3 percent in 2012. The worrying trend continues in 2013 where the proportion is reduced further to only 18.6 percent, a record low in Malaysia’s history.
This represents lower investment by the government with its current revenue, which will result only in lower returns to the economy in the years ahead.
Our federal government debt has increased rapidly from RM242 billion in 2004 to RM363 billion in 2009 and to RM456 billion in 2011. For 2012, it is projected that our debt will hit RM502 billion. That represents a marked 107.4 percent increase in debt over the past eight years.
More worryingly, the debts have increased our structural debt service commitments significantly.
The rate at which our debt servicing commitments are growing will severely constrict our future operational and development expenditure. This, together with a much slower rate of growth in government revenue, as shown in Budget 2013, will have a major impact on our economy, given its current heavy reliance on public spending and investments.
From 2003 to 2008, our debt servicing obligations increased by 21.9 percent from RM10.5 billion to RM12.8 billion. However, in the next five years from 2008 to 2013, the annual commitment has increased by a whopping 73.4 percent!
Federal debt will increase
The official federal government debt is also expected to increase as a proportion of our GDP from 51.8 percent to 53.7 percent, staying marginally below the 55 percent legal federal government debt limit.
However, even the 53.7 percent is an artificial figure as it fails to take into consideration the government’s contingent liabilities and hidden debts, which amounted to RM117 billion as at December 2011.
What is frightening is the government’s contingent liability is expected to increase exponentially in 2013 due to the expenditure on the RM53 billion MRT project as well as other mega-infrastructure projects.
These debt-driven expenses are completely off the balance sheet or not considered part of the official federal government debt, despite it ultimately being funded by the federal government.
In Europe, Spain, which is facing a major financial crisis that requires hundreds of billions of euro bailout, has an “official” debt to GDP ratio of 68.5 percent. But due to various contingent liability and bank bailouts, the “real” ratio, which is significantly higher, has caused a near collapse of its economy in a crisis that is still evolving.
We must not allow ourselves to get entangled in a similar crisis.
No political will
Based on the Economic Report, the government was able to keep its deficit below five percent at 4.7 percent for 2012 only because of an unbudgeted increase in revenue by RM21 billion for the year. If not for the above, based on the government’s expenditure in 2012, our deficit would have increased to 6.7 percent.
The government has announced its plan in Budget 2013 to keep the deficit at four percent. However, it has become clear that the government’s original target as late as 2011 to reduce our deficit to 2.5 percent by 2015 is no longer achievable.
The steep decline of growth in the government’s revenue will make the task seemingly impossible.
The budget demonstrates no political will on the part of the federal government to make the necessary structural changes to the way we manage our budget. We see a decline in the proportion of funds spent on development expenditure. We also do not see a serious effort to tackle federal government debt, both “official” and “hidden”.
Budget 2013 reads like a repeat of budgets in the previous years, using the same formula without taking into consideration the changing circumstances and the increasing economic challenges we face today.
Over the past few years, the government has been able to increase its budget tremendously to achieve record expenditures annually.
This has allowed the government to prop up the economy as we face challenges in attracting private investments, as well as a drop in our trade contributions.
However, Budget 2013 has projected an increase of only 0.7 percent (2012: 11.8 percent; 2011: 16.1 percent) in projected revenues from RM207.2 billion to RM208.6 billion in 2013.
This is the slowest projected increase in the tabled budget since 1999, barring the global financial crisis in 2009.
Consequently, the government is forced to table a smaller budget than the prior year. The proposed operating expenditure has been reduced by 0.3 percent from RM202.6 billion to RM201.9 billion, while the development expenditure is also reduced from RM46.9 billion to RM46.7 billion or 0.4 percent.
The marked decline in revenue growth will have a very significant impact on the government’s ability to impact growth in the Malaysian economy through fiscal means.
The fact that we have not been able to reduce our budget deficit below four percent over the past few years reflects the years of wasted opportunities, where we have failed to curb our expenditure through reduced wastage, abuses and corruption.
Consistent decline in development expenditure
Of concern is also how the government has consistently reduced its emphasis on Development Expenditure, which will create greater multiplier effects on our economy.
The proportion of the budget expenditure dedicated to Development Expenditure has reduced from 31.5 percent in 2003 to 27.1 percent in 2007 to 21.3 percent in 2012. The worrying trend continues in 2013 where the proportion is reduced further to only 18.6 percent, a record low in Malaysia’s history.
This represents lower investment by the government with its current revenue, which will result only in lower returns to the economy in the years ahead.
Our federal government debt has increased rapidly from RM242 billion in 2004 to RM363 billion in 2009 and to RM456 billion in 2011. For 2012, it is projected that our debt will hit RM502 billion. That represents a marked 107.4 percent increase in debt over the past eight years.
More worryingly, the debts have increased our structural debt service commitments significantly.
The rate at which our debt servicing commitments are growing will severely constrict our future operational and development expenditure. This, together with a much slower rate of growth in government revenue, as shown in Budget 2013, will have a major impact on our economy, given its current heavy reliance on public spending and investments.
From 2003 to 2008, our debt servicing obligations increased by 21.9 percent from RM10.5 billion to RM12.8 billion. However, in the next five years from 2008 to 2013, the annual commitment has increased by a whopping 73.4 percent!
Federal debt will increase
The official federal government debt is also expected to increase as a proportion of our GDP from 51.8 percent to 53.7 percent, staying marginally below the 55 percent legal federal government debt limit.
However, even the 53.7 percent is an artificial figure as it fails to take into consideration the government’s contingent liabilities and hidden debts, which amounted to RM117 billion as at December 2011.
What is frightening is the government’s contingent liability is expected to increase exponentially in 2013 due to the expenditure on the RM53 billion MRT project as well as other mega-infrastructure projects.
These debt-driven expenses are completely off the balance sheet or not considered part of the official federal government debt, despite it ultimately being funded by the federal government.
In Europe, Spain, which is facing a major financial crisis that requires hundreds of billions of euro bailout, has an “official” debt to GDP ratio of 68.5 percent. But due to various contingent liability and bank bailouts, the “real” ratio, which is significantly higher, has caused a near collapse of its economy in a crisis that is still evolving.
We must not allow ourselves to get entangled in a similar crisis.
No political will
Based on the Economic Report, the government was able to keep its deficit below five percent at 4.7 percent for 2012 only because of an unbudgeted increase in revenue by RM21 billion for the year. If not for the above, based on the government’s expenditure in 2012, our deficit would have increased to 6.7 percent.
The government has announced its plan in Budget 2013 to keep the deficit at four percent. However, it has become clear that the government’s original target as late as 2011 to reduce our deficit to 2.5 percent by 2015 is no longer achievable.
The steep decline of growth in the government’s revenue will make the task seemingly impossible.
The budget demonstrates no political will on the part of the federal government to make the necessary structural changes to the way we manage our budget. We see a decline in the proportion of funds spent on development expenditure. We also do not see a serious effort to tackle federal government debt, both “official” and “hidden”.
Budget 2013 reads like a repeat of budgets in the previous years, using the same formula without taking into consideration the changing circumstances and the increasing economic challenges we face today.
Desperation in high places
By Rom Nain | malaysiakini.com
The recent uncorroborated, shameful and absolutely baseless allegations about international conspiracies and takeover plots illustrate one simple situation – sheer desperation.
And it is clear that those politically-owned media unethically concocting and sensationalising these allegations would not have dared to make such allegations had they not been owned and controlled by their BN political masters.
Thus, we can safely assume that hidden hands were – and still are – at play. Indeed, as one of their shameless spinners put it on Friday: Nothing personal, as any politician would say, purely the business of politics.
But why the desperation? Indeed, after dishing out millions of OUR money in the form of BR1M, cash handouts to students and pensioners – and even more being dished out in Friday’s Budget – why, indeed, is this regime still scared of facing the rakyat in the 13th general election?
So scared that, despite declaring and bragging that it is a democracy, it hits out at genuine pro-democracy civil society organisations with much-prouder records than the regime has ever had.
Well, perhaps now is a good time to remind ourselves – and those who are still unsure – why this regime is, indeed, feeling desperate. First, in the March 2008 elections, it lost its two-thirds majority in Parliament and also saw five states (until Perak was ‘recaptured’ under dubious circumstances) and the Federal Territory of Kuala Lumpur fall to the Pakatan coalition.
Now, that was a bitter pill to swallow. And, certainly, there was hell to pay, as the then-Prime Minister, (Tun) Abdullah Ahmad Badawi, soon found out. Indeed, about a year later, he was not so much shown the door as he was virtually booted out by the same men and women who, after the virtual landslide victory for BN in 2004, had seen Pak Lah as their saviour.
With the possible exception of that wily old fox, Dr Mahathir, of course. Dr M was always rather lukewarm towards Pak Lah as PM and, by the end of Pak Lah’s short tenure, was already laying into him, blaming him for virtually everything that had gone wrong with BN and UMNO.
Work cut out for him
So, when Najib was handed the post of Prime Minister in 2009, he really had his work cut out for him. He had inherited a coalition that was very much lopsided in nature, with a virtually decimated Gerakan and MIC limping badly, and an MCA that, equally, was having its fair share of internal problems.
And, of course, within his own party, UMNO, the numerous warlords needed appeasing, evidently led by, you guessed it, that old doctor who always seems to be in the house.
Top of the wish list for virtually all of these interested parties within UMNO and the BN was – is - a return to the good ol’ days of having a two-thirds (or above) majority in the Dewan.
Najib knows that. He knows that anything less will, most likely, see his neck on the chopping block. Many believe that he’s been putting off the GE or, indeed, telling us all exactly when it will be held, precisely because he has thus far not received one single assurance, from inside or outside the party, that Barisan Nasional will get back the two-thirds majority.
Next, of course, is the intense political rivalry and the ambitions, especially within UMNO. It’s widely believed that Najib and his Deputy both covet the top post. Number two, Muhyiddin, now, apparently, has that old doctor and party reactionaries and conservatives backing him and a narrow ‘I-am-a-Malay-first’ agenda.
Again, the age-old question of dynasty comes into play, with the old doctor wanting to see his son follow in his footsteps and seeing Muhyiddin as the perfect patsy to allow him to do so. So, with the old man, number two and the chosen son waiting impatiently to nudge him off the edge, the stakes are, indeed, very high for Najib.
Hence the need to be janus-faced, the need for hypocrisy. That is, the need to talk of 1Malaysia and Transformation, on the one hand, to appeal to a more aware, worldly-wise and growing Malaysian middle class.
And, on the other, to play on old, racist sentiments, warning the Malays, as he did on Malaysia Day, that “the 13th general election is not an ordinary election. Instead, it will determine the survival of the Malays.”
Yet again, revealing the desperation. Such desperation is also noticeable among the also-rans, the no-hopers, in the BN. Which is why we see the MCA, evidently devoid of anything of substance, reduced to a father and son act of… desperation.
The senior Chua Soi Lek, like a broken record, seems totally obsessed with two things - well, actually three, but this is a family-oriented column – the DAP and hudud. Day in and day out, his favourite newspaper (The Star), the one that his party owns, repeats his rants about voting for the DAP and getting parts of your anatomy chopped off as a consequence.
His son, on the other hand, evidently has a fixation for the Selangor Menteri Besar when, perhaps, as Deputy Agriculture and Agro-based industries Minister, he could serve us better by looking more into the National Feedlot Corporation (NFC) scandal.
Answers still not forthcoming
Speaking of scandals, the financial mismanagement ones really are the bugbears increasing the desperation of the regime. There are, of course, so many that have not been resolved, where answers are still forthcoming.
But, straight off the top of our heads, we can think of at least two – the NFC cows, cars and condos scandal and the more expensive, possibly more damaging, Scorpene submarines scandal.
Many times previously, the regime has depended on a compliant, self-censoring mainstream media and the rakyat collectively having a short memory to, somehow, minimise, even eliminate, the implications of these misappropriation of public funds.
This time around, however, this strategy doesn’t appear to have succeeded. Some argue that it’s because of the existence of the alternative Internet news media and social media.
Others credit the work of resilient whistleblowers, such as PKR’s Rafizi Ramli (left), and the regime’s current punching bag, SUARAM, for bringing these alleged abuses out into the open.
While all this may be true, like a small group of film students at my university, a group with a warped sense of humour, I think it’s the imagery that has made these two scandals stick in our minds.
The imagery, that is, of cows living in condos and driving to the farm in luxury cars. The imagery also of submarines that can’t dive.
Whatever it may be, these ‘irritants’, these ‘noises’ are extremely difficult for the regime to shut off, leading to much consternation and increasing desperation.
So, the regime’s ‘strategic team’ – what, I think, in the days of the Cold War and even Watergate they called the ‘dirty tricks department’ – is called up. They, in turn, dig not so deep into their mouldy bag of tricks and come up with what they believe will scare the living daylights out of all us – especially those of us who have no access to the outside world, beyond that provided by newspapers like Utusan Malaysia and Berita Harian and TV stations like the Media Prima quartet of TV3, NTV7, TV8 and TV9 and that dinosaur, RTM.
And, of course, although many of us would probably have never bumped into a Jew in our lives, most likely won’t, and wouldn’t know that we had done so even if we did, the Jewish bogey is pulled out of the bag. I did say it was a mouldy old bag, didn’t I?
Okay, so it’s quite obvious that I don’t buy all that Jewish conspiracy nonsense. But I’ll share a little secret with you, strategic team: even my 86 year-old mother down South doesn’t believe you.
She, too, thinks that you’re getting extremely desperate and that it’s making you act like a bunch of nincompoops. You must forgive my mother; she’s old school, indeed a retired school teacher, and tends to use more halus words instead of ‘moron’ and ‘bangang’.
No longer works now
But, the point here, I guess, is that there’s a pretty unoriginal team of spinners at work here. What may have worked 20, even 10, years ago no longer works now. Even on the ‘ignorant masses’ in the hinterland.
If it did, March 2008, despite all the reported fraud taking place – all the phantom voters, the dead 100-plus year-olds rising up from their graves just to vote – would not have happened. If it did, the makciks and pakciks would not have been there, marching on the streets of KL, asking for clean and fair elections.
If it did, the 13th general elections would have been announced – and possibly held – ages ago. If it did, such desperation on the part of the regime would no longer be necessary.
The recent uncorroborated, shameful and absolutely baseless allegations about international conspiracies and takeover plots illustrate one simple situation – sheer desperation.
And it is clear that those politically-owned media unethically concocting and sensationalising these allegations would not have dared to make such allegations had they not been owned and controlled by their BN political masters.
Thus, we can safely assume that hidden hands were – and still are – at play. Indeed, as one of their shameless spinners put it on Friday: Nothing personal, as any politician would say, purely the business of politics.
But why the desperation? Indeed, after dishing out millions of OUR money in the form of BR1M, cash handouts to students and pensioners – and even more being dished out in Friday’s Budget – why, indeed, is this regime still scared of facing the rakyat in the 13th general election?
So scared that, despite declaring and bragging that it is a democracy, it hits out at genuine pro-democracy civil society organisations with much-prouder records than the regime has ever had.
Well, perhaps now is a good time to remind ourselves – and those who are still unsure – why this regime is, indeed, feeling desperate. First, in the March 2008 elections, it lost its two-thirds majority in Parliament and also saw five states (until Perak was ‘recaptured’ under dubious circumstances) and the Federal Territory of Kuala Lumpur fall to the Pakatan coalition.
Now, that was a bitter pill to swallow. And, certainly, there was hell to pay, as the then-Prime Minister, (Tun) Abdullah Ahmad Badawi, soon found out. Indeed, about a year later, he was not so much shown the door as he was virtually booted out by the same men and women who, after the virtual landslide victory for BN in 2004, had seen Pak Lah as their saviour.
With the possible exception of that wily old fox, Dr Mahathir, of course. Dr M was always rather lukewarm towards Pak Lah as PM and, by the end of Pak Lah’s short tenure, was already laying into him, blaming him for virtually everything that had gone wrong with BN and UMNO.
Work cut out for him
So, when Najib was handed the post of Prime Minister in 2009, he really had his work cut out for him. He had inherited a coalition that was very much lopsided in nature, with a virtually decimated Gerakan and MIC limping badly, and an MCA that, equally, was having its fair share of internal problems.
And, of course, within his own party, UMNO, the numerous warlords needed appeasing, evidently led by, you guessed it, that old doctor who always seems to be in the house.
Top of the wish list for virtually all of these interested parties within UMNO and the BN was – is - a return to the good ol’ days of having a two-thirds (or above) majority in the Dewan.
Najib knows that. He knows that anything less will, most likely, see his neck on the chopping block. Many believe that he’s been putting off the GE or, indeed, telling us all exactly when it will be held, precisely because he has thus far not received one single assurance, from inside or outside the party, that Barisan Nasional will get back the two-thirds majority.
Next, of course, is the intense political rivalry and the ambitions, especially within UMNO. It’s widely believed that Najib and his Deputy both covet the top post. Number two, Muhyiddin, now, apparently, has that old doctor and party reactionaries and conservatives backing him and a narrow ‘I-am-a-Malay-first’ agenda.
Again, the age-old question of dynasty comes into play, with the old doctor wanting to see his son follow in his footsteps and seeing Muhyiddin as the perfect patsy to allow him to do so. So, with the old man, number two and the chosen son waiting impatiently to nudge him off the edge, the stakes are, indeed, very high for Najib.
Hence the need to be janus-faced, the need for hypocrisy. That is, the need to talk of 1Malaysia and Transformation, on the one hand, to appeal to a more aware, worldly-wise and growing Malaysian middle class.
And, on the other, to play on old, racist sentiments, warning the Malays, as he did on Malaysia Day, that “the 13th general election is not an ordinary election. Instead, it will determine the survival of the Malays.”
Yet again, revealing the desperation. Such desperation is also noticeable among the also-rans, the no-hopers, in the BN. Which is why we see the MCA, evidently devoid of anything of substance, reduced to a father and son act of… desperation.
The senior Chua Soi Lek, like a broken record, seems totally obsessed with two things - well, actually three, but this is a family-oriented column – the DAP and hudud. Day in and day out, his favourite newspaper (The Star), the one that his party owns, repeats his rants about voting for the DAP and getting parts of your anatomy chopped off as a consequence.
His son, on the other hand, evidently has a fixation for the Selangor Menteri Besar when, perhaps, as Deputy Agriculture and Agro-based industries Minister, he could serve us better by looking more into the National Feedlot Corporation (NFC) scandal.
Answers still not forthcoming
Speaking of scandals, the financial mismanagement ones really are the bugbears increasing the desperation of the regime. There are, of course, so many that have not been resolved, where answers are still forthcoming.
But, straight off the top of our heads, we can think of at least two – the NFC cows, cars and condos scandal and the more expensive, possibly more damaging, Scorpene submarines scandal.
Many times previously, the regime has depended on a compliant, self-censoring mainstream media and the rakyat collectively having a short memory to, somehow, minimise, even eliminate, the implications of these misappropriation of public funds.
This time around, however, this strategy doesn’t appear to have succeeded. Some argue that it’s because of the existence of the alternative Internet news media and social media.
Others credit the work of resilient whistleblowers, such as PKR’s Rafizi Ramli (left), and the regime’s current punching bag, SUARAM, for bringing these alleged abuses out into the open.
While all this may be true, like a small group of film students at my university, a group with a warped sense of humour, I think it’s the imagery that has made these two scandals stick in our minds.
The imagery, that is, of cows living in condos and driving to the farm in luxury cars. The imagery also of submarines that can’t dive.
Whatever it may be, these ‘irritants’, these ‘noises’ are extremely difficult for the regime to shut off, leading to much consternation and increasing desperation.
So, the regime’s ‘strategic team’ – what, I think, in the days of the Cold War and even Watergate they called the ‘dirty tricks department’ – is called up. They, in turn, dig not so deep into their mouldy bag of tricks and come up with what they believe will scare the living daylights out of all us – especially those of us who have no access to the outside world, beyond that provided by newspapers like Utusan Malaysia and Berita Harian and TV stations like the Media Prima quartet of TV3, NTV7, TV8 and TV9 and that dinosaur, RTM.
And, of course, although many of us would probably have never bumped into a Jew in our lives, most likely won’t, and wouldn’t know that we had done so even if we did, the Jewish bogey is pulled out of the bag. I did say it was a mouldy old bag, didn’t I?
Okay, so it’s quite obvious that I don’t buy all that Jewish conspiracy nonsense. But I’ll share a little secret with you, strategic team: even my 86 year-old mother down South doesn’t believe you.
She, too, thinks that you’re getting extremely desperate and that it’s making you act like a bunch of nincompoops. You must forgive my mother; she’s old school, indeed a retired school teacher, and tends to use more halus words instead of ‘moron’ and ‘bangang’.
No longer works now
But, the point here, I guess, is that there’s a pretty unoriginal team of spinners at work here. What may have worked 20, even 10, years ago no longer works now. Even on the ‘ignorant masses’ in the hinterland.
If it did, March 2008, despite all the reported fraud taking place – all the phantom voters, the dead 100-plus year-olds rising up from their graves just to vote – would not have happened. If it did, the makciks and pakciks would not have been there, marching on the streets of KL, asking for clean and fair elections.
If it did, the 13th general elections would have been announced – and possibly held – ages ago. If it did, such desperation on the part of the regime would no longer be necessary.
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