Prime Minister-cum-Finance Minister Datuk Seri Najib Razak’s 2012 Budget achieved many “firsts” in Malaysian parliamentary and budgetary history.

First, it beat all the other 53 budgets since 1957 in being the greatest cornucopia of goodies for votes in the forthcoming 13th general elections to reach out for voter support from a whole swathe of targetted groups comprising important vote-banks.

Second, it ranks at the most brazen and cynical budget exercise chalking up the highest Federal Government debt in history – set to break the RM500 billion mark next year, when for 2011, the Federal government debt to GDP (Gross Domestic Product) ratio of 53.8% has increased by 12% from RM 407 billion 2010 (i.e. 53.1% of GDP) to RM456 billion in 2011.

After 13 consecutive years of budget deficit, the Federal Government debt has increased by leaps and bounds – more than quadrupling from RM103 billion in 1998 when it was 38.3% to GDP to RM455.7 billion in 2011 or 53.8% to GDP.

Thirdly, in painting an overly-rosy picture of the economic future without taking into realistic account the grim international picture.

Never before has any budget met with so many “nay sayers” among economists, market analysts and even banks with regard to its projections of economic growth, dismissing Najib’s growth figures as too high.

The leading “nay sayer” is the RHB Research Institute whose growth projection is significantly lower than Najib’s forecast of five to six per cent for 2012 – warning that Malaysia’s economic growth could slow to just 3.6 per cent next year from a projected 4.3 per cent this year due to the increasing risk of a double dip global recession.

The research house said that the risk of a double-dip global recession is high and rising as both the US and Europe cannot withstand another shock although a recession could be averted if leaders in both continents act fast enough to contain the debt crises and avert a contagion that could lead to a complete meltdown in confidence.

Bank of America Global Research estimated Malaysia’s gross domestic product (GDP) to grow at 4.2 per cent in 2012 while Maybank Investment Bank said it expected Malaysia’s GDP to expand at between 3.5-4 per cent. CIMB Investment Bank forecast a GDP growth of 3.8 per cent next year.

Writing on Najib’s “rosy growth projections” in his 2012 Budget, commentator Ong Kian Ming warned:

“If nominal GDP growth rates for 2011 and 2012 were cut by between 1% to 2%, the projected government deficit to nominal GDP would increase to 5.3% to 5.6% from the 4.7% announced. This can easily increase to beyond 6.0% if a supplementary budget of RM10b is passed after the 2012 Budget, especially if another ‘stimulus’ package is seen to be needed.”

Fourthly, another “first” for the 2012 Budget is that it is probably the most misleading and deceptive when compared to all the previous budgets. Its theme is “National Transformation Policy: Welfare for the Rakyat, Well-being for the Nation” but it has failed in effecting any national transformation to pave the way for Malaysia to become a developed and high-income nation by 2020.

This is because the inequitable and corrupt system which bred decades of injustice, inequality and exploitation remains completely untouched.

The 2012 Budget is designed to win the next general elections for Najib and not to reform and transform the country’s system, structures and institutions to end the rot which has seen Malaysia losing out in international competitiveness and being overtaken by more and more countries in national, economic and human resource development including in South East Asia.

Speech (1) in Parliament on the 2012 Budget on Monday 17th October 2011