Archive for category Budget Debate
By Teh Chi-Chang, CFA
REFSA (Research for Social Advancement)
Friday, 12 October 2012
We write to rebut Dr Lim Teck Ghee’s assertion that “There is little empirical research to back up what has become an increasingly popular line of argument” that blanket subsidies such as for cheap petrol and sugar “benefit upper-class Malaysians who consume much more than their poorer cousins”.
These are the basic facts:
The federal government subsidy bill is expected to exceed RM42 billion this year.
If we can agree that subsidies should go only to the poor, and we define the poor as the bottom 1/3rd of households, there will be 2.3 million households or nearly 10 million Malaysians who will get subsidies.
RM42 billion is enough to give these bottom 1/3rd of households RM1,650 per month – which will more than double their current incomes of RM1,500 per month!
— Foong Li Mei
The Malaysian Insider
Oct 07, 2012
Oct 7 — Tired of politicians’ mudslinging and dirty tricks? We are, too. Thankfully, the panelists at REFSA’s recent forum showed that our country still has political leaders who rise above the muck to focus on working for the best interest of Malaysia.
Her crisp and confident voice swept through the packed hall with grace and conviction. It was nothing like the ferocity fired from the top of the lungs that one has come to expect whenever a political figure is handed a microphone.
She emphasised that politicians should not be given full control of the country’s finances. She spoke of the need for an independent authority to release a pre-Budget report that serves as a reference point for the actual Budget, much like the Office of Budget Responsibility (OBR) in the UK.
She urged Malaysians to remain vigilant over government spending, and insist on having a say in how tax monies are spent. Read the rest of this entry »
[contd from The 2013 Budget: Najib’s Last Hurrah? (1)]
Taken as a whole, Malaysia appears to have accumulated debt rapidly even as it loses competitiveness and is thus precariously placed. The Budget Speech made no reference to these issues despite the urgency and importance of these facts to the economic health of the country.
A full and transparent accounting is imperative to permit the development of strategies to avoid a debt crisis of the type affecting many of the countries, large and small, in the EUROZONE.
Current Economic Developments and Prospects
The preliminary estimates of growth cited in the Prime Minister’s Budget Speech for the first half of 2012 are somewhat exaggerated and contradicted by recent economic indicators. Inflation has been under estimated and thus there is an illusion of a high rate of GDP growth in the first half of the year. What growth occurred can be largely attributed to expanded exports of oil and gas and an expansionary fiscal policy adopted in the Budget for 2012.
There are recent indications of a slowdown in exports resulting partly from weaknesses in global commodity markets; industrial output has also shown weaknesses. Growth in the second half of the year is likely to fall short of growth in the first half. Thus, the projected rate of growth of between 4.5 and 5.0 percent for the current year as a whole is unlikely to be achieved. A lower growth rate has implications for revenues; lower tax receipts will mean a higher deficit further compounded by rising public expenditures. Thus, the overall deficit for 2012 is almost certainly going to exceed the projected figure of 4.5 percent cited by the Prime Minister.
The claim that there was “robust private sector investment” is not supported. If anything, private sector players e.g. IPPs such as YTL, Genting Power etc., have divested. Read the rest of this entry »
PM Najib prides himself as the ‘Father of Transformation’ or ‘Bapa Transformasi’ because of the spate of transformation initiatives which he has launched since taking over as Prime Minister in 2009.
He has certainly transformed the Malaysian lexicon by introducing an alphabet soup of acronyms such as the ETP, GTP, NKRA, NKEA, SRI, NEM, BR1M and KR1M, just to name a few.
The expensive consultants who conceived of these terms have certainly benefitted from these transformation initiatives. But the positive impact on the man on the street is far less apparent.
While the Prime Minister still sounds positive about his transformation initiatives, his budget tells us a different story. Read the rest of this entry »
After the presentation of the 2013 Budget by the Prime Minister cum Finance Minister, Datuk Seri Najib Razak in Parliament last Friday, the Deputy Prime Minister, Tan Sri Muhyiddin Yassin praised the 2013 budget as “the best to date”, and such superlative praises have been taken up by the other Barisan Nasional leaders.
Muhyiddin also denied that the 2013 Budget is an “election budget”. No MP whether from Barisan Nasional or Pakatan Rakyat would agree with him. In fact, I don’t think Muhyiddin himself believes his own denial.
But whether the 2013 Budget will be remembered by Umno/BN leaders as “the best budget” in the past 55 years will depend on whether it is the “silver bullet” for Najib to win the 13th General Election with a two-thirds parliamentary majority or whether it would result in his becoming the last UMNO Prime Minister or a prelude for him to be toppled as UMNO President and Prime Minister in a repeat scenario like what happened to Tun Abdullah in 2009 – becoming the latest “trophy” of Tun Mahathir who would have the scalps of three DPMs and two PMs in the bag!
It is precisely because Najib has no confidence that the 2012 Budget, despite giving goodies for almost every sector of the electorate, would be the “silver bullet” that he has kept postponing the dissolution of Parliament and acquired the dubious record of being the Prime Minister without an elected mandate of his own for the longest period when compared to all the previous four Prime Ministers after Tunku Abdul Rahman, including his father Tun Razak, Tun Hussein Onn, Tun Mahathir and Tun Abdullah. Read the rest of this entry »
Call on all MPs, BN or PR, in Sabah, Sarawak or Peninsular Malaysia to support a RCI to assess whether dreams and aspirations of Sabahans and Sarawakians in forming Malaysia had been fulfilled or betrayed in past five decades
On the occasion of the 49th Malaysia Day, Catholic Bishop Datuk Cornelius Piong in his message questioned if a 49-year-old agreement symbolised by the Keningau Batu Sumpah to uphold religious freedom and other native rights and customs had been kept.
Piong said that 49 years ago leaders from the federation of Malaya promised the people of Sabah they would progress together and have their basic human rights protected, as part of a campaign to convince them to join forces and form Malaysia, with partner states Sarawak and Singapore.
The three key pledges Piong highlighted were guarantees that Sabahans would have freedom of religion, their native land would be safeguarded by the state government and the federal government would respect and protect Sabah local customs.
“Are these promises still being respected and honoured?” Piong asked in his Malaysia Day message.
He said: “The agreement was carved on an oath stone (Batu Sumpah Peringatan) which is still visible read and remembered.” Read the rest of this entry »
“More debt has been accumulated in six years than what took 48 years after Merdeka to accumulate.”
A Brief History
The Budget unveiled by the Prime Minister on September 28th , his fourth budget, contained no real surprises. It followed the broad pattern of previous Budgets presented since 1998, the year of the East Asian Financial crisis.
A constant feature of these Budgets has been the use of deficit financing to further the BN agenda of promoting the interest of its key constituents while maintaining a grip on the loyalty of its traditional supporters. Tax giveaways and subsidies were part of the instruments used.
Despite buoyant revenues from the exploitation of natural resources which provided almost a third of revenue, the Government has consistently ran deficits which contributed to the buildup of a mountain of debt. The initial rationale for deficit financing was to stimulate and revive the economy after the devastating set back resulting from the East Asia Financial crisis of 1998. Read the rest of this entry »
Dr Lim Teck Ghee
2nd October 2012
In their joint statement recently released on 28 September, IDEAS (Institute for Democracy and Economic Affairs) and not-for-profit research institute REFSA (Research for Social Advancement) drew attention to the “shocking federal government subsidy bill for 2012” which according to them is now expected to hit RM42 billion, a massive RM9 billion or 27% above the RM33 billion originally forecast for the year.
While it is true that subsidies have quadrupled in the past five years, and some of it is wasteful and not efficiently targeted at the most needy or priority sectors, the REFSA-IDEAS contention of the debilitating effects of subsidies on our economic health needs to be challenged.
Yes, blanket subsidies for cheap petrol and sugar do result in a degree of excessive and wasteful consumption. However the extent is debatable, and even if considerable, is not a sufficiently compelling reason for their immediate removal. Read the rest of this entry »
Oct 1, 2012
COMMENT Prime Minister Najib Abdul Razak has announced the second election primer budget full of goodies, extending from bonuses to civil servants to handouts to lower income households.
This budget is Najib’s latest fiscal effort to secure him a solid victory in the 13th general election that has to be held before the end of June next year.
The budget is a continuation of a historically unprecedented pattern of direct government transfers to woo political support that has broadened in scope, increased in amount and moved development policy from needs based initiatives to what appears to be a coordinated regime political survival programme.
Najib’s main campaign strategy to win political support has been to offer financial rewards, and he has used his position as premier in an attempt to buttress his political position.
With something for everyone, he is clearly trying to increase his popularity through a variety of populist initiatives. Given his priorities, will this budget actually secure his political fortunes? Read the rest of this entry »
By Kee Thuan Chye
01 October 2012
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. Read the rest of this entry »
— Kim Quek
The Malaysian Insider
Sep 30, 2012
SEPT 30 — Barisan Nasional’s election-orientated budget 2013 is disappointing because it concentrates on raining one-off cash on the electorate to ease their pain, while forgetting to address the ills that necessitate such profuse dosage of pain-relievers in the first place.
If the people are affluent and contended, do they need to be showered with such pacifiers; or alternatively, would the feeding of such sweeteners sway their decision on whom they are going to vote for?
Obviously there are vast masses of disgruntled electorate who are not happy with the current living conditions. They are unhappy because they find it increasingly difficult to make ends meet; and they are also worried about the worsening safety of their environment.
The common people are simply overwhelmed by a cost of living that forever is speeding far ahead of their slow moving income increment. Needless to say, our economy is in trouble. What’s wrong with our economy? Read the rest of this entry »
by Liew Chin Tong
Sept. 30, 2012
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).
Sep 28, 2012
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. Read the rest of this entry »
— Aspan Alias
The Malaysian Insider
Sep 30, 2012
30 SEPT — Najib Razak adalah Perdana Menteri pertama yang menjadi ketua negara yang tidak mendapat mandat kepimpinan beliau dari rakyat walaupun sesudah menjadi PM selama empat tahun. Beliau hanya meneruskan mandat Abdullah Badawi dan ini sudah cukup menunjukkan yang Najib menjadi PM dengan meminjam mandat Abdullah Badawi dahulu sahaja.
Najib memangnya tidak pernah di uji dalam kepimpinannya. Beliau selama ini mendapat kedudukan secara percuma dengan bermain dengan sikap “play safe” dan tidak pernah melalui ujian melalui krisis besar dalam kepimpinannya.
Najib mendapat segala-galanya dengan percuma dan menaiki kedudukan sekarang melalui permainan selamat dan tidak menunjukkan sikap tegas dalam mana-mana krisis yang telah dilalui oleh Umno.
Najib bermain politik mengikut resmi air, “di mana lekok di situ dia berhenti dan berkumpul”. Dia tidak pernah menentang arus semasa perlu menentangnya. Beliau akan sentiasa mengintai untuk memihak “the buttered side of the bread”.
Kali ini beliau telah berjaya menjadi Perdana Menteri dengan permainan selamat itu, tetapi sekarang sudah sampai waktunya beliau untuk membuat keputusan yang “decisive” untuk negara.
Tetapi malangnya beliau begitu lembek dan tidak berupaya melakukan apa yang sepatutnya beliau lakukan dalam krisis keyakinan rakyat yang sedang beliau lalui sekarang ini. Krisis keyakinan rakyat ini di tambah pula dengan masalah dalaman yang sedang dihadapi oleh Umno iaitu masalah keyakinan kepimpinan di bawah-bawah beliau serta ahli Umno keseluruhannya. Najib tidak mendapat dukungan padu dari barisan pimpinan Umno diperingkat tertinggi dan ahli-ahli Jemaah Kabinet yang bersama-sama membarisi kepimpinan dalam kerajaan. Read the rest of this entry »
— Lim Guan Eng
The Malaysian Insider
Sep 30, 2012
SEPT 30 — Even though many goodies where announced during yesterday’s Budget 2013 speech by Prime Minister Najib Tun Razak, this budget has failed the Malaysian people by not addressing three crucial areas which are necessary to guarantee the long term well-being of our country and its people — namely fiscal prudence, economic sustainability and cost of living increases.
Firstly, even though the budget deficit is projected to come down from 4.5 per cent in 2012 to a ‘mere’ 4.0 per cent in 2013, this figure masks the poor track record of the BN government in sticking to its spending plans.
For example, total expenditure for Budget 2012 was announced at RM232.8 billion in last’s year’s budget speech. But in this year’s Economic Report 2012 / 2013, total expenditure for 2012 is projected to total up to RM252.4b.
This is almost RM20b more than the projected expenditure announced last year. We were fortunate that projected revenue is expected to be RM207 billion for 2012, RM20 billion more than the RM186.9 bilion projected revenue announced last year. Without this tax ‘windfall’, our budget deficit would have ballooned up to 6.7 per cent of GDP rather than the projected 4.5 per cent for 2012.
But we cannot expect that actual revenue will continue to exceed projected revenue especially given the slowing global economy. Furthermore revenue from oil related tax revenue is likely to decrease given the change in the dividend policy of Petronas as well as political uncertainty in Southern Sudan which could decrease Petronas’s bottom line by as much as US1 billion. Read the rest of this entry »
2013 Budget hides a very unconfident Najib who is haunted and hounded by the phobia that his fourth budget speech may be the last Umno/BN budget in Parliament
Deputy Prime Minister Tan Sri Muhyiddin Yassin’s barefaced denial yesterday that Prime Minister Datuk Seri Najib Razak’s 2013 Budget was an “election budget” illustrated what is wrong with the UMNO/Barisan Nasional government after 55 years in power – that the Umno/BN government leaders suffer from the dual terminal ailments of denial complex and unprecedented credibility gap.
Even UMNO/Barisan Nasional Ministers, MPs and members would not believe Muhyiddin’s brazen denial that Najib’s 2013 Budget was not an “election budget”.
Why then is the Deputy Prime Minister making a denial that is completely bereft of credibility, whether in Pakatan Rakyat or Barisan Nasional camps?
The only answer is that UMNO/BN leaders continue to suffer from the false sense that they could transform Malaysian politics into a world of make-believe and get ordinary Malaysians to believe what the UMNO/BN leaders decreed, although totally divorced from the world of reality.
It is because of this misguided and misplaced complex that caused UMNO/BN leaders to continue to deny that the growing fear of crime among Malaysians as well as rampant corruption in the country are major problems in the country, falling back on discredited GTP and NKRA statistics and claims of falling crime index and progress in the war against corruption. Read the rest of this entry »
— Gomen Man
The Malaysian Insider
Sep 29, 2012
SEPT 29 — Is this it? This is not a Budget, what was announced yesterday by Finance Minister Najib Razak was vote-buying through the liberal use of taxpayers’ funds.
Yesterday was making Malaysians more addicted to handouts, the opiate of the masses.
Idris Jala, aka the salesman, can talk all he wants about GST and Malaysia’s readiness to wean itself of subsidies and Najib can go on about cutting the budget deficit but this government did this country a great disservice yesterday: it mortgaged the future for short-term gain.
And it also did the virtually impossible: it cut taxes, gave out more money and said that it would still cut the deficit. Najib should bottle this miraculous potion and sell it to the US. Read the rest of this entry »
Review by Lee Wei Lian
The Malaysian Insider
Sep 29, 2012
SEPT 29 — Now that both Budget 2013 from the ruling coalition and the shadow budget from the opposition have been presented, let’s take a look at how the two budgets stack up against one another.
This is the last budget before the general election and the stakes are high. Barisan Nasional (BN) has had a lot of experience in crafting budgets and surprised no one when it dished out cash and other goodies, particularly to the younger generation who are a significant chunk of the newly registered electorate and are an unknown quantity in terms of their voting inclinations.
It scored some points however for not going overboard with spending as expected by some economists and still managed to pare down its expected budget deficit to four per cent from an estimated 4.5 per cent this year.
Pakatan Rakyat (PR) is a relative novice when it comes to federal budgets and presented one that appears to be much more geared toward reforming the economy than the one from the Najib administration which appeared to have more-of-the-same type policy tinkering rather than sweeping fundamental changes.
Read the rest of this entry »
By Amin Iskandar, Hafidz Baharom, Md Izwan and Nomy Nozwir
The Malaysian Insider
Sep 29, 2012
KUALA LUMPUR, Sept 29 — Voters have grown more discerning and are unlikely to be swayed by cash incentives and other one-off perks into casting their ballot for the Barisan Nasional (BN) government at national polls due soon, pundits said in weighing in on the impact of Budget 2013.
Political observers interviewed by The Malaysian Insider wholly agreed that the RM251.6 billion announced yesterday, which promised a slew of cash handouts and tax cuts spread across the board, was trained to appeal to key demographic groups in the run-up to the 13th general election, but said voters had become increasingly shrewd and capable of weighing the short-term personal gains against the long-term fiscal impact on the national economy.
“There are only two words to describe it — election budget,” said Monash University’s political science lecturer James Chin.
He noted that Prime Minister Datuk Seri Najib Razak has “pulled out all the stops and given the voters their sentiments, to let them think twice about voting for the opposition” in elections that must be held by next April when BN’s five-year mandate won in March 2008 runs out.
“People will compare the budget to Pakatan Rakyat’s and will also see how the second round of Bantuan Rakyat 1Malaysia (BR1M) will fuel inflation,” Chin added. Read the rest of this entry »
— Aspan Alias
The Malaysian Insider
Sep 27, 2012
27 SEPT — BN dan Pakatan Rakyat memperagakan bajet 2013 masing-masing. Pihak Pakatan Rakyat telah membentangkan bajet bayangannya dua hari sebelum Najib membentangkan bajet pihak BN. Najib akan membentangkan bajetnya pada Jumaat ini dan dijangka bajet itu adalah bajet pilihanraya. Tanda-tanda bajet itu akan memasukkan banyak peruntukan pemberian tunai kepada rakyat itu adalah jelas dan telah pun diakui oleh beberapa orang pemimpin-pemimpin BN.
Itu tidak memeranjatkan sesiapa kerana Najib begitu popular dengan membeli hati dan jiwa rakyat dengan wang ringgit. Bagi Najib bayar sana, bayar sini adalah cara yang beliau selalu lakukan baik dalam kerajaan mahu pun didalam kegiatan parti. Najib mentadbir kerajaan seperti beliau mentadbir Umno bahagiannya di Pekan.
Dalam pada itu PR juga mengemukakan bajet pihaknya untuk membezakannya diantara bajet yang selalu di bentangkan oleh BN. Beberapa pemimpin kerajaan termasuk menteri-menterinya telah mengkritik bajet Pakatan Rakyat dan menuduh PR sedang cuba untuk menarik undi dan bajet anjuran PR itu adalah bajet yang tidak realistik.
Saya hanya hendak memberi komen tentang isu realistik atau tidaknya bajet PR yang di katakan oleh pemimpin samseng BN seperti Nazri Aziz dan beberapa “hulubalang” BN itu sebagai bahan lawak itu. Nazri membuat komen yang tidak beretika sehinggakan dia mengatakan bajet anjuran PR itu adalah bajet bodoh. Bagi saya hanya orang bodoh sahaja yang mengenali si bodoh yang lain. Read the rest of this entry »