Budget 2011: A budget for the big boys and civil servants

By Dr Lim Teck Ghee

There are several ways to analyze the budget. One is to take at face value what the Prime Minister has written in his blog just before his budget speech where he promised that it is “a budget by the rakyat”. By it, he explained that he had read through the more than 1,000 comments and suggestions from his readers and forwarded them to the Ministry of Finance to incorporate.

According to the PM, there were three key issues raised – employment, taxes and subsidies, and education.

In his words, “employment was the most frequently discussed with some of you calling for the implementation of a minimum wage policy”. Also, he noted that “comments from the youth requested for increased tax rebates for young families or ways to provide financial assistance in managing the rising cost of living”. As for education, the feedback on his blog related to concerns with education quality and the rising cost of education.

Now that the budget has been unveiled, it is clear that the civil servants preparing the budget have completely ignored the Prime Minister. Firstly, the implementation of the minimum wage policy has been further deferred for the umpteenth time. The only beneficiaries of wage reform appear to be security guards who deservedly see their minimum wages raised and female civil servants who will now have longer maternity leave.

As for education, whilst there is a substantial allocation to cater for recurring operational expenditure and some new infrastructural spending, there is nothing new in the budget that can allay the number one concern of middle-class Malaysians. Especially disappointing is the failure to grant relief for private higher education costs which are rising steeply.

Given the trend, it looks like higher education will soon be affordable only to those that can get into the public universities or those who have wealthy parents – and also perhaps those that can draw on financing from family members and Ah Longs.

Affordable housing has been very much in the news even if there have been few letters to the Prime Minister on the topic. It is now beyond the reach of many in the younger age group living in the larger towns and especially in the Klang Valley. There is no evidence in the budget of any official concern to tackle the problem.

There are also no measures aimed at curbing the rising cost of living. Why is there a lack of attention to addressing the rising costs of housing, transport and health as well as food? Part of the reason is the government’s Alice in Wonderland estimate of inflation – it has projected a figure of 2-3 per cent for the year. Further, according to the government’s estimate, Malaysians will be quite a bit wealthier in 2011 compared with 2010. Per capita income is expected to go up by 6.1 per cent to RM28,000, and income in terms of purchasing power parity will hit US$16,000.

This is of course data which does not reflect real life – just a hypothetical average. The majority of Malaysians will, in fact, not only feel but will indeed be poorer rather than richer in 2011 given the relentless rise in cost of living that is not reflected in the inflation data.

One group though that will not be poorer will be the big guns benefiting from the slew of mega projects contained in the budget. They include the planned erection of a RM5 billion tower. This is a potential monstrosity which will serve little purpose except bring to a standstill traffic in that congested part of the city. It is obscene that this is being done in the name of honouring the country’s heritage.

Hopefully citizen groups, residents in the area and heritage organisations can organise and bring pressure to bear on the government to stop this project before it gets off the ground.

As evidence of how poorly conceived the budget planning process has been, it should be noted that the budgeted amount for the year for all the corridor projects – which is supposed to help decentralise development and increase rural incomes and well-being in the other parts of the country – is only one-third of that allocated for this massive planned erection.

Other big ticket items such as the MRT may be economically more justifiable but they have to be closely monitored for the way in which project design, contractors and partners are selected. Already, there is talk of pre-determined winners even before the process of proper technical studies, evaluation and selection has commenced.

It is disappointing that the budget does not deal at all with the procurement issue which has resulted in wastage, inefficiency and higher costs to the average Malaysian in the last 30 years. Presumably we are going to see business as usual in the tenders for Private-Public Partnership projects and the continuation of “privatized gain and socialized losses”.

Another concern is that much of the budget continues to go into operating a bloated civil service. As much as three quarters of the national budget is spent on paying salaries and other benefits to over 1.3 million civil servants.

This means that of every dollar spent in the budget, 75 sen goes towards manning the civil service, leaving little left to carry out development work that can benefit the country’s population. There is clearly something fundamentally wrong in the way the country’s budget is being spent when so much of the allocation goes to paying for a sector that is generally regarded as unproductive and standing in the way of efficiency.

Finally, this is a budget that is touted as being friendly to business. The question is not only which and what businesses will benefit but also whether the projects undertaken will benefit the country.

From the listed projects, it appears that we are returning to the era of mega high-status, expensive projects which will provide little value-added to the Malaysian economy. Projects such as the proposed RM5 billion tower should be scrapped, and the resources spent instead on the expansion of public housing, transport, health and other badly needed amenities and services that can truly benefit the ordinary people.

  1. #1 by dagen on Saturday, 16 October 2010 - 10:30 pm

    “This means that of every dollar spent in the budget, 75 sen goes towards manning the civil service, leaving little left to carry out development work that can benefit the country’s population. There is clearly something fundamentally wrong in the way the country’s budget is being spent when so much of the allocation goes to paying for a sector that is generally regarded as unproductive and standing in the way of efficiency.”

    Wrong observation there.

    No other country in the world could a goverment pump money into the spending side of the country’s economy so directly like unmo!

  2. #2 by raven77 on Saturday, 16 October 2010 - 10:35 pm

    Its a win win budget for Najib and BN….

    They get to spend the money and at the same time keep the rip off while bankrupting the country for the incoming PR govt in 2013…

    Its the last call for BN to tear into the treasury ruthlessly…the army should step in….national security is at stake.

  3. #3 by sheriff singh on Saturday, 16 October 2010 - 10:56 pm

    Idris Jala is wrong. We won’t go bankrupt in 2019.

    Najib will bankrupt us by 2012.

  4. #4 by Loh on Saturday, 16 October 2010 - 10:56 pm

    Non-productive though public sector is, the salary and emoluments do contribute to GDP. And the government is quick to quoted PPP (purchasing power parities) value. It means that when you spend one ringgit in Malaysia, you could feel as though you spend 16/28 US dollar. But when you go can change one ringgit for us Dollar you get 10/31 US dollar. So it is nice to talk about spending in US in Malaysia, but not outside.

    The twin towers were funded by Petonas. But the more important use of Petronas money was to make somebody easy money buying the race course land and selling it to Petronas. Who is going to gain from the sale of land for the 5-Billion-Ringgit-Tower? Well, the Tower needs not be built, but the land must be bought. If PKFZ is an example, the Tower could cost 50 billion.

  5. #5 by boh-liao on Sunday, 17 October 2010 - 12:21 am

    Big fat mama Los wanted her hubby 2 build a 100-storey phallic symbol 2 satisfy her desire

  6. #6 by HJ Angus on Sunday, 17 October 2010 - 12:45 am

    I find the RM65mil approved to renovate the PM’s residence a blatant abuse of funds. Where is the justification?
    Already the cost of government is blatantly obscene and needs to be curtailed.
    This budget points to a definite early polls; possibly within the next 3 months.

  7. #7 by dawsheng on Sunday, 17 October 2010 - 1:46 am

    There are several ways to analyze the budget. – Dr. Lim

    Let me see. For past many years since Merdeka the BN government had spent hundreds of billion, probably trillion of ringgit by now and still we have got many problems unsolved. For many of us we couldn’t even understand what it means to have this enormous amount of budget, let alone to analyze it several ways. However, one thing is quite consistent at our end and that the money isn’t flowing our way. So don’t waste time analyzing it, only anal do that. The only way to make the money game to our advantages is to change the government.

  8. #8 by House Victim on Sunday, 17 October 2010 - 7:00 am

    The hands are not only into the “Budget” but as usual also the EPF. And, Government Land, and, moving PF into “Private” hands!!


    EPF + Rubber Research Institute into “Joint-Venture”!!
    EPF into PPF (Private Provident Fund)!!

    So, even UMNO does not run the Government, the PF will still be within their reach!!

  9. #9 by yhsiew on Sunday, 17 October 2010 - 7:06 am

    The 1% increase in service tax is probably good enough to cover revenue loss due to not hiking highway toll fares in the next 5 years – this is a zero sum game.

    Why after everybody has possessed a handphone (handphones to population ratio is about 110%) the government only allows duties exemption for new ones? Shouldn’t the government do it when handphones first made their public appearance in Malaysia?

    The government is not sincere in lifting up the financial burden of the rakyat.

  10. #10 by undertaker888 on Sunday, 17 October 2010 - 8:06 am

    Rm5,000,000,000 by the rakyat budget for a tallest tower? Which frigging rakyat need a 5B tower? This is not a budget for the rakyat. This frigging budget is for rosmah and rakyat umno.

  11. #11 by Loh on Sunday, 17 October 2010 - 8:15 am

    5 billion ringgit for a 100-storey building is 50 million a storey. At the construction cost of 2 hundred ringgit a square foot, the built up area per floor should measure .25 million square feet, or five acres per floor. Five billion ringgit should produce 25 million sq feet, or 25, 000 units of 1,000 sq feet condo. If each unit houses 4 persons, and each with 1 car, then one can expect 100,000 units of car in that area. Comparing to the congestion at the old Pudu bus station, The 5 billion-ringgit tower would certainly be a new tourist site for Malaysia.

    The government can certainly reduce the number to say 20,000 cars by building a slimmer tower of say the width of one acre instead of 5, making the cost at 1,000 ringgit a sq ft. The product is not important, but the process ending up with a building is.

    If Najib ask for comment on how to use the 5 billion ringgit alloted, he should have an interesting read. But most heads cannot accommodate 10 digit number. When most renovation for houses do not cost 65,000 ringgit, but Najib’s official residence costs 65 million. That is good for renovating 1,000 housing unit. Has Najib 1,000 rooms his residence.

  12. #12 by DAP man on Sunday, 17 October 2010 - 9:19 am

    The question is, “How will this budget benefit me?”
    Zero benefit. I hardly use the highway. I have 3 old hand phones given by my children so I won’t need to buy a new one.
    Meanwhile, I will be spending more on utility and food bills, medical check ups and supplements.

    Najib has completely ignore education and that will mean more spending on private tuition fees.
    I hope UMNO and Perkasa supporters will be proud that they will get to marvel at the 100 storey tower that will reflect Malay Supremacy.(Never mind about unemployment or food price)
    The tower must be called “Ketuanan”.

  13. #13 by cemerlang on Sunday, 17 October 2010 - 9:22 am

    When you see the Stadium Negara, you remember Tunku Abdul Rahman. When you see Putrajaya, Cyberjaya, KLCC, KLIA, you remember Tun Mahathir Mohamad. When you see this yet to be Warisan Merdeka, you will remember Dato’ Najib. Then when the tourists come you will proudly introduce these monuments and that is the impression the world has on Malaysia. Like when you go to another country and you are introduce to this and that. It has the money to do all this. Money is power. Can you see all those implications ? The relationship between this unknown Malaysia and the world ? Big boys. Big games. Big. Big. Big.

  14. #14 by Thor on Sunday, 17 October 2010 - 10:00 am

    When you see this yet to be Warisan Merdeka, you will remember Dato’ Najib. -cermelang

    He’s already famous worldwide with “mongolian Atan” so why need Warisan Merdeka?
    I could only see salivas drooping out from his mouth when he mentioned about that tower.
    That’s all!

  15. #15 by k1980 on Sunday, 17 October 2010 - 10:14 am

    Why waste RM5billion for Warisan Merdeka, the tallest tower in malaysia?

    Why not take the 2nd petronas tower and pile it on top of the first to get the tallest tower in the UNIVERSE?

  16. #16 by on cheng on Sunday, 17 October 2010 - 7:56 pm

    The most exorbitant is not the 100 storey tower, but the 40 billion MRT for K.L, if it is only 140km, it works out to be RM285,000 per metre, China built the super high speed train from Wuhan to Guangzhou, many bridges, tunnels, at only RM56 billion (960km). Following super train costs for comparison, all in RM
    a) Wuhan-Guangzhou, 56 billion, 960 km, 58,000 per metre. Many bridges, tunnels.
    b) Taipei- Kaohsiung, 48 billion, 360 km,
    133,000 per metre, include many land aquisition cost.
    c). Proposed Ho Chi Minh Vity- Hanoi, 176 billion, 1680km, 105,000 per metre. Vietnam postpone indefinitely, no money.
    40 billion is more than the proposed super train to Singapore.
    Anybody have an explanation for my question?

  17. #17 by sheriff singh on Sunday, 17 October 2010 - 11:15 pm

    They have to pay a lot of middlemen and sub-cons and cons and ah longs.

    Don’t forget Jho Low’s entertainment and living expenses and Rosmah shopping bills and excesses.

  18. #18 by dagen on Monday, 18 October 2010 - 9:41 am

    40billion for mrt does seem pricey. In fact very pricey. Going by umno’s standard inflation formula (i.e. lapif or in full, the laptop price inflation formula) the actual cost is only 2billion.

    Jib is attempting a dr mamak stunt in a time-compressed fashion. It worked for dr mamak during his days (well, seemingly so). You see on the one hand, cronies got fed well and good. They are happy. On the other hand, stupid voters were fed with good reasons to be awed by umno – the party that glorify the nation in the eyes of the world with world first, world largest, world tallest, world this and world that.

    Jib, dr mamak had a lot of our money to throw. Our coffer was full then. Not anymore, dude. Not now. Not since 1998! And jib, a lot of dr mamak’s expansive glorification projects have either failed or are failing. So the awe factor is no longer available to serve as a booster to umno’s image, position and status as a political party.

    BTW anyone here interested to join me in the two dollar company I intend to set up – you know to own the other share – for the purpose of negotiating for the 100 floors tower. My reliable source told me that lapif is applicable.

  19. #19 by Ray on Tuesday, 19 October 2010 - 6:25 pm

    “” Good Education is the Key thing”” >>getting Rakyat to read and it is the Recipe for Self Help(career etc) .’
    In Malaysia, Umno Racist Education was merely a system of Garbage In Garbarge Out….Islamic U Mara etc
    UMNOists practise UMNOism instead and thus became a weak nation full of tongkat Ibrahim ali ;abdullah badawi and Barbaric BN Cabinet ministers…
    BTW umNO Putra puteri ‘s son and daughters,Uncles or Undies; newphew or nices cousin and their $ $ empire cronies gangs member >> Indeed So Sorry ….”” You are Not welcome here””… except for depositing yr Ringgits.

    Mr Tan ZS had got no other choice option But th head down to Singapura MajuLah …A Democratic Meritocracy nation of One People,One Race and One Langauge, and …so Glad indeed to hear this good news…over here we welcome and really need this SMART guy for our nation building…. Bye2

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