With corruption costing our country RM10bn a year and government overspending and wastage going as high as RM28bn, it is critical to plug the ‘leakages’ and curb corruption, says Steven Sim.
As Prime Minister Najib Razak prepares to table the 2014 Budget on 25 October, Pakatan Rakyat has already started to provide our analysis of the country’s economy and fiscal position.
We began by issuing a statement on 24 September in Parliament – by Nurul Izzah representing PKR, Hatta Ramli representing Pas and me, representing DAP – highlighting the worrying state of our country’s deficit. Last year, Najib had promised to reduce the deficit to 4 per cent.
However, with the tabling of the first supplementary budget for 2013 this week amounting to RM15bn, the deficit to GDP ratio is expected to rise to 5.5 per cent., way above the Prime Minister’s projection. In 2012, the federal government also failed to keep to its deficit projection of 4.5 per cent when it recorded a deficit of 4.9 per cent of GDP. And to the uninitiated, this is the 16th consecutive year of deficits spending by the federal government.
In July, Fitch Ratings reduced Malaysia’s sovereign outlook from “stable” to “negative”, citing among others, fiscal mismanagement including our rising debt, now at 53.3 per cent of GDP. With the current trend, we fear that the government will eventually hit their own debt ceiling of 55 per cent very soon. And if we take into consideration what has been called “contingent liabilities”, that is, guarantees by the government on borrowings by other entities which the government is obligated to repay in case of default, government debt may hit 70 per cent of the GDP.
With the recent reduction in fuel subsidy, the government essentially confessed to their own misallocation of resources. While we agree to a more targeted assistance to the needy, the government’s isolated act of sudden withdrawal of fuel subsidy not only caused a shock to the market resulting in ensuing inflation, the higher fuel price and the lack of public transport system caused tremendous difficulties to many especially those from the working class.
With corruption costing our country RM10bn a year, and government overspending and wastage going as high as RM28bn a year, what is more “rational” to do now is to plug the leakages in government spending and to curb corruption.
We hope to provide our analysis and ideas first to the Prime Minister himself as he prepares next year’s Budget, and secondly to the people and the market to evaluate which coalition is a better manager of our country’s finances. The analysis will culminate in Pakatan Rakyat’s alternative Budget which is expected to be unveiled days before the Prime Minister tables the government’s budget.
Steven Sim is the Member of Parliament for Bukit Mertajam.