The DAP Alternative National Budget 2010 marks the progress the Party has made in the field of economic policy making, and our readiness to assume the role of a governing party in the Federal Government as and when such opportunities arise in the near future.
Our first Alternative National Budget was launch on the 5th September 2007 for the year 2008, before the last historic general elections where Pakatan Rakyat denied the Barisan Nasional two-third majority in the parliament, and winning government in 5 Malaysian states. This new Alternative National Budget 2010 picks up from where we left off in 2007, enhancing our proposed economic policies with stronger strategies and proposals based on further in depth research and analysis.
As Malaysia face one of the most challenging economic period in times of uncertain global demand, it is critical that the Malaysian government takes decisive actions to spur the economy and ensure that we will not only recover from this recession, but also emerge stronger and more competitive than we were before the onset of the recession. However, a review of the Barisan Nasional (BN) government’s actions to date coupled with its track record over the past 12 years paints a less than optimistic picture.
At a time when the economy is faltering globally, is exactly the time for the government to be pump-priming to boost domestic demand and competitiveness. However, despite the urgent need to boost government expenditure, the BN government is now finding out the hard way that they have in essence, run out of money to spend and are struggling to contain and maintain the high and escalating cost of government.
Malaysia had it so good for the 10 years of positive economic growth, was crucially aided in the last 5 years by lucrative windfall returns from the oil and gas sector due to skyrocketing oil prices. Sudden and belatedly the Government has realised that they have not had a single cent of savings all these “good” years. What made matters worse is the fact that oil prices have fallen far below the expected price of US$125 per barrel in 2009, which means there will be no windfall earnings in the coming year to “boost” Government expenditure for 2010.
Oil and gas revenue contributions to the Government had increased from RM19 billion in 2004 to more than RM70 billion in 2009 and despite that, every single cent of our oil and gas windfall earnings has been spent. Not only did we not save a single cent for the rainy day, the Government borrowed extensively on top of these windfall earnings, resulting in 12 consecutive years of budget deficits, and rapidly increasing our national debt regardless of whether the economy is performing or underperforming.
It may have been a different story had these windfall earnings been invested or spent on development projects. However, the overwhelming portion of the record earnings went to the Government’s operational expenditure to further enlarge the civil service, payment of supplies and maintenance services as well as extraordinary items such as compensation to already highly profitable highway toll concessionaires. This does not include of course all the money “burnt” via scandalous investments such as the RM12.5 billion Port Klang Free Zone, tens of millions of irrecoverable losses by the Ministry of Tourism subsidiary, Pempena and of course, the high prices the Malaysian government pays for the daily goods and services such as pens, paper, screwdrivers, digital cameras and carjacks.
Between 2003 to 2009, the Government’s operating expenditure has increased by leaps and bounds, from RM53.4 billion in the year 2000, to RM80.5 billion when Datuk Seri Abdullah Ahmad Badawi took over as the Prime Minister in 2004, to RM154.2 billion in 2009. However, development expenditure, which has the highest economic multiplier effects, has only increased disproportionately lower from RM29 billion in 2004 to RM50.5 billion in 2009.
Barisan Nasional’s reckless management of the country’s wealth and windfall blessings have resulted in a structurally weaker Malaysian economy compared to many of our regional peers. This recklessness must be checked immediately to ensure that the mistakes are not repeated. If the Government continues to accumulate debt on a unsustainable basis over the longer term, then it is our children and grandchildren who will be paying for their mismanagement today.
In addition, our experience in state governments over the past 18 months has also provided us with a better understanding of practical issues affecting economic develompent in Malaysia, and which requires major shifts in the way our public policy and economy is managed. Economic planning and management has become increasingly centralised in Malaysia over the past 2 decades to the extent that it has become bureaucratic and inefficient in carrying out economic initiatives.
For example, in Penang and Selangor where DAP plays a major role in the state government, we find our efforts hampered by the total lack of control over funding for projects and development, and are subjected to the whims and fancies of the Federal Government. While Selangor and Penang contribute RM16 billion and RM2.5 billion respectively in income taxes to the Federal Government, in return they receive federal grants amounting to only RM247 million and RM127 million respectively.
Hence contained in this Alternative Budget proposal are policies and programmes which seek to reverse the reckless and gross mismanagement of the rakyat’s money by the BN Government, and at the same time reduce the bureaucracy of central planning and devolve monetary and decision- making to state levels to increase efficiency and effectiveness of Government.
The theme for this year’s Alternative Budget is “Democratising Malaysia’s Economy” for not only is the Malaysian political scene in need of greater democracy, the economy as well is in a serious need for a dose of democratisation to ensure that Government expenditure works in the interest of the people who pay the taxes, that Government policies does not favour the wealthy and politically connected over ordinary citizens and Malaysian states receive their fair share of fiscal freedom proportionate to their economic contributions and financial needs.
We strongly believe that by “Democratising Malaysia’s Economy”, we will be able to not only unleash the next wave of high economic growth for Malaysia, but also put in place a set of economic policies and institutions which will ensure the economic rights of Malaysians are perpetually protected, regardless of the Government which is in power. By “Democratising Malaysia’s Economy”, we will promote our objective of creating a Competent, Accountable and Transparent (CAT) government.
This Alternative Budget 2010 will form DAP’s core economic policy and manifesto in the next few years and we will submit our proposals to the Pakatan Rakyat Leadership Council for consideration, and with further input from our partners in PKR and PAS, its adoption.
Finally, we’d like to thank the immeasurable contributions of the core budget team led by DAP National Publicity Secretary and MP for Petaling Jaya Utara, Tony Pua and my former Economic Advisor, Teh Chi Chang who has since returned to full employment, comprising of Lee Kok Yew, Cheah Yi Peng, Lew Yin How and Sugashini Kandiah. Special mention is also be extended to John Lee Ming Keong and Ho Horng Yih for providing their views and input. And finally, on behalf of the team, we’d like to thank Dr Woo Wing Thye of University of California at Davis, who to took time to review our early drafts of the Alternative Budget and provided us with invaluable insights of “fiscal federalism”.
(Foreword by DAP Secretary General Lim Guan Eng when announcing the DAP 2010 Alternative Budget on Wednesday 7 October 2009 in Petaling Jaya)
Just back from Singapore & met some Malaysians working there from several sectors. All of them agrees that Malaysia is going down the wrong path economically. Govt expenditures are really high and spending on the wrong wrong places.
All the rakyat’s money being squandered in many ways – fraudulent expenditures & money ‘burnt’ on scandalous projects etc.
These ‘brains’ have left Malaysia for good. They work in ever efficient S’pore & will be there for a long long time. The longer the current govt is ruling, the more money will be siphoned out and may end up in a Swiss bank account by govt’s cronies! That’s why our economy is collapsing.
By the way with Swiss banking secrecy, I can roughly estimate that more than half of these cronies have accounts there from ill-gotton gains!
I got this forwarded in my email 2 days ago about BALKIS misuse of funds:
“Bocor! RM1.9 million ringgit
UMNO Cuti (Lawatan Sambil Belajar)”
AFTER a gruelling seven days, the public inquiry into possible misuse of funds by Wives of Selangor Elected Representatives Charity Organisation (BALKIS) ended yesterday, leaving those who attended reeling from the revelations.
For more than a week, details of money spent on exotic trips, overseas souvenir- shopping expeditions and gifts for guests attending glitzy functions, kept members of the Selangor State Assembly’s Select Committee on Competency, Accountability and Transparency (Selcat) riveted as the figures continued to rise.
The inquiry is the first to be conducted by a State Legislative Assembly in the country. Other States are widely expected to follow suit following the conclusion of the Balkis inquiry.
Yesterday, PNSB chief executive officer Datin Khairiyah Abu Hassan dropped a bombshell when she further revealed how much the State-owned conglomerate had forked out for former Selangor Menteri Besar Datuk Seri Mohd Khir Toyo and his family’s expenses during the overseas technical visits.
She also drew hoots of laughter when she explained the reasons for the trips.
1. Jakarta and Jogjakarta, Indonesia – 20-24 April 2003
Total cost: RM201,452
Dr Khir, his wife, daughter and maid also went on the trip. The purpose was for delegates to study Indonesia ’s batik production, which was supposed to lead to the opening of a batik factory in Selangor.
Cost of airfare for Dr Khir, his wife, daughter and maid: RM37,695
Miscellaneous costs incurred by the delegates RM34,404
Spent on two-day rental of a limousine/ Mercedes Benz in Jakarta : RM5,800
Paid for two-day rental of a limousine/ Mercedes Benz in Jogjakarta : RM5,000
(inclusive of four-day transit in Dubai )
Total cost: RM900,000
The trip, attended by Dr Khir, his wife, children and maid as well as PNSB delegates, was to study Islamic architecture, which could be adopted in Selangor. Add on : Mind that – Islamic Architecture in a multi-cultural Selangor, funded by $ from all races & religions
The group, which had a reconnaissance trip beforehand, also visited Paris Disneyland to generate ideas for a theme park in Bagan Lalang, Sepang.
They bought tickets to enter the theme park and did not meet any Disneyland representatives.
Cost of the recce team trip: RM366,000
Cost of official trip: RM416,000
Airfare: RM366,000
Ground arrangements RM420,000
City travel: RM70,000
Other expenses RM43,000
3. Honolulu (Hawaii) & Orlando (Florida) – 23 Dec 2007 to 1 Jan 2008
Total cost: RM646,841
Additional cash taken: RM101,000
A technical study on the Bagan Lalang theme park was also the pivotal reason for the trip. The group, comprising Dr Khir, his family and PNSB delegates, bought tickets to DisneyWorld and again did not meet any Disneyland representatives.
A tour guide instead took them around. Cost of Dr Khir’s luxury suite: RM110,000
Cost of six single superior rooms for the delegates: RM171,000
Cost of one twin-sharing room RM24,800
Khairiyah claimed that on the trips, Dr Khir and his wife flew only first class.
The itinerary of the US trip also included visits to Miami Beach , island tours, dinner cruises and a Honolulu city tour.
Dr Khir and his wife, supposed to have been key witnesses, failed to turn up for any of the inquiry proceedings.
Dr Khir would be referred to the Committee of Privileges while Zaharah could be prosecuted under Section 5 of the Contempt of the House Act 2008. The inquiry’s findings will be presented at the next sitting of the Selangor State Assembly in July.
The Malaysian Anti- Corruption Commission is expected to investigate possible criminal breach of trust (CBT) once Selcat concludes its findings and police conclude their investigations.
11 Sept 2009 – Khir Toyo was called for questioning by MACC but he was let go after some greetings and minor questions. Why didn’t they keep him overnight like Teoh Beng Hock and then see if he jumps to his death from Plaza Masalam?
Bagan Pinang by-election is this month, on 11 October 2009. If you love Barisan Nasional, then vote for UMNO in Bagan Pinang. They will also love you for giving up your hard-earned tax ringgit so that they can enjoy a luxurious elite lifestyle, travelling all over the world and living like kings without having to work for a single cent. Be a good rakyat – Vote BN in Bagan Pinang on 11 October 2009, give UMNO more money.
That’s BN’s Budget……
I had a quick peep (been busy) inside the budget and noticed the point about control over state taxes. You mention it again above as ‘lack of control’. Granting more control over tax money to the states is only a solution to the (hopefully) temporary problem of a corrupt Federal government. As a long term strategy for a nation, I believe it would be a disaster, inevitably accentuating financial differences between the states.
I would hope a competent government would install institutional changes that prevented capricious misdirection of public monies. While state control of tax monies might be a quick fix for the terrible problem of financial strangulation you face now, it’s not a good long term strategy. I would imagine a competent bean counter could come up with a transparent scheme for state allocation (by quantity and timescale) of public monies, that could then be ‘tweaked’ within narrow bands by the federal government of the day.
To me….DAP is showing the are not sitting idle…and do feel sincerely as servants to Malaysians.
To me….I will only be serious when DAP gains more cities to manage…how good are they with their words.
Right now..DAP… is much much better than Gerakan and MCA… and a powerful force to give Malaysians to vote UMNO out.
DAP is managing Penang….but UMNO is still government of the country.
LGE is not given a free hand. We understand that…but he does have more say for Penang that anybody else.
So lets see….Lim Guan Eng..show some clear improvements in Penang and Pengan folks will respect and love him. That matters most to DAP….right now.
Sorry, after re-reading the document, you do appear to be suggesting a formula for tax money redistribution.
The hardcore poor funding and the tax cuts for urban dwellers in your Key Policy Highlights appear to me to be likely to worsen Malaysia’s abysmal wealth distribution scores. 750 million in 2010 to eradicate poverty within 5 years is less than RM10 per person per year. I don’t doubt you’re a financial whizz, but I think that’s optimistic at best.
Rather than further accentuate the problem by assigning Malaysians to categories in that oh-so-Truly-Malaysian way, why not roll alleviation of poverty and tax breaks into one and pay a tax credit to every working-age Malaysian? Then you don’t have to send a rich kid with a clipboard to kampungs to ask people whether they’re ‘hopelessly poor’ or not. I think dividing people up into camps to market different political products to them is anachronistic.
My proposal would be, along with simplification of tax rules (why so many bands? Incredible!), to pay a no-questions-asked tax credit to any Malaysian that goes into a tax office once a year with a self-assessment form. It’s an ideal way to reach out to people who would like to earn more money but haven’t a clue where to start. Labelling them as ‘hardcore poor’ doesn’t seem very productive. Maybe I’m missing something with the tax credit scheme, it seems like a single stone that would kill very many birds.
As for easing the burden faced by urban Malaysians, how about painting Port Dickson, installing a telecomms network that works, policing the place better and legislating against workers’-cabin-type housing developments? Increasing the benefits available to urban dwellers is just going to aggravate the problem of deserted countryside and overcrowded cities. I got a laugh in the kopitiam tonight when I described PD as a place where people go to die. I thought I was making a serious point.
What is the purpose of any fiscal budget?
Who really monitor the revenue and expenditure LIVE – no good on historic basis?
No good for the Auditor-Gen to comment a few years down the road and nothing done to improve the whole mechanism of budgets year in year out.
Most budgets are ‘bloated’ by repeated items to look good in the total figures and that is actually
profligacy and leakages not dealt with…
The illegal leaders just cheat the public and the tax payers who pay ridiculous taxes…
The complicity is exposed with mini budgets and economic stimulus packages as there is really nothing new except block those who deserve those funds and diverted to help/bail out cronies and govt linked companies in crisis.
So which GL companies would be bailed out soon?
pw: grosscup runner-up
///Rather than further accentuate the problem by assigning Malaysians to categories in that oh-so-Truly-Malaysian way, why not roll alleviation of poverty and tax breaks into one and pay a tax credit to every working-age Malaysian? Then you don’t have to send a rich kid with a clipboard to kampungs to ask people whether they’re ‘hopelessly poor’ or not. I think dividing people up into camps to market different political products to them is anachronistic.///– Orang Royak
I agree. But that is better than looking at race, which was considered a simple matter when they decided back then to help people of the race which formed the majority of the poor. Now these beneficiaries claim that they are being provided with that assistance as privilege because fo birthright. They claim also that history is on their side.