Pakatan Rakyat Budget 2012 (Part 1 of 10)

Snapshots

1. Kesejahteraan Untuk Semua
Belanjawan Kesejahteraan 2012 is a continuation of the collective effort by Pakatan Rakyat to chart a new future for Malaysia, following the releases of the Common Policy Platform in December 2009 and the Buku Jingga in December 2010.

Kesejahteraan Untuk Semua can be only achieved with political will to effect genuine and comprehensive institutional reforms guided by the principles of transparency and good governance.

Malaysia’s diversity is our strength. Our economic growth depends on the solidarity of all people regardless of gender, ethnicity or religion. Only through a budget which is gender responsive, and one that empowers ordinary Malaysians to live a dignified life full of opportunities , will we unleash the full potential of our people.

Recognizing the inflationary pressures on the Malaysian public, Belanjawan Kesejahteraan 2012 creates growth for all through providing policies and frameworks aimed towards uplifting the 60 percent of Malaysian households earning less than RM3,000 monthly.

Introduction of minimum wage, reduction of unskilled foreign workers, upgrading of skills and productivity will massively benefit the Malaysian workforce. In particular, special attention is given to improve women’s participation in the workforce. Wage, skills and productivity will improve in tandem.

Improvements to public transport, housing and healthcare will contribute to increasing disposable income of the people. Higher disposable income will enhance domestic consumption, which is increasingly more important in the volatile global environment.

Monopolies and oligopolies will be broken up, enhancing competition while helping Malaysian businesses to reduce costs. A competitive environment will mitigate inflationary pressures and generate more choices for the people.

Therefore, the five key imperatives of Belanjawan Kesejahteraan 2012 by Pakatan Rakyat are:

• To immediately assist the majority of Malaysians in times of increasing economic uncertainty.

• To ensure sustainable financing of government coffers with a focus on deficit reduction.

• To economically empower Malaysians in both the short and long term via technical and vocational trainings, as well as a reasonable living wage.

• To battle corrupt practices and wastages to ensure every cent spent is done efficiently.

• To immediately implement political reforms, which are the prerequisite to smooth economic transformation to bring Malaysia forward.

2. Rich Country, Poor People?
Malaysia is resource-rich. But how have the gains from our natural resources- which we have in abundance- trickled down to the average Malaysian? Presently, Malaysians are not earning as comfortably as we should be. The bottom 40 percent of households earn an average income of RM1,500 per month while the middle 40 percent of households earn an average income of RM3,500 per month.

Overall, 80 percent of households earn only an average income of RM2,500. In terms of qualification, a staggering 70% of the population has only SPM as their highest qualification whilst in terms of employment, more than a third of household heads are in the informal sector. It is not a surprise then, that income inequality in Malaysia is significantly high where the bottom 40% takes only 15% of total income while the top 20% take nearly half with 49%.

The symptom of the malaise of a trapped Middle Income nation is without a doubt present in Malaysia due to outmoded policies and poor management of the economy that favours a few. Presently, what we are seeing includes (i) the inability of a significant amount of Malaysians to cope with rising cost of living (ii) high unemployment among local graduates although concurrently, employers complain of skills and talent shortages (iii) a subsidy bill that has ballooned 10 times and (iv) both domestic and foreign investments are less than optimal, resulting in Malaysia being the only ASEAN country to experience net FDI outflows.

This doesn’t help when con-currently, the global economy is entering into another period of turbulence. Capacity of US and Eurozone to generate further growth is now severely limited. Exporting to Western nations is no longer a source of growth for Asia. We need to find new sources of comparative advantage.

Belanjawan Kesejahteraan 2012
Belanjawan Kesejahteraan 2012 by Pakatan Rakyat emphasizes empowerment, opportunities and dignity for all Malaysians whilst doing so within a financially and environmentally sustainable framework. Belanjawan Kesejahteraan 2012 chooses to focus on developing Malaysians, not mega-projects and bloated plans. It emphasizes entrepreneurship, productivity, dignified jobs, not handouts and goodies for cronies or vested interest groups.

3. Responsible spending
Pakatan Rakyat will maintain expenditures at RM220 billion in 2012 but will spend the people’s money in a more responsible, accountable and effective manner. The deficit will be lowered to 4.4% of GDP from 6% in 2011. 1.6% reduction in deficit equals to RM14 billion.

• Revenue can be raised without further increasing the burden on the rakyat by extracting the full value of government concessions and permits. For example, raising the issue price of APs could raise an additional RM1.2 billion in revenue.

• Effective spending, by eliminating the current practices of wastefulness, misdirection and inefficiency, will generate for the rakyat 20% more in benefits for the same amount spent. For example, Pakatan Rakyat will be able to deploy RM4.4 billion to:

  • Enhance education. All teachers will enjoy the RM500 per month special teaching allowance as promised in Buku Jingga.

  • A minimum wage that will benefit approximately 300,000 civil servants and raise the overall salary scale of the civil servants.

• The practice of arbitrarily demanding large dividend payments from Petronas will be replaced with a reasonable dividend formula. Even though oil prices are higher, the dividend for 2012 is budgeted at RM26 billion, lower than the RM30 billion in 2011.

4. Raising income
Pakatan Rakyat will prioritise policy initiatives aimed at raising the income levels of households and skills of the workforce.

Wages are low in Malaysia. The bottom 40% of households earn RM1,500 per month. And, low wages are a function of:

• Large supply of cheap unskilled foreign labour

• Lack of skilled labour

• Disincentives for private enterprise to raise productivity

While recognizing that wages can only grow sustainably with productivity gains, it is also a reality that the wage setting mechanism has become dysfunctional. Pakatan proposes that:

• A minimum wage of RM1,100 per month (total compensation) will be implemented together with holistic labour market reforms including strengthening the worker safety net, centered on retraining and upskilling, job search and relocation assistance, and unemployment insurance. Two years for Sabah and Sarawak to fully implement.

• A minimum wage is the legally enforced floor wage to ensure that all workers at the lowest level receive a humane subsistence wage while the rest will experience a consequential increase in pay.

• RM2 billion will be allocated to a special Facilitation Fund to help entrepreneurs, SMEs and small firms retool, mechanize and adjust their operations to create new jobs.

• RM1.6 billion will be set aside to expand technical and vocational training to upgrade the skill base of the workforce.

• 10 000 teachers will be trained and RM 200 million will be allocated to address the shortage of Chinese, English, Tamil and religious teachers, as well as an additional RM 200 million to be immediately disbursed to improve existing buildings of SRJK (C), Sekolah Agama Rakyat (SAR) and SRJK (T) schools in particular.

5. Ending monopolies
Pakatan Rakyat will herald a new era by implementing wide-ranging policy and regulatory reforms to reduce cost of living, encourage SMEs and investments.

• An open tender policy for government procurement will reward know-how instead of know-who.

• Affirmative measures for bumiputera and other disadvantaged groups will focus on strengthening the capability of such groups to compete through education, training and financial support.

• A Unfair Public Contracts Act will be enacted to empower a review into lop-sided concessions and agreements that are deemed to be against the public interest.

• The professionalism and glory of the civil service will be restored to better serve all the rakyat, from individuals to small traders and large investors.

• GLCs will be freed from political interference and allowed to operate based on commercial priorities. Ultimately only GLCs in strategic sectors will be retained.

• The Competition Act will be extended to all sectors of the economy, including telecommunication companies, pay-tv services and the power sector.

• The following monopolies (not an exhaustive list) that erode disposable income of ordinary Malaysians and result in high business cost will be to restructured in 2012:

  • Abolishing Padiberas NasionalBerhad (BERNAS)’s monopoly for the import of rice. Instead, import licences will be awarded via a competitive, open and transparent process;

  • Telekom Malaysia (TM) will be instructed to release its stranglehold on the “last mile” market of broadband internet service and focus on its backbone business – data and telephony – thereby creating a robust and competitive “last mile” market. This will subsequently lower costs and enable enhanced broadband penetration;

  • Telecommunication companies’ cartels will be dismantled;

  • Press and media cartels will be dismantled;

  • Airline services cartel will be dismantled;

  • Astro’s monopoly of direct broadcast satellite pay television service will be broken up;

  • Taxi licences will be given directly to individual taxi drivers.

6. Ensuring dignity in difficult times
Pakatan Rakyat shares the anxiety of the people to live a dignified life in confronting the demands of daily life before policies to raise income take hold.

• The following immediate measures are proposed:

  • A senior Malaysian bonus of RM1,000 a year for the elderly;

  • Payment of RM1,000 in 2012 for qualified homemakers;

  • Supplementing hardcore poor household income to RM550 a monthand enhance social safety net by increasing direct welfare payments to RM550 per month to ensure alignment with assistance to hardcore poor households; and

  • A childcare allowance of RM1,000 a year for children below 12 years old from households earning less than RM1,000 a month and establishment of certified childcare centres through special loans and tax incentives will be facilitated. Pakatan wishes to see that female labour participation rate will increase from 46 percent to 55 percent within five years. Other policies to increase the participation of women in the labour force, through training and greater flexibility in working hours will be deliberated.

• Pending the uplifting of rakyat incomes, the existing subsidies on goods and services will be maintained at RM22 billion. Subsidy and price control policies will be overhauled to rationalise government expenditures:

  • Subsidies to monopolistic corporations will be stopped;

  • General subsidies will be restructured to benefit directly the needy target groups.

• Pakatan Rakyat will not implement the Goods and Services Tax until and unless Malaysia departs from the Middle Income Trap.

7. Narrowing the Urban-Rural Divide
Pakatan Rakyat will increase incomes and employment opportunities for Malaysians in rural areas.

• Regional and rural development will be boosted through administrative decentralisation.

• BERNAS’ monopoly for the import of rice will be abolished. Import licences will be awarded through a competitive and transparent process. Subsidies will be delivered directly to farmers via farmers’ institutions.

• RM100 million will be allocated to small businesses to improve cleanliness and sanitary facilities to create more conducive and healthy environments for customers.

8. Improving the Quality of Life
Pakatan Rakyat will champion a better quality of life for all Malaysians.

• The police force will be refocused on crime prevention and enhancing public security.

• A “Build, then Sell” policy for low-medium cost housing developments will be implemented, protecting house-buyers. Allocation for public housing projects will increase by RM1 billion.

• A National Transport Policy will prioritize public transport following the principle of “moving people, not cars”. Land Public Transport Commission (SPAD) will be transferred from the Prime Minister’s Department to the Ministry of Transport.

Increasing use of green technologies to foster better energy use, efficiency and savings for the people on utilities and other household expenses and for industry to raise productivity and profitability.

9. Reforming The Political Landscape
Pakatan Rakyat will strengthen our parliamentary democracy and federalism.

• Pakatan Rakyat will strengthen the principle and practice of federalism enshrined in the Federal Constitution in which states will be accorded with a more equitable formula of power sharing and resource distribution.

• Pakatan Rakyat will also introduce the following reforms:

  • To revoke all existing emergency proclamations and repeal all laws that provide for detention without trial, as outlined in the draft Emergency Revocation Act (Akta Pemansuhan Darurat) submitted by Pakatan Rakyat in the March 2011 parliamentary session.

  • To restructure the Public Complaints Bureau (Biro Pengaduan Awam) into an Ombudsman institution.

  • To place key public institutions including the Auditor-General’s Department, Department of Statistics, Judicial Appointments Commission, the Malaysian Anti-Corruption Commission (SPRM), the Election Commission (SPR), and the Malaysian Human Rights Commission (SUHAKAM), and an Ombudsman institution under the purview of Parliament.

  • To ensure freedom of the media by removing all discretionary licensing requirements via the repeal of the Printing Presses and Publications Act 1984. In lieu of this, an independent and self-regulating media council will be put in place.

  • Radio Televisyen Malaysia (RTM) as an institution will be managed by media professionals, based on the example of the BBC, and placed under the purview of Parliament.

  • To restore academic freedom and autonomy of Malaysian universities by repealing the University and University Colleges Act (AUKU) 1971, thereby freeing students from the stranglehold of the Student Affairs Department (HEP). Leadership of public universities will be based on merit.

  • To abolish the Official Secrets Act (OSA) and enact a Freedom of Information Act at all levels of government, equipped with the necessary infrastructure. This will ensure access to all information of public interest, with the exception being matters genuinely connected to national security.

• Pakatan Rakyat promises to strengthen the Parliament as an institution and rejects the practice of a Prime Ministerial dictatorship:

• RM10 billion will be reallocated from the Prime Minister’s discretionary budget to the relevant implementing Ministries.

• Proposed spending bills will be subject to rigorous scrutiny at parliamentary committee level. As a first step, seven Budget Parliamentary Committees will be set up to scrutinise ministerial budgets and allow better quality debate and appraisals.

• Committee members and MPs will be given allocations for parliamentary research assistants to improve their effectiveness in reviewing the budget submissions and monitoring their implementation and outcomes.

10. Youth at the Forefront For Change

• Pending a thorough review and comprehensive investigation on the expenditure and curriculum structure, the National Service programme will be replaced with a school-based extracurricular or community programmes. The RM 747 million, as was allocated to the National Service in the previous year, will instead be channelled into this new initiative.

• A total amount of RM 100 million will be allocated for a YouthChoice programme (PilihanAnakMuda), involving Malaysians under 30 years old, to implement projects and programmes of their choice through a balloting process.

• RM 50 million will be allocated to a special fund to promote youth involvement in creativity and in the creation of more recreational spaces for young people.

The forthcoming newly installed Pakatan Rakyat government cannot carry out these essential and game changing policies by itself and in isolation. The rakyat, as employees and employers, as housewives, caregivers and students, and most importantly as contributing citizens must play their individual and collective roles and take their place in advancing this brave inaugural agenda to move Malaysia forward to stand tall globally.

[Pakatan Rakyat Budget 2012 released by Datuk Seri Anwar Ibrahim on behalf of PR in Kuala Lumpur on 4th October 2011. Part 1 of 10]

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