Posted on

The 2013 Budget: Najib’s Last Hurrah? (1)

“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. Continue reading “The 2013 Budget: Najib’s Last Hurrah? (1)”

Posted on

REFSA’s and IDEAS’s Misplaced Focus on Critiquing Subsidies in the 2013 Budget

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. Continue reading “REFSA’s and IDEAS’s Misplaced Focus on Critiquing Subsidies in the 2013 Budget”

Posted on

Popular populism? Najib’s Budget 2013 gamble

Bridget Welsh
Malaysiakini
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? Continue reading “Popular populism? Najib’s Budget 2013 gamble”

Posted on

The ‘Biggest Bribe Budget’?

By Kee Thuan Chye
Malaysian Digest
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. Continue reading “The ‘Biggest Bribe Budget’?”

Posted on

Budget 2013: Tussle of the titans

— 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? Continue reading “Budget 2013: Tussle of the titans”

Posted on

Pakatan Rakyat: Building an Economy for All

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).

Continue reading “Pakatan Rakyat: Building an Economy for All”

Posted on

Budget 2013: Same old formula, with no solutions

Tony Pua
MP SPEAKS
Malaysiakini
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. Continue reading “Budget 2013: Same old formula, with no solutions”

Posted on

Tunggu sahaja penggal ini tamat tempohnya

— 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. Continue reading “Tunggu sahaja penggal ini tamat tempohnya”

Posted on

The Budget 2013

— 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. Continue reading “The Budget 2013”

Posted on

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. Continue reading “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”

Posted on

Buying love on a Budget

— 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. Continue reading “Buying love on a Budget”

Posted on

Budget 2013 showdown: BN vs Pakatan

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.
Continue reading “Budget 2013 showdown: BN vs Pakatan”

Posted on

Candied Budget unlikely to sweeten GE13 for BN, say analysts

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. Continue reading “Candied Budget unlikely to sweeten GE13 for BN, say analysts”

Posted on

Di antara bajet BN dan bajet Pakatan Rakyat

— 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. Continue reading “Di antara bajet BN dan bajet Pakatan Rakyat”

Posted on

2013 Budget tomorrow – not whether there will be 2nd payment of BR1M but whether it would more than double RM500 and benefit more people than just 4.2 million households earning less than RM3,000 a month?

The single question all Malaysians are asking about the 2013 Budget to be presented by the Prime Minister-cum-Finance Minister, Datuk Seri Najib Razak in Parliament tomorrow is not whether there will be a second payment of BR1M (1Malaysia People’s Aid) but whether the second BR1M will be more than double the first BR1M of RM500.

Furthermore, whether the second BR1M payment would benefit more people than just the 4.2 million households earning less than RM3,000 a month as provided for under Budget 2012 . i.e. households earning up to RM4,000 or RM5,000 a month.

The Barisan Nasional government, through their representatives at various levels in the country, have led Malaysians to expect these second BR1M benefits from Budget 2013 tomorrow, and if the second BR1M payment is not more than double the first BR1M payout of RM500 or does not benefit more than the 4.2 million households earning less than RM3,000 a month, Najib and the Umno/BN government should expect an adverse backlash from the Malaysian people.

Najib has himself to blame that the country’s annual budget presentation in Parliament has become an annual Santa Claus occasion, all because of Najib’s indecisiveness and obsessive fear of the 13th General Elections, causing him to transform his 42-month premiership into an prolonged and unending electioneering campaign. Continue reading “2013 Budget tomorrow – not whether there will be 2nd payment of BR1M but whether it would more than double RM500 and benefit more people than just 4.2 million households earning less than RM3,000 a month?”

Posted on

Pakatan Rakyat 2013 Budget pledges a New Deal for Sabah and Sarawak

The Pakatan Rakyat’s 2013 Budget recognises and addresses the three “Cs” of corruption, crime and competitiveness – the trio of problems which are the bane of the Malaysian economy and if unresolved, will condemn the country to mediocrity and even towards the direction of a failed state.

The PR 2013 Budget is also a pledge for a New Deal for Sabah and Sarawak, comprising five elements:

(1) Reaffirmation of the Kuching Declaration of Pakatan Rakyat of 16th September 2012 to fulfil the hopes and aspirations of the people of Sabah and Sarawak in terms of infrastructure development and protection of their fundamental rights in forming Malaysia 49 years ago in 1963;

(2) Pakatan Rakyat pledge to honour the increase of petroleum royalty to Sabah and Sarawak (as well as to Terengganu and Kelantan, the other oil producing states) from 5 to 20%; Continue reading “Pakatan Rakyat 2013 Budget pledges a New Deal for Sabah and Sarawak”

Posted on

Malaysia’s PM to bet on generous budget as election looms

By Siva Sithraputhran and Anuradha Raghu
Sep 26, 2012
Reuters

KUALA LUMPUR (Reuters) – Malaysia’s Prime Minister Najib Razak is expected to unveil a voter-pleasing budget on Friday, placing the priority on winning a tough election above addressing the country’s rising debt burden.

Economists say Najib will likely delay much-needed reforms to broaden Malaysia’s tax base and reduce its dependence on oil revenues to at least next year, while announcing measures to help poorer families struggling with rising living costs.

Strong revenues in 2012 mean Najib can afford to be generous in the budget for next year without alarming financial markets, but further signs of fiscal slippage would add to investor concerns over a steady deterioration in Malaysia’s finances.

The Southeast Asian country’s public debt as a percentage of GDP is just short of its self-imposed ceiling of 55 percent – up from 43 percent in 2008 – while its budget deficit of 4.7 percent in the first half of 2012 is the third-biggest in Asia after Japan and India.

Fitch Ratings said in August that Malaysia’s public finances were weak compared with other countries on equivalent sovereign ratings (A minus) and on a par with heavily indebted countries such as Italy and Israel. Continue reading “Malaysia’s PM to bet on generous budget as election looms”

Posted on

Budget 2013: What do we want and what can we afford?

— Ramon Navaratnam
The Malaysian Insider
Sep 25, 2012

SEPT 25 — Budget 2013, I am sure, will be one of the most difficult to design and to present to the people and Parliament come Budget Day this Friday Sept 28. I’ve done this many times before, so I think I would know!

This Budget is crucial for many reasons. Firstly, we are facing global economic decline and considerable uncertainty that can adversely affect our socioeconomic outlook. Secondly, the 13th General Elections are looming and voters want and think they can get more from this Budget. Thirdly, more so now, there is a major conflict between two perennial Budget issues — what people want and what can we afford.

Government is now faced with the exacting challenge of wanting to please the voters in an Election Budget and protecting the integrity of the Budget and indeed the sustainability of the economy itself. The Budget will thus have to strike a clever balance that will not easily please everyone — the people and the foreign financiers.

On the Macro front, we must take into account the rising concerns of the international Rating Agencies, the World Bank and the IMF which will be closely watching to see how we manage these conflicting demands on the Budget.

We can all merrily ask for more perks, tax concessions, subsidies and even more spending to make us all feel good and happy. But we have to think of the impact of more “giveaways” on the overall health of the economy. We have to remember our overriding need to control the widening Budget Deficit and the Debt Burden which have been rising rapidly and weighing down on the confidence in the economy in the longer term. Continue reading “Budget 2013: What do we want and what can we afford?”

Posted on

The 2012 Budget for a class of seven-year-olds… and voters

By Shern Ren | November 16, 2011
The Malaysian Insider

NOV 16 — Tomorrow my younger brother is going to school to collect the RM100 that the government has promised him as a school-goer. It’s all well and good for him to get a bit more spending money, but what difference does it make in our national Budget? Here’s an imaginary conversation that will take place tomorrow in a school far too close to home…

Hi, and welcome to Class 1 Malaysia in SJK Pelancar(1). As you’re all aware, our class president (who’s also the class treasurer) has magnanimously decided to give RM100 to all schoolchildren — that’s you and me! But before you all line up to receive his magnificent gift, he’s asked me to make a little speech about how far we’ve come as a class.

There are fifty of us in this class, 1 Malaysia. Who’s bringing in the dough? Well, 21 of us are employed, but only six of us will have any qualification higher than the SPM. Only three working people earn enough to pay any class fees at all to the class fund, which makes it all the more interesting that two of you guys are actually working for the class and earning your living from that same class fund. Don’t get too comfortable in your job though — there are eight fellows from other classes like 1 Donesia willing to do our jobs for half the price, or two of them for every five of us.
Continue reading “The 2012 Budget for a class of seven-year-olds… and voters”

Posted on

Sinking deeper and deeper

By S JAYASANKARAN, KL CORRESPONDENT | 31 Oct 2011
Business Times

MALAYSIA should take heed of the problems – the public anger, the social unrest – posed by the solutions offered to tackle rising sovereign debt in Europe. God forbid that we head that way!

The Auditor-General’s recent report pointed out that Malaysia’s national debt rose 12.3 per cent to over RM407 billion (S$165 billion) in 2010. The amount is equivalent to 53.1 per cent of gross domestic product. It’s the second straight year that the national debt has exceeded 50 per cent.

The figure is a reflection of the spending spree the country went on to mitigate the effects of the 2009 global financial crisis. At its peak that year, the budget deficit rose to 7.6 per cent of GDP, the highest in two decades.

It has since come down to 5.4 per cent of GDP and the government projects that it will decline further to 4.7 per cent of GDP next year. But that may be overly optimistic.
Continue reading “Sinking deeper and deeper”