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‘Irresponsible’ BN driving Malaysia deeper into debt, says Guan Eng
By Clara Chooi
June 16, 2012
Describing
this as irresponsible fiscal spending by the ruling pact, the Penang chief
minister said the extra expenses would place Malaysia
“This would easily
put Malaysia ’s deficit as a
percentage of the Gross Domestic Product (GDP) at more than 6 per cent in 2012,
which is significantly higher than the initially projected 4.7 per cent,
especially if the widely anticipated worldwide economic slowdown hits Malaysia
The DAP
secretary-general also warned that the added expenses would see government debt
soar drastically beyond RM500 billion by year-end. As of the first quarter of
this year, government debt stood at RM470 billion.
This,
he said, was before factoring in “contingent liabilities”, which he described
as loans to be settled by taxpayers if companies like Malaysia Airlines (MAS)
have to be bailed out.
“Estimates
of these contingent liabilities at the end of 2011 stand at RM110 billion.
“If
contingent liabilities are added to official government debt, our debt-to-GDP
ratio would stand at over 65 per cent at the end of 2012, which is well above
the statutory limit of 55 per cent debt-to-GDP ratio,” he said.
On
Thursday, Putrajaya tabled a supplementary supply Bill asking for RM13.8
billion more to spend this year, further fuelling fears that the Najib
administration would not be able to rein in the deficit and breach the
statutory debt ceiling.
The
Bill, tabled in the Dewan Rakyat by the Finance Ministry, which Prime Minister
Datuk Seri Najib Razak heads, allocates RM360 million to the Election
Commission, RM113 million to the Prime Minister’s Department, RM446 million to
the Works Ministry and a whopping RM11.2 billion for “treasury general
services” ahead of federal polls that must be called within the year.
The Malaysian Insider reported earlier this week that BN MPs will
each receive RM1.5 million to plough into their constituencies and that the
ruling coalition is looking towards having a general election after Najib
tables Budget 2013 this September 28.
The
prime minister had also admitted recently that the government was considering a
repeat of the RM500 dished out early this year to low-income families under the
Bantuan Rakyat 1 Malaysia (BR1M) that cost RM2.6 billion.
Lim
said the request for extra funds was proof that the ruling pact planned to dish
out more allocations to its MPs, while non-BN MPs, including those from Pakatan
Rakyat (PR), would not receive a single sen.
He
noted that RM30 million from the RM112 million allocated to the Prime
Minister’s Department was for a “National Branding Unit”, which he said was not
necessary.
“One
wonders why Malaysia
“Good
companies which make good products coupled with good governments which
implement good policies are sufficient to increase the brand profile of a
country. Just think of what Samsung has done for Korea
and what Apple has done for the United
States
Lim
also questioned the need to pour an added RM360 million for the EC’s
operations, pointing out that the highly-criticised agency had failed in its
basic duty of ensuring the current electoral roll is free from discrepancies.
Despite
this, however, the Bagan MP said BN’s strategy of going to taxpayers to fund
its “irresponsible spending habits” was nothing new.
He gave
a reminder that the government had asked for an additional RM13.2 billion in
June last year and RM10.3 billion in March this year, both for Budget 2011.
Lim
said that said since 1997, Malaysia
Compared
against the country’s gross domestic product (GDP), he said that debt levels
had increased five-fold since 1997 while GDP had only grown three-fold.
Najib
said late last month the government will ensure that Malaysia
He said
the national debt stood at 53.5 per cent of GDP, which stood at RM881 billion
for 2011 after a recent revision, leaving Malaysia
The
Najib administration has pledged to cut the fiscal deficit, which dropped to
4.8 per cent last year from a 22-year high of over seven per cent in 2009.
But
Malaysia’s slowing economy, which recorded a third consecutive quarterly dip in
growth to 4.7 per cent in the first three months of the year, has raised
questions of whether the federal government can keep spending in check.
Analysts
have warned Malaysia to brace for a significant slowdown here due to rising
linkages with top trade partners including China, the world’s second-largest
market which economists say is headed for a sixth consecutive quarterly drop in
growth with worse to come.
A Greek
exit from the euro zone, which is growing threat, would cause a second
recession in as little as four years in Malaysia as the knock-on damage to
Europe poses a threat to the global economy, Bloomberg reported analysts and
economists as saying recently.
The
World Bank also urged Malaysia
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