BN's Election Budget vs Pakatan's People Budget

The Prosperity For All alternative budget unveiled by Pakatan Rakyat for 2012 has drawn the disgust of former premier Mahathir Mohamad, who unceremoniously torpedoed the shadow plan without so much as a glance at its contents, let alone a proper review.

"It's easy when we want to spend the money which we don't have," is what former prime minister Tun Dr Mahathir Mohamad said when asked to comment on the tabling of the Pakatan Rakyat 2012 Budget.

"It's always easy to spend the money which is not under our control. We can do anything like promising to give 20 per cent oil royalty. Yes, we can make the promise as we are not the government. Make promises, so long you win the elections.”

But the same can be said of the Barisan Nasional government currently led by Prime Minister Najib Razak. In fact, it is worse. Pakatan does not have money because it is not in control of the federal purse strings yet. But why is the GOM spending money that it does not have? Why is that the BN federal government always does not have enough money?

BN's 'misadventures' with the people's money

Perhaps, the answer lies in its rush to pump tax-payers money into military hardware purchases, paying public relations consultants and flip-flopping on initiatives that have been duly allocated public money. And these are just the tip of the iceberg, when it comes to the GOM's misadventures with public money.

No matter how Mahathir tries to bluff his way through, it is while the BN is in power and in control of tax-payers money that Malaysia has seen a slump in its cash level. Why is it that the economy has suffered a slump in the years since Najib Razak took over? Perhaps it is time to admit it, Najib’s rhetoric in creating a high income society can never be realized if he is unwilling to tackle the real rot within the system.

For the 1st quarter of 2011, the central government debt sits at RM430,151 million compared to RM407,101 million for the same period in 2010. Of the RM430,151 million, RM425,831 million is medium and long term debt.

Domestic debt sits at RM414,217 million whereby in the same period in 2010 it sat at RM390,356 million. Again the medium and long term debt is by far the bulk of the debt at RM409,897 million.

Plainly stated, the Government of Malaysia owes the central bank and funds like the Employees Providence Fund monies; that run into the billions. Such debts are a mystery when you take into account that the central government operational expenditure has decreased. For April of 2011, the figure stands at RM13,769 million; a reduction compared to RM19,416 million for the same period last year.

Bear in mind the figures above are for the first quarter of 2011, there are still 9 more months to go for the full year. And there is every reason to fear that the debt will continue to rise especially when we take into consideration the pending General Elections and various other government initiatives. The GOM has reduced its expenditure, yet it has managed to increase its debt.

Out of step with the rest of world

In a critical report published by the Singapore Straits Times, economists raised the question of whether resource-rich Malaysia had fallen out of step with the global environment. The Straits Times reported the arguments by economists that decades of state intervention that sought to meld free market practices with an ambitious social agenda to restructure the country’s multi-ethnic society in favour of politically dominant Malays had sapped Malaysia of its competitive edge as a destination for foreign investment.

Pumping more money into an economy, as expected of Najib will not solve the core problems in Malaysia. The Malaysian economy is not structured to expand or mature. Thus, the coming Budget announcement by Najib is in fact the fulfillment of Mahathir’s prophecy concerning the Pakatan Rakyat’s Budget.

Najib’s Budget 2012 will be an election budget, the GOM will spend money it does not have. It will be a Budget tabled to win back the large majority of Malaysians who have had to suffer under his premiership with rising living cost and dwindling subsidies.

Plug the leaks first, why pour water into a leaking bucket

This is why the Pakatan Rakyat’s initiative to remove monopolies and reform the political landscape is key to their budgetary reforms.This makes the difference.

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

Political reform would follow closely as only by removing governmental intervention in the economic landscape can Malaysia’s economy ever have a future. Simply put, the Pakatan wants to plug the leaks first before pouring in more water. Why pour more water into a bucket that is obviously leaking?

This is the scenario plaguing Malaysia, we have an economy that is full of leaks, corruption and secrecy in awarding tenders. The sudden flip-flopping of governmental directives also helps to contribute to the leakage of public funds.

And these are the very things we can expect Najib’s Budget will never address nor acknowledge. For by doing away with such leakages would only mean the death of BN’s feudalistic monetary structure, something Najib cannot afford to lose.

Malaysia Chronicle