All eyes on Selangor's Budget: Will it be enough to stave off BN?

Mentri Besar Khalid Ibrahim is due to table the Selangor Budget for 2012 on Wednesday, and he has already hinted that it will likely be a balanced budget despite pressure to dole out 'goodies' ahead of snap general elections widely expected to be held early next year.

However, Khalid can be relied on to unveil a slew of people-friendly measures directed towards affordable housing, senior citizens and its popular free water program.

"The trick is how to give out goodies without having to end up borrowing money, like the federal government has had to do. Generally, keeping a balanced or a slightly deficit budget is recommended given the uncertain economic times ahead. Things will surely get worse before they get better, so don't use all your bullets now," an economist at a bank-backed brokerage told Malaysia Chronicle.

Indeed, given the harsh criticism leveled at Prime Minister Najib Razak's RM232billion federal budget, Khalid can be expected to want to avoid the same mistake. Selangor financial adviser Anwar Ibrahim, a former Finance minister, will also play a moderating hand in the spending plan.

Balanced Budget

Selangor is the Pakatan Rakyat’s crown jewel, and the way in which the coalition manages the nation’s most developed state will be scrutinized by all quarters including financial analysts and rival politicians. As an indication of how important the state is, Prime Minister Najib Razak is personally leading the BN's charge to regain control of Selangor. He has vowed to use all ways and means to do so.

For 2012, Khalid is expected to announce a total allocation of around RM1.5bil, up from RM1.43bil allocated for 2011. Penang recently unveiled a slightly deficit Budget, but Selangor which chalked its highest cash reserves in 28 years this year is likely to balance its books.

“I expect the Selangor Budget to follow the same budget trend for 2009, last year and this year, with a series of welfare and social empowerment programmes to assist the poor to keep up with the rising cost of living, as well as to maintain and improve basic infrastructure in rural areas and new villages,” Star reported Bukit Tunku assemblyman Lau Weng San as saying.

““We only spend on what we need and we do not take more than that. However, along the way, if there is a need to spend on something important, we will look into our account to see if there are enough funds,” said Subang Jaya assemblyman Hannah Yeoh.

Welfare, education, housing given weight

Of the RM1.5billion allocation, Khalid has hinted RM700mil will go towards welfare programmes. He is expected to continue to channel RM500million to the “Mesra Usia Emas” or Senior Citizen-Friendly program. About RM150mil is allocated annually to provide 20 cubic metres of free water to each household.

The state government is also likely to focus on assisting the bottom 10% to 20% of poor people as they were the most vulnerable group, hit by a series of price hikes after Najib slashed a slew of subsidies.

Lau also expects some benefit for students in the state. “Currently, we are not providing any scholarships and our study loans are not as attractive as those provided by the National Higher Education Fund Corporation (PTPTN),” he said.

Pakatan, which has been championing a minimum wage for workers, is also expected to introduce a minimum wage of RM1,500 for staff of Selangor state government-linked companies.

The lower middle income group can look forward to affordable housing, with news have spread that the Selangor State Development Corporation (PKNS) will build 11,000 units of homes measuring between 850 and 1,000 sq ft to be sold at RM100,000 each.

Other projects that are expected to be announced in the budget are the RM3mil closed-circuit television programme, the Petaling Jaya City Council local government elections, RM5mil for development of new villages and RM4mil for development of traditional villages.

Each state constituency may get RM1mil each to upgrade roads, bridges and drains.

Accounting for every sen and shutting the door on corruption

However, not all were too pleased with speculated Budget details. The BN, which is the opposition in Selangor, will surely find all ways and means to discredit the spending plan.

Among these were MCA’s Kuala Kubu Baru assemblyman Wong Koon Mun, whose gripe was with the affordable housing scheme. He alleged that the Mentri Besar was promoting PKNS projects at the expense of private developers.

“Private development is very expensive now due to high land conversion premium. The premium is now based on the new value of the converted land, rather than the initial value of land as previously practised by the Barisan government,” said Wong.

He also cast doubt on how Selangor Pakatan could manage all its 'grand' plans under a 'balanced' budget.

But other Pakatan leaders said it was not difficult. "The trick is not to be corrupt and to use all the money properly. It makes a huge difference," PKR vice president Chua Jui Meng told Malaysia Chronicle.

Malaysia Chronicle