A budget of quantity, with no quality?

 

The main trouble with our budget is that 73 percent of it goes to pay government operating expenditure (OE). This includes debt servicing (paying debts of previous years), which is 12.1 percent of the total budget.

The cost of paying salaries and emoluments for the government machinery and apparatus is getting more and more expensive as the burden to employ them all rests entirely with the government, rather than being outsourced.

Questions to ask:

Do we have an efficient civil service within the government? No.

Do we have effective government machinery? No.

That being the case, it also simply means that the basic budget templates have not changed much over the years.

Unless this government is willing to reduce this OE, change its policies, reduce the number of civil servants and bring in the private sectors to play a greater role in providing some of the services rendered to the public, nothing new will happen. Tax money will continue to be spent in this wasteful manner.

With the Covid-19 pandemic used as the main excuse, this is the best chance made available to the government to move away from the traditional templates and invent a new one. But this budget is far from being revolutionary.

The second part of the budget refers to the development expenditure (DE) which in this case represents only 27 percent of the budget total, of which 5.3 percent is allocated to Covid-19 expenses. The balance, 21.7 percent, is meant for the actual DE.

This is the portion which, in my opinion, the finance minister appears to be struggling with and does not provide any clear direction.

Although DE is often pointed out as a means to drive the economy forward and address the financial difficulties faced by many Malaysians, especially the B40 group, it doesn't reflect those objectives at all.

To many people, businessmen and politicians alike, this is the portion where the Finance Ministry has failed miserably.

There are many items listed within this 21.7 percent or over RM67 billion of the DE. Some are quite relevant to boost our fledgeling economy, while some are totally irrelevant and should not be considered at all.

Among the many, several large scales and highly expensive transport projects are included in the allocation. High Speed Rail (HSR) and MRT3 projects are also listed in there.

In my opinion, it is far fetched and overly luxurious to include HSR and MRT3 in this deficit budget as it may not have the necessary prerequisites to reverse the nation's negative economic climate and trend.

In fact, HSR and MRT3 projects will have the opposite effect as both are very expensive for a deficit budget to bear for many years to come.

HSR, for instance, has become nothing more than a slogan for the International Trade and Industry Ministry and the Transport Ministry, without a clear understanding on how the travel market between KL/Singapore has declined in the last one year.

The Covid-19 pandemic has not only caused travel demand for this city pair to drop but many transport services suppliers, such as express coach, airlines and train operators are facing financial difficulties with the likely eventuality to close shop.

The budget should only be allocated once the economic benefits can clearly be defined, quantified and stated.

How could we be so naive to allocate a budget for a new transport system when issues and problems faced by the existing operators, who are in dire financial straits, have not been addressed and resolved satisfactorily?

A project that we do not really need

What about the staff and workers of those operators? Do we have any safety nets for them to fall back on?

Why are we allocating our hard-earned taxes and limited income to a project that we do not really need at this moment in time?

The Finance Ministry should not pretend or use the simple excuse that these high ticket projects are necessary to spearhead our battered economy. This is not true at all.

In fact, it does not make any sense, financially, for us to embark on these expensive projects during this difficult period.

The high-speed train technology, from its track, locomotives, passenger coaches, electrical components and signalling systems, are to be fully imported and would be supplied by foreign companies.

Paying billions of dollars to foreign companies and suppliers will not help the local economy at all.

For sure, we do not have homegrown companies involved in the manufacturing of any of these components, both for HSR or MRT.

Therefore, we have no companies to protect and no employees to support as far as these two projects are concerned.

Local content

Just take a look at the ECRL contracts. How much of the RM40 billion price tag, the contract of which had been awarded to foreign companies, actually trickled down to local Malaysian companies?

How many local consultants are involved in this mammoth project?

How many local equipment suppliers have benefited financially?

How many jobs were created for the local people?

So, all in all, where are the local contents that the government has been harping about that have helped to rejuvenate the local economy and resolved the high unemployment problems?

Perhaps the Finance Ministry, the Transport Ministry or MR Link, the agency that is supposed to manage this ECRL project, should come clean and publish all these data and information on a regular basis.

Let the public scrutinise it, to see if the argument for economic benefits and job creation hold any water at all. Make these data as your standard KPIs.

For the sake of clarity and transparency, publish the data and information related to these projects as well, and show us the local contents and the number of local employees.

I very much hope that our MPs are sufficiently literate and figure savvy to read deeper into the numbers, especially the 21.7 percent of the DE allocation.

Hopefully, they are willing to pose many questions on why there is so much quantity, RM332 billion of it.

But where is the quality?

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ROSLI KHAN is a practising transport and logistics professional, academician, consultant and company director with over 30 years of experience. - Mkini

The views expressed here are those of the author/contributor and do not necessarily represent the views of MMKtT.