Govt must address fiscal issues raised by Johari

 

From Ibrahim M Ahmad

The unity government ought to take seriously MP Johari Ghani’s (BN-Titiwangsa) push for greater transparency in fiscal affairs as it looks to put the country back on sure footing.

Speaking in the Dewan Rakyat on Monday, Johari urged the government to avoid the practice of camouflaging the nation’s financials to keep sensitive expenditure off its balance sheet.

The former second finance minister cited the improper classification of RM300 billion in borrowings taken out to combat the Covid-19 pandemic as “development” rather than “operational” expenditure.

Johari is correct.  Such actions show a lack of transparency, and Prime Minister Anwar Ibrahim must investigate why this was done and hold those responsible accountable for it.

Apart from that, Johari also called on the government to put Petronas’ dividend payouts to better use rather than simply to finance Putrajaya’s extensive subsidy programmes.  He also called for more accountability and stronger action to recover 1MDB assets and losses incurred as a result of the debacle.

This is not the first time Johari has shown a keen eye for numbers relevant to the national budget and economy.

In an earlier speech delivered when debating the King’s opening address to Parliament recently, Johari cited data showing a stagnant gross domestic product (GDP), an unhealthy imbalance between the country’s investment and consumption growth, and low job-creation numbers.

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That being the case, Anwar and his cabinet would do well to take seriously what the Umno vice-presidential candidate has to say in these matters.

Make no bones about it: Budget 2023 was a massive disappointment.

While Anwar may have been keen to fire it up with religious quotes, literary citations and political rhetoric, economists saw through the smoke what was essentially a repackaging of the budget’s first iteration delivered by Ismail Sabri Yaakob’s administration in October last year.

Regrettably, some seemingly obvious measures which needed to be taken were once again overlooked.

Chief among them is the need to rein in the massive cost of running the government and maintaining our bloated civil service – a big component of the RM289.1 billion needed as operating expenditure, representing almost 75% of the RM388.1 billion budget.

Regrettably, Anwar was unable even to admonish Cuepecs president Adnan Mat for having the audacity to express his disappointment that civil servants were not promised yet another wage increase. Instead, the prime minister simply told them to “be patient”.

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Likewise, calls for the reintroduction of the goods and services tax (GST) were also ignored, presumably because it had previously been turned into a political hot potato by Anwar’s Pakatan Harapan – then in the opposition – in the lead up to the 2018 general election.

Budget 2023 also failed to put forward any framework for the rationalisation of subsidies.

There was no sign of the often talked about “targeted subsidies”, a concept many have championed but no one has been able yet to define, let alone implement.

Neither did it propose any sound mechanism which would allow cash aid to be handed out directly to those who actually need it, as repeatedly called for.

Finally, Johari made a critical point about the government appearing to have surrendered too much in efforts to recover 1MDB assets and losses.

He says Muhyiddin Yassin’s administration failed to put the nation’s interests first when agreeing to recover only US$2.5 billion (RM11.2 billion) of Putrajaya’s US$ 6.5 billion (RM29.12) claim against Goldman Sachs.

That has resulted in an instant loss to government coffers of almost RM18 billion, according to present day exchange rate values.

In an interview earlier this month, Johari attributed these losses to “inadequate negotiation” on the part of Muhyiddin’s government, which, he said, had deprived public coffers of an additional sum of US$1.4 billion (RM6.2 billion).

According to Johari, Goldman Sachs had promised to secure that sum for Putrajaya through the recovery of 1MDB assets.  Why did we not insist on payment in cash?

Without doubt, success in recovering 1MDB losses would improve the government’s finances significantly. Sadly, the budget speech made no mention of efforts to that end.

Transparency dictates that Anwar must disclose what concrete actions his government intends to take to secure their recovery.

In this regard, surely it is in the public interest for government officials, especially the attorney-general, and the lawyers who acted in the recovery efforts and the settlement negotiations with Goldman Sachs to be asked to explain their actions.

Ultimately, transparency means the rakyat is entitled to know. - FMT

Ibrahim M Ahmad is an FMT reader.

The views expressed are those of the writers and do not necessarily reflect those of MMKtT.