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Friday, March 30, 2012

Overspent, again!


LIM SUE GOAN, Sin Chew Daily
The Finance Ministry has sought approval for a supplemental budget in the Dewan Rakyat every year for additional expenditure by various Government agencies and ministries. This time, it seeks a total of RM10.29 billion. It is the second additional expenditure application in a fiscal year, and many are "political expenditures".
The government's account is just like a household's account. A family with a total monthly income of RM5,000 allocated RM4,500 on spending. However, when they saw a lovely handbag, they spent RM2,000 to buy it, causing a RM1,500 deficit for the month. Since they were unable to make ends meet, they had to use their savings or borrow money from relatives. The family could be destroyed as the debts snowballed over years.
The country has been having a fiscal deficit for 15 consecutive years because there is no proper control over expenditure. Oil revenues might still be able to sustain the huge expenditure today, but once we become a net oil importer, the "emperor's new clothes will disappear.
In June last year, the government had requested an additional fund of RM13.186 billion. This time, the government sought a supplementary budget amounting to RM10.29 billion, with some expenditures to be spent on preparations for the next general election. For example, a total of RM204.45 million has been allocated for the RM500 BR1M aid.
Last year, the government announced the cancellation and reduction of a number of toll charges, causing the Ministry of Works to pay a compensation amounting to RM100 million, which does not include the RM120.55 compensation for toll reduction of the Cheras-Kajang highway, which has been taken into effect in March this year.
To alleviate the people's burden, the government also increased subsidies for necessities. The additional fuel subsidy last year consumed RM4.45 billion.
The government had spent RM186.94 billion last year, far surpassing the RM181.6billion operating expenses tablet in the 2012 Budget.
Although the government's revenue had increased by 16.1% last year, the expenditure had also increased by RM23.4billion.
It is expected that the government will continue to have much additional expenditure this year. For example, RM6 billion is expected to be needed for the 7% to 13% of salary increment for civil servants. Also, after the surge of international crude oil prices, the subsidy for petrol increases by 10 sen to RM1.03 per litre.
If the election is further delayed, the expenditure would continue to rise as the BN government needs to keep the good feelings.
The national debt is currently accounted for 54% of the gross domestic product (GDP), and it is not far from the dangerous level of 60%. The national debt would go beyond the dangerous level in four or five years if we do not reduce expenses.
Therefore, the government is expected to reduce subsidies for petrol after the election. Minister in the Prime Minister's Department Datuk Seri Idris Jala also said that he hopes that the goods and services tax (GST) could be implemented after the election. If the government's annual revenue can be increased by RM25.7 billion, it would then enough to meet the urgent needs.
The deterioration of national financial situation and the implementation of the GST are national issues involving the people nationwide. These issues should be concerned and resolved by the ruling and alternative parties, but politicians have instead wasted time on minor issues.
Most members of the public can see only politics, but not a potential crisis. And everything would be too late when the crisis strikes.

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