"We is not in crisis': You mean NOT YET! - Tony slams Najib for lack of transparency in Budget revision

Dato’ Seri Najib Razak’s budget revision announcement demonstrated utter contempt for the Malaysian Parliament and furtively left out the word “yet” in his repeated assertions that “we is not in crisis”

In today’s budget revision announcement by the Prime Minister, Dato’ Seri Najib Razak unilaterally revised the Malaysian budget and significantly changed the use of Government funds which was approved by the Parliament at the end of November last year.

The revision was made in the light of the drastic change in the global economic environment largely as a result of the steep drop in crude oil prices by approximately 60% over the past four months. Dato’ Seri Najib Razak who is also the Finance Minister finally conceded the obvious after repeated calls by Pakatan Rakyat, economists and financial analysts for the government to do so over the past 2 months.

However, the manner in which the announcement was made demonstrated the sheer contempt Dato’ Seri Najib Razak has for the Parliament, which on paper, is the highest legislative body in the country. The fact that the Parliament passed the Government budget and expenditure by law via a Supply Bill matter little to the Prime Minister, who has decided that he can change the will of the Parliament as he pleases.

PM Najib

Instead of being answerable to the Parliament, Dato’ Seri Najib Razak made the announcement in a hall of invited guests comprising of diplomats, the business community, non-governmental organisations as well as the Members of Parliament from Barisan Nasional. The Pakatan Rakyat Members of Parliament were completely ignored on such an important Government decision.

This decision by the Prime Minister leaves the Members of Parliament with absolutely no avenue to debate and decide on the changes made by the Prime Minister on the Budget which the Parliament has earlier approved. It also only proved the BN Government’s utter contempt and disdain for the Parliamentary institution whose sole role to them is to rubber stamp the decisions of the dictatorial executive.

While Dato’ Seri Najib Razak was certainly spot on to emphasize and prioritize an “orderly financial market” as well as the need for the return of a stable currency, he has unfortunately taken the easy way out by ignoring the elephant in the room. Instead, he deflected the blame squarely on events which were entirely “beyond the government’s control”, such as the steep decline in international crude oil prices and its consequent impact on the Ringgit. The Ringgit which depreciated more than 12% to RM3.59 to US$1 from RM3.20 was the worst hit of Southeast Asian currencies over the past 6 months.

For instance, the Prime Minister failed to highlight the fact that the Federal Government’s rising debt amounting to RM569 billion was substantially held by foreigners. As at 30 June 2014, foreigners held 30.3% of the Ringgit and US Dollar denominated bonds and securities issued by the Government making Malaysia highly susceptible to global financial fluctuations and instability. The persistent selling of foreign holdings of both our Government and private sector debt has been one of the key causes of the sharp decline of the Ringgit over the past 60 days.

In addition, Dato’ Seri Najib Razak failed to address the local and international financial communities’ concern over the RM42 billion debt load of 1Malaysia Development Bhd, a wholly-owned investment subsidiary of the Ministry of Finance. The failure of the troubled investment firm to repay a RM2 billion loan in November 2014 has also hit 1MDB's bonds and fuelled investor concerns about Malaysia's economy.

"1MDB will be a bit of a catalyst of the ringgit weakening...The concerns are whether the sovereign itself will have to take up the liability," said Wellian Wiranto, an economist at OCBC Bank in Singapore as reported by Reuters.

Similarly, Bloomberg reported Chua Hak Bin, an economist at Bank of America Merrill Lynch in Singapore commenting that “falling oil prices, concerns over the fiscal position and 1MDB may be compounding the pressure on both the ringgit and interest rates.”

The failure of the Prime Minister to table the Budget revisions in Parliament denied the opportunity for Malaysia’s elected representatives to debate these pertinent issues. The ominous omission of Malaysia and 1MDB’s debt crisis from his speech will certainly not lend any confidence to the financial markets on the Government’s ability to ensure an “orderly financial market”, meet its revised budget commitments and the 3.2% deficit target.

Tony Pua is MP for PJ Utara