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Saturday, January 30, 2016

We aren’t out of the woods yet

Najib has bought himself some time with the revised Budget 2016, but he must not ignore the need for sacrifices.
COMMENT
najib-economy-budget-2016
It looks like happy days are at last upon us again. If you earn RM8,000 or less a month, you’re now entitled to a RM2,000 special tax relief. The employee contribution to the EPF has been reduced by 3% while the employer contribution remains the same. The ringgit is rallying in the markets, and oil is regaining some lost ground. It would seem like we can now shrug off the tumultuous events of 2015 and say to ourselves, “Syukur Malaysia aman” and move on with our daily lives.
In truth, Prime Minister Najib Razak’s revised Budget 2016 isn’t too bad. It takes several steps aimed at reducing the burden felt by the people, who have paid out RM51 billion in GST in less than a year. And it does look like these steps will go some way towards alleviating the pressure felt by many families and individuals living in the city.
The decision to maintain PSD scholarships is also a wise one. No developing country can afford to ignore the development of its young people because its future success depends on their success.
However, Najib has not tightened the belt around the worst excesses of his administration, for which the Prime Minister’s Office is particularly notorious. The reasoning is that the revised budget will hold even if the price of crude oil should go a little lower than the estimate of US$30 per barrel. Apparently, drastic cuts are not yet necessary.
However, that seems a lot like waiting for the doctor to tell you that you have cancer when you already know you have it. The bloated nature of our public institutions must be addressed in an honest manner. We’re tired of seeing the same thing in the Auditor-General’s report every year – that the government has been wasting public money. We are tired of seeing massive allocations going to departments that do not benefit the public in any meaningful way.
We are not out of the woods yet. While the revised Budget 2016 has rallied markets, the issue of the Prime Minister’s credibility is far from settled, especially with reference to the RM2.6 billion donation and the controversy surrounding 1MDB. The Attorney-General’s announcement that he found Najib blameless has been covered by virtually every major news outlet in the world, and often in a sceptical, if not outright incredulous, tone. This may influence decisions by foreign investors.

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