WHY NAJIB MAY WISH TO QUIT: AFTER MASSIVE SPEND, GOVT SET TO FACE RM10-20 BIL SHORTFALL IN NEXT FEW MONTHS

The Prime Minister Datuk Seri Najib Razak recently announced that the government will be tabling a recalibration of Budget 2016 to accommodate the changes in the global economic environment.

However, he did not specify when the recalibrated budget would be tabled, but said that it would be done soon.

The initial budget was based on the assumption of US$48 (RM210.61) per barrel oil price but now the price has dropped to US$33 (RM144.80) per barrel, adversely affecting the country’s revenue.

Kelana Jaya Member of Parliament Wong Chen of PKR says that in the next few months, the budget will face fiscal shortfall.

“How big that one is - the government needs to tell us. My guess is RM10 to RM20 billion - that’s my guess.

“It will be good if the government come out and tell us how much shortfall is the country facing and where the government is going to cut the budget allocation from,” says Wong, who is considered an economy expert in his party.

He adds the government needs to state from which ministries he is planning to cut the budgets in order to prepare the country to face this recalibration.

“Najib needs to come forward with proper transparency and state how big the problem is. This recalibration shows the government’s admission that they have a fiscal problem and this is not a good sign at all,” says Wong.

He also indicates that a revision of a budget in this form does not look good as the government is revising down the budget.

“To recalibrate a budget is not something uncommon. It is usually done if there are changes following the economic status.

“However, the past 10 budgets that had recalibrations done were not the same as this one. It was always spend all the money and they would realise later that they have overspent and they will say, ‘oh sorry we overlooked’, but by then it is too late,” says Wong.

In reply to whether the recalibration would affect the people, Wong says it depends which of the ministries or government-link agencies have direct effects from budget cuts.

“For instance, if he (Najib) cuts MACC (Malaysian Anti‑Corruption Commission) it will disrupt them from carrying out their responsibilities in investigations. Another example would be PTPTN (National Higher Education Fund Corporation), the victims of this budget cut would be students who are in need of this education loans,” says Wong.

Najib, who spoke during a speech at the Finance Ministry also states that in the next tabling, he will also elaborate the additional steps that needs to be taken, such as to optimise spending and the role of government-linked companies. - http://www.theheatmalaysia.com/