Missed opportunity for a unity budget

 

MP SPEAKS | The DAP regrets the missed opportunity for a unity budget presented by the Federal Government yesterday that does not fulfil the six key recommendations by Pakatan Harapan with unrealistic projections, financial half measures and political handouts where the 8.6 percent increase in Budget 2021 is not shared by all segments of Malaysian society.

The DAP is particularly disappointed that there is no automatic extension of the bank loan moratorium up to M40 group. This would mean that hire purchase and housing loan borrowers will have to pay their interest and compounded interest respectively from October this year.

We live in unprecedented times of the triple crisis of a global Covid-19 health pandemic, an economic crisis with record unemployment and recession, and a political crisis where the Perikatan Nasional government has lost its parliamentary majority.

However, the Budget 2021 is very much “business as usual” without addressing the triple crisis especially fighting Covid-19 health crisis and the once-in-a-century economic crisis.

In such dire times, instead of responding to calls for a “unity budget”, an RM85.5 million allocation was given to Jabatan Hal Ehwal Khas (Jasa) and this has angered Malaysians.

Shouldn’t the RM85.5 million be spent on dilapidated schools, which was only given RM58 million, or childcare facilities for frontliners (RM30 million)?

During the BN rule, Jasa was given around RM20 million per annum while Harapan abolished the agency altogether. In a normal democracy, there is no place for such propaganda agency that uses public funds to spread lies and fake news.

Parliamentary rules provide for the finance minister to represent the government to amend the budget proposals. 

The DAP calls on Prime Minister Muhyiddin Yassin and the government to commit publicly immediately to withdraw the allocation to Jasa if the government is sincere in seeking a unity budget.

The projected budget deficit for 2020 increased from the original estimated 3.2 percent of Gross Domestic Product (GDP) to 6.0 percent of GDP or RM86.45 billion.

We believe that the Finance Ministry can achieve the six percent deficit this year but we doubt that the projected 5.4 percent budget deficit for 2021 is realistic in view of declining trade and GDP growth globally following the latest wave of Covid-19 infections.

Further, commencing fiscal consolidation by 2021 is too early and 5.4 percent GDP deficit for next year is too low to achieve the goal of economic recovery and help distressed Malaysians and companies.

The government should boldly spend and invest in what is necessary to overcome this Covid-19 crisis, by at least allowing an additional four percent deficit of GDP in 2021 on top of the projected 5.4 percent.

These GDP figures were calculated on the basis of the economy contracting by 4.5 percent in 2020 and growing at 6.5 percent to 7.5 percent in 2021, which is overly optimistic.

The amount for the Covid-19 fund should go beyond the RM17 billion that has been allocated in Budget 2021, far below the RM38 billion this year.

The DAP is also against the massive cuts to the non-Covid part of the health budget. The Health Ministry budget has been reduced by 20.5 percent from RM14.2 billion in 2020 to RM11.3 billion in 2021, including a 74-percent decrease for pharmacy and supplies.

In a time of economic crisis when most Malaysians would look to government health services for help as many would not be able to afford private healthcare, the cuts are shocking and cruel. Amidst the Covid-19 health crisis, the need to ensure Malaysians’ health is well-taken care off is especially crucial.

The DAP calls on the government to commit to an additional four percent deficit spending for 2021, calculated on more realistic GDP figures.

Direct cash payments to families and individuals in the B40 and M40 categories as well as the continuation of the Workers’ Subsidy Programme should be widened to include genuine unemployed workers. As such, we ask for greater expenditure to help families and SMEs to get back on their feet in 2021.

We take note of some of the measures announced in Budget 2021 which are consistent with the six demands that Harapan presented to the Finance minister during our budget consultation session on Nov 1.

This includes additional resources in the fight against Covid-19, additional investments in broadband and internet services to schools and additional financial assistance to SMEs in Sabah.

However, many gaps remain that did not meet the six recommendations by Harapan.

In particular, the automatic extension of bank loan moratorium (excluding the top 20 income earners) costing RM6.4 billion and benefiting eight million Malaysians and companies with a value of RM100 billion, creating 600,000 jobs with wage and hiring incentives for employees and employers costing RM13 billion, and increasing monthly welfare payments to RM1,000(including unemployed) costing RM12 billion.

This is disappointing.

If the government is serious about passing a unity budget, a further discussion must be held with the opposition parties and backbenchers on alternative proposals and amendments to the Budget 2021 from now to Nov 25 when a vote at the Policy Stage would take place in Parliament.

Only a unity budget with the right kind of assistance and support to ordinary Malaysians and Malaysian companies can succeed in overcoming the triple crisis of political instability, the Covid-19 health and economic crises as well as allow us to invest and reinvest in our future.

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LIM GUAN ENG is Bagan MP, former finance minister, and former Penang chief minister. - Mkini

The views expressed here are those of the author/contributor and do not necessarily represent the views of MMKtT.