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Deficit budget bad for investor confidence

 | June 20, 2012

Anwar asks if the additional RM13.79 billion that the government is seeking, on top of the 2012 Budget, really benefits the nation.

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KUALA LUMPUR: Opposition Leader Anwar Ibrahim today questioned the government’s move to seek an additional RM13.79 billion in operating expenditure for the 2012 Budget.

He asked whether this extra expenditure benefited the rakyat or cronies, saying that the perennial problem of increasing deficits is scaring away foreign investors.

“The management of the current Finance Minister Najib Tun Razak is really irresponsible because he does not care. As we see in this budget, it is all about the election, and there is no concern whatsoever for sustainability of the economy,” he said.

He said this while the Supplementary Supply Bill 2012 was being debated. The bill was tabled last Thursday and is now at its second reading.

“We want to stress that there is the deficit problem; the projection given by the finance ministry has shifted, it runs contrary to the facts.

“Because of this, we cannot be competitive and attract foreign investors. There is no investor confidence in Malaysia as an effective destination for foreign direct investments,” Anwar said.

He questioned the additional RM360 million allocated to the Election Commission (EC) for the preparation and management of the 13th general election.

“It is only in Malaysia where the job of cleaning up the [electoral] roll [falls] on the voters, not the EC. If there’s a person [on the roll] over 100 years old, you must object to it or the EC won’t care.
It does not make sense, and now we are giving money to the EC,” he said.

‘Cronies benefiting’

He also alleged that subsidies were more often for the benefit of cronies than the public.

Subsidy for petroleum was previously RM17 billion but now with RM7.465 billion allocated for subsidy payment claims on petroleum products, it has increased to 44%, he said.

“This means that in 2012, the subsidy is RM24.5 billion. I ask: what is the profit to the company, and what are the returns to the rakyat? Who owns (the company)? Who is the nominee, who has interests? I’m sure this won’t be answered.”

He said that sugar subsidy was previously RM200 million and now RM367 million was added with the new allocation.

“It adds up to RM567 million. Again, how much does the company get and how much for the rakyat? This is a 42% increase.

“Why? Is it true that sugar is based on international trade prices? How much is Syed Mokhtar’s (Al-Bukhary) Tradewind earning? If it is subsidy rakyat, then take care of the rakyat, why let big companies earn?”

He said that toll compensation was RM343 million in 2011 and now with an additional allocation of RM446 million, it would amount to RM789 million.

“That’s an increase of 400%. Where do the subsidies really go to?”

‘Only for deserving companies’

Anwar said that it was pointless to call it a “subsidy” if it is only to “ensure profitability of a crony company”.

He said that it was important for the leadership to be strict. “I really don’t understand how Umno people can defend such a thing.”

Last week, Deputy Finance Minister Awang Adek Hussin tabled a RM13.79 billion Supplementary Supply Bill 2012, seeking additional operating expenditure.

This was on top of an allocation of RM232.8 billion for the 2012 Budget approved last year.

Of the figures for 14 different ministries, the largest amount was spent by the Treasury General Services (RM11.2 billion). This was followed by the Works Ministry (RM445.8 million) and the Domestic Trade, Cooperatives and Consumerism Ministry (RM404 million). The EC was allocated RM360 million, while the smallest was for the Transport Ministry at RM2 million.

Meanwhile, Awang Adek said subsidies were not given to cronies but to deserving companies such as producers of flour and sugar, adding that this would make the price of such items cheaper.

“Subsidies are given to those who deserve them,” he said when replying to Anwar.

He also said that having two supplementary bills in a year was not something strange.

“It’s only twice, nothing strange; there were times when it was four times and no one complained.”


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