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Pakatan, BN economic pledges: A comparison

 | April 8, 2013

Pakatan’s manifesto relies heavily on dismantling BN’s handiwork, whereas BN pledges to expand the economy without a glance backwards.

PETALING JAYA: Although Pakatan Rakyat has accused Barisan Nasional of copying its manifesto, a comparison of their economic pledges leaves the impression that the opposition coalition is out of its depths.

To begin with, Pakatan falls noticeably short with regard to creating jobs for locals. Its manifesto says it will generate one million new jobs simply by reducing foreign labour.

This means that under Pakatan, the new jobs available for Malaysians will be of the non-skilled variety: waiting on tables, cleaning the streets, mixing cement. In Pakatan’s own words, these jobs are in plantations, the construction sector and the service industry.

In contrast, BN has promised 3.3 million new jobs, two million of which are in the high-income sector. This will be achieved not through driving out the people currently occupying those jobs, but by attracting new investments worth RM1.3 trillion.

Whether either of them will succeed is a big question mark, but credit must be given to BN for having more vision – or better job offers.

Floor wage

Pakatan mentions the minimum wage in its manifesto. BN does not,  most probably because the coalition is already implementing a minimum wage.

But Pakatan promises a floor monthly wage slightly above RM1,000. BN has promised a slightly lower wage of RM900 for Peninsular Malaysia and RM800 for Sabah and Sarawak. With the figures cutting so close, they are barely worth comparing.

But keeping in mind the uproar BN’s minimum wage has caused among employers – critics are claiming prices will soar and cash outflow will become “cash outflood” – one could conclude that things would be worse if Pakatan’s higher floor wage were to be implemented.

According to media reports, BN is relying on a cash-less solution to the foreseen problems – by  deferring implementation to July. Pakatan’s solution is to dip into public coffers and create a so-called Minimum Wage Implementation Facilitation Fund worth RM2 billion.

Neither one is guaranteed to succeed, but Pakatan’s minimum wage and the solutions to the problems that will come with it will clearly cost taxpayers and employers more money.


One glance at the taxes in BN’s manifesto suggests that it has taken a leaf out of Pakatan’s book but twisted it a little.

Pakatan says that the income band will be broadened so that the 26% tax rate will be payable for taxable income exceeding RM400,000, compared with the current RM250,000. This is apparently to prevent a situation where millionaires pay the same tax rate as executives in the private sector.

But since the existing tax rates are not increasing to compensate for the fact that fewer people will be paying them, far less money will enter the governments’ coffers.

Meanwhile, although taxable income remains the same under BN, the ruling coalition has vowed to lower individual and corporate taxes across the board, in stages.

Again, that’s obviously less money for the government, but without knowing BN’s exact tax rates, the jury is still out on whether Pakatan’s or BN’s tax options are better for the economy.

Small and medium industries

While the benefits BN and Pakatan have outlined for SMIs both lack detail, Pakatan’s is less impressive as it appears to be a shallow retread of what BN has already accomplished.

Pakatan has the National Innovation Fund totalling RM500 million “to strengthen the copyright industry and idea bank” and “to promote the commercialisation of ideas and inventions”. It also aims to “coordinate and promote SMI financing by financial institutions”.

But BN’s manifesto points out that it has already facilitated funding for SMIs through a RM1 billion fund managed by the SMI Bank, provided RM2 billion from 2008 to 2013 to Tekun for small-scale entrepreneurs and established Amanah Ikhtiar Malaysia, which provides micro credit facilities for small-scale entrepreneurs, mostly women.

And to match Pakatan’s National Innovation Fund, BN has unspecified “special  incentives” for “innovative and creative ventures” on top of a “transformation plan” and the establishment of a National Trading Company to source overseas markets for SMI products.

Race Agenda

BN’s manifesto states that it will implement policies that are “fair and equitable” to all races in Malaysia, including pro-growth policies, greater participation of the private sector and development of the capital market.

But, in an apparent contradiction, BN will still be providing race-based government aid. In fact, not only is it stubbornly sticking to its Bumiputera agenda, but it is even adding an Indian agenda as well.

BN says it will provide RM500 million in seed funding to increase the equity of the Indian community to at least 3% and set up a special unit to ensure the successful implementation of policies for the uplift of the community.

This is in direct contrast to Pakatan’s plan, whose broad-based policies are aimed at uplifting the Malaysian community as a whole. This approach is far more fair and tasteful. BN appears to have forgotten that there are poor Chinese as well.


Najib infamously announced more 1Malaysia People’s Aid (BR1M) cash vouchers and even upped it from RM500 to RM1,200 a year per qualified household and from RM250 to RM600 per qualified single  Malaysian.

As of March 18, 5.3 million of the BR1M 2.0 have been claimed, costing the government billions of ringgit.

But despite heavy criticism of BR1M being a vote-buying tactic, economists have said that the cash handouts would actually boost the country’s economy due to increased spending and consumption.

While Pakatan does not include a BR1M equivalent in its manifesto, PKR strategy director Rafizi Ramli promised today that the opposition would continue with the cash handouts should it win the election. This, then, puts them squarely on the same page.

Undoing the fathers’ sins

Meanwhile, Pakatan pledges to abolish, change or replace much of what its predecessor government has done to the economy in the past 56 years.

In looking to address “structural problems plaguing the economy”, Pakatan will abolish tolls, reduce oil prices, lower electricity and water charges, halt the rare earth plant in Kuantan and abolish monopolies, among other actions.

But it will no doubt take a huge chunk of Pakatan’s term to make such drastic changes. This means that the economy is unlikely to achieve much growth for the first few years under Pakatan rule.

Also read:

Barisan Nasional manifesto

Pakatan Rakyat manifesto


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