Budgeting with an eye on political profit


PETALING JAYA: An economist has described both Budget 2017 and Pakatan Harapan’s proposed alternative as “political budgets”.

Speaking to FMT, Professor Hoo Ke Ping said the budget proposals presented by Prime Minister Najib Razak last Friday were obviously geared towards ensuring a general election victory for Barisan Nasional. He pointed to the numerous goodies given to a wide spectrum of society and especially to rural communities.

He said it was obvious that the government felt it made better sense to consolidate its support among the Malays than to try to win over the Chinese and other non-Malays, which have largely rejected Barisan Nasional.

Hoo noted that Budget 2017 especially provided a lot of funds to parliamentary constituencies that had a strong presence of Felda, Felcra and Risda settlers as well as oil palm smallholders.

“These areas combined account for at least 60 parliament seats,” he said.

He also noted that the budget took care of rural areas controlled by PAS, saying this indicated possible cooperation between BN and PAS.

On Pakatan Harapan’s alternative budget, Hoo said it centred too much on an “anti-Najib” theme and had too many populist proposals that defied common sense.

“Pakatan Harapan opts to do away with the Goods and Services Tax (GST) in favour of the old Sales and Services tax,” he said. “But the GST is the most progressive form of taxation around and 168 countries have adopted it. Do Pakatan Harapan leaders think they are smarter than the leaders of 168 countries?”

Hoo said a sales tax system was inefficient and would create an underground economy because unscrupulous companies would try to bypass it.

He added that the opposition pact was not being realistic with its proposals to reduce the number of foreign workers in the country and to legislate a RM1,500 minimum wage.

“The Small and Medium Enterprises (SMEs), which contribute 36 per cent to the country’s gross domestic product, will collapse if there are not enough foreign workers and if wages were set so high,” he said.

He said the productivity of SMEs were adversely affected when the government decided on a freeze in the hiring of foreign workers.

“Pakatan Harapan cannot have its cake and eat it too,” he added.