One of the saddest things this general election is the real lack of debate and analysis of the government and opposition’s economic policies. While there are many, many critics of BN and its economic approach, there is almost no rigour applied to PH.
June Wong, in a recent column for The Star, talked about the need for governance and how it would impact our lives. In this brief analysis, I will look at PH and what it promises. In so doing, I am actually concerned about the budget expenditure, revenues and deficit.
PH talks of abolishing the GST, claiming it is a major cause of our economic woes. In its place, it plans to implement the SST.
GST currently brings in about RM44 billion. This is bound to increase on an annual basis as goods and services are consumed by a larger population and prices increase.
SST, according to analysis, will bring in RM16.5 billion – a shortfall of RM27.5 billion.
The opposition makes a number of other promises as well. Here’s what they would cost:
- EPL rights – RM1 billion;
- Raising minimum wage by subsidising RM250 costs – RM75 million;
- Those over 60 to be paid RM150 – RM420 million if according to the figure of 2.8 million people in 2016; RM495 million if according to the figure of 3.3 million people in 2017;
- Basic medical allowance of RM500 for B40 group – RM1.35 billion;
- Royalty payments to East Malaysia – Current revenue is RM16.5 billion. According to the Penang Monthly, royalty is RM3.5 billion. This is increased four-fold in the opposition’s manifesto to RM14 billion – less RM10.5 billion for federal revenue;
- RM100 pass for public transport for B40 group – RM270 million;
- Abolition of Felda debts – RM5 billion according to Malaysiakini;
- Abolition of toll costs – Ong Kian Ming noted that Tony Pua had in 2009 estimated that the government would have to fork out RM1.4 billion to buy back the LDP highway concession, and that’s just the LDP;
- Retention of BR1M costs – this is not a constant and thus difficult to calculate;
- Cutting excise duties on imported cars below 1,600cc for first-time buyers;
- Providing one million affordable houses in 10 years – again, no costings for the two items above but if affordable housing is set at RM200,000, one million houses would equal RM200 billion;
- Returning 50% of RM129 billion to Sarawak and Sabah – RM65 billion;
- Increasing healthcare costs – RM49.45 billion;
- Postponing student loans – in 2017, student loans stood at RM4.8 billion and rising.
If we examine these policies, there is no real funding associated with them. The costs are high, and it is sad that no journalists have done more work to examine the impact of PH’s promises on the Malaysian economy.
So, to borrow from June Wong again, how is this good for the governance of the country when there is such a large amount of unfunded spending and potential future liabilities which will have to be carried by the young and future generations?
Loong Wong is an FMT reader.
The views expressed by the writer are not necessarily the views of FMT.