Wednesday, October 19, 2016


As posted by Dr. Mahathir Mohamad at Che Det on October 19, 2016

1. The 2017 budget will be presented to Parliament on 21st October 2016.

2. No doubt huge sums of money will be allocated to the Ministries and agencies of the Government. Parliament will surely pass the budget because it is the budget presented by the Government party which has the majority in Parliament.

3. But the people know that the Government has not got the money to meet the budget. They know that Ministries in the last two years have been told that the money is not available and therefore they must spend less than what is budgeted for.

4. The budget is actually meaningless because the Government knows it will not have the money.

5. Why will the Government not have the money? It is because Government money is not used for good governance, for the development of the country and the well-being of the people.

6. The money is being used for winning popularity for the Prime Minister.

7. For this the Prime Minister has created sinecure jobs for a lot of loyalists. There are now nine Ministers, three Deputy Ministers in the Prime Minister’s Department.

8. There are now 51 divisions in the Prime Minister’s Department. The budget allocation for the Prime Minister’s Department has risen from RM5.2 billion in 2000 to RM20 billion in 2016, a four folds rise. It is 13 per cent of the 2016 budget of RM267 billion. It was less than four per cent between 2000 and 2008.

9. A large portion of the Prime Minister’s Department fund goes to unspecified programmes which the PM controls. If we see the PM giving away money to organisations and individuals not named in the budget they must come from these allocations.

10. Under BR1M, 7 million people got initially RM500 each. Now they are promised RM1,000. There will be more increases next year.

11. At RM500 it will cost the Government RM3.5 billion. At RM1,000 it will cost RM7 billion.

12. Perhaps the very poor would benefit but for most of the recipients RM500 for a year is meaningless. The better thing to do is to give the really needy, the hard core poor sufficient monthly allowances to support their lives. For the rest create jobs and train them. But the Government is not encouraging job creation. Local industries are not supported. But imports are encouraged.

13. Emoluments have also increased, rising from RM26 billion in 2003 to RM89 billion in 2016. But Federal revenue is decreasing relative to the GDP. Because the Government believes in high income as the indicator of the level of development, salaries are increased without any regard for revenue or productivity.

14. In the first place per capita income is not the real criteria of the level of development. Many oil-producing countries have very high per capita income but are not considered as developed.

15. What is important is the purchasing power of the income. The rise in the cost of living has negated the benefit of high income. The new budget is likely to cause the cost of living to rise. It will affect the standard of living adversely. This will be especially so if the GST rate is increased.

16. The depreciation in the value of the Ringgit will also affect the purchasing power of the income. Since the Government does not believe in local industries which can benefit from a cheaper Ringgit but encourages imports, the cost of these would go up as the Ringgit depreciates. There will be a greater outflow of funds, resulting in trade deficits.

17. The Government has been increasing the minimum wage. This will increase the cost of production much more than anticipated. Not only will those earning less than the minimum pay get a rise in their pay but those earning above the minimum wage would expect and demand their pay to be increased to maintain parity against those working under them. Overtime pay and holiday work will have to be increased. All these would increase the cost of doing business in Malaysia. Already many foreign-owned manufacturing companies have left Malaysia, contributing towards unemployment.

18. The real economy will continue to suffer, and along with it the well being of the people. Many professionals are leaving the country to look for jobs in other countries. We are going to be one of those countries dependent on remittances by our people abroad.

19. The level of borrowings by the Government has reached record levels. Future generations will have to pay these loans.

20. All these will not show up in the budget. But the people will know as they struggle to make ends meet.

21. This is the real 2017 budget.