The Budget proves the Najib Administration is only interested in cutting subsidies and raising tax without any intent to tighten the Government's purse strings

Media Statement by Tony Pua, DAP National Publicity Secretary and Member of Parliament for Petaling Jaya Utara on Friday, 25 October 2013 in Kuala Lumpur

Stripping the 2014 Budget of its comestic makeup, taking away the glossy distractions and analysing the bare bones will provide an extremely clear indication that nothing much will change in Datuk Seri Najib Razak's second term as both the Finance and Prime Minister.

The Economic Report 2013/14 gave the good news that the expected revenue collection for the current year 2013 is RM224.1 billion, or RM14.4 billion higher than the original budget projection of 208.7 billion.  

By right, the RM14.4 billion increase in revenue should have resulted in a lowered the projected budget deficit of 4% to a market-euphoric 2.6%.  The budget deficit for 2013 should have shrunk from RM39.9 billion to only RM25.6 billion.

However it didn't.  Despite collecting the significantly higher than expected revenue, the deficit for 2013 remained at RM39.3 billion.  It means that almost every single sen of extra revenue collected by the Government is immediately expended, instead of contributing towards reducing our debt.

What is interesting when you comb through the expenditure figures is that despite the increase in revenue, the actual Development Expenditure of the government was RM2.7 billion lower than the budgeted RM47.8 billion.  Development Expenditure has the larger economic multiplier effects because it represents investments by the Government for future higher returns.  Development Expenditure includes building schools, hospitals and other public infrastructure.

The lower than budgeted Development Expenditure, the higher than expected Government Revenue meant that the Government's Operating Expenditure exceeded the budget massively.  The Government overspent in Operating Expenditure by RM14.3 billion more the original budget of RM201.9 billion.

The above paints a forlorn picture for the Government's public finances because the BN administration has consistently and significantly overspent the Budget annually for the past 15 years.  They are completely impotent in enforcing financial discipline in Government expenditure.

A review of the 2014 Budget will show that it is primed for the same inevitable outcome as those of the past.  Dato' Seri Najib is seeking the Parliament to increase the operating expenditure further to RM217.7 billion, despite a massive RM7.3 billion cut in the subsidies budget from RM46.7 billion in 2013 to RM39.4 billion in 2014.  Effectively, that means whatever that is saved from the subsidies reduction goes entirely towards other Government operating expenditure.  

The biggest beneficiary is the Government's expenditure on "Supplies and Services", which will enjoy a RM2.0 billion increase in allocation to RM36.6 billion for 2014.  It is shocking that the Government needs to further increase the budget for "Supplies and Services" especially since the budget for it in 2010 is only RM23.8 billion.  That is a 53.8% increase in spending for "Supplies and Services" in just 4 years.

Why is the Government asking ordinary Malaysians to tighten their belts and suffer higher prices, but the Government chooses to continue with its big spending ways with "Supplies and Services"?  The subsidy cuts isn't going toward reducing our debt or deficit, instead it is just providing more funds for the Government to go shopping.  It should be noted that the annual scandals uncovered by the Auditor-General - purchases of ordinary products at outrageous prices are all part of this "Supplies and Services" budget.

One can easily tell that this Government has its priorities all wrong, when they decided to increase operating expenditure, but at the same time reduce development expenditure.  From a budget RM47.8 billion in 2013, Dato' Seri Najib is proposing a steep cut to only RM44.5 billion in 2014.  This means that the 2014 Budget has the lowest proportion of Development Expenditure in Malaysian history, of only 17.0%.  In 2003, more than 30% of the national budget was allocated towards Development Expenditure.

The 2014 Budget paints an obvious picture of a Government failing to reform despite a "brave" Goods and Service Tax (GST) proposal.  Without any attempt to instil financial spending discipline in the Government as exposed above, it does not matter how much additional revenue, budgeted or otherwise, the Government is going to receive.  The money will be spent and not saved or invested. Worse, the tax dollars will be spent on the wrong priorities.

Hence given the above context, the proposed and much-hyped GST isn't a policy of reform.  Instead, it is a measure of desparation to continue filling the coffers of the Government so as to reduce the need for the BN adminsitration to cut down on its excesses.

Using Petronas dollars, the Goverment has created and cultivated a bloated bureaucratic monster that has grown so big over the past decade, Najibnomics takes the easy way out by cutting subsidies and raising taxes to satisfy its out-of-control Operating Expenditure.  

Tony Pua

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各报／电子媒体新闻主任

 

民主行动党全国宣传秘书暨八打灵再也北区国会议员潘俭伟25-10-2013（星期五）针对2014年财政预算案发表评论，请刊登，谢谢。

 

2014年度财政预算案证明纳吉政府只著重于削减律贴和增加税务，根本无意缩紧政府开支。

 

抺去2014年财政预算案“涂上的浓妆”，摒除虚有其表的事物和从本质上进行分析，将提供一个非常明确的讯息，那就是拿督斯里纳吉二度兼任首相和财政部长，将不会带来任何改变。

 

2013／14年经济报告书捎来一个好消息，即中央政府2013年的实际收入可高达2千241亿令吉，也就是比2013年财政预算案预期的2千零87亿令吉，高出144亿令吉。

 

照理说，增加的这144亿令吉收入，应该会促使2013年预算案中的4%财政赤字降低至令市场欣喜的2.6%，亦即2013年的财政赤字，应该从399亿令吉减少至256亿令吉。

 

但现实却非如此。尽管政府所得显著高于预期，但2013年的财政赤字仍维持在393亿令吉。这意味着中央政府所额外收获的每一分钱，都被花掉，而不是用来减少我们的债务。

 

即便收入有所增加，但有趣的是，中央政府实际的发展开销，卻比预算案中所预计的478亿令吉減少了27亿令吉。发展开销具有更大的经济乘数效应，因为它代表着政府对未来的投资。发展开销包括建筑学校丶医院和其他公共基设。

 

发展开销比预算案中的少，但政府收入卻比预期中的高，这意味着政府的营运开销严重超出预算。政府的营运开销，比2013年预算案中原本估计的2千零190亿令吉，超支了143亿令吉。

 

上述种种曝露了政府公共财政的凄凉实况，因为国阵政府在过去15年所提呈的财政预算案，年复一年的严重超支，他们在执行政府开销的财政纪律是彻底无能的。

 

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