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Sakmongkol ak 47

Monday, 1 September 2008

Budget deficit yes, mental deficit no!

The state budget debate.

Usually the Pahang Dewan Undangan Negeri sits towards the end of the year to debate next year’s budget. This is a very important session to study the state’s financial health. It is also a chance to study the management of our finances.

As usual, I think the Pahang budget will be in deficit. This means of course our expenditure exceeds revenue. If I am not mistaken, Pahang has experienced deficit budgets continuously for a number of years. The cumulative deficit should be over RM100 million still.

A current deficit in our budget is not the end of the world. Whether a deficit is good or otherwise depends on the state of the economy. Is our economy at or near full employment?

Then there is the question of the application of the expenditure. Is the bulk of the expenditure applied to revenue generating activities? Or is the expenditure soaked up by operating expenditure?

But what is irksome is the simplistic and naïve arguments that usually accompany the budget session. It is not a question of ‘ when you need to spend, you spend’. This is not the issue. It is also not an issue of we need to incur deficits because we need to spend on welfare, helping the less fortunate, the infirmed, the old etc. its also not an issue whether no deficits will bankrupt the state. The state and country will never go bankrupt because they can always print money.

Indeed what is bothersome is the cavalier attitude that accompanies the budget debate. Most representatives will cruise along supporting the need to incur extra expenditure. The usual ready made answer meant to downplay or brush aside any contrarian thinking, will be the need to spend on welfare. The whole attitude will be characterised by who cares about deficit when people’s welfare is more important!

No one in their right mind will object with the lofty aim of relieving the hardships of the poor, old, infirmed and the less fortunate.

But we expect a higher level of argument from our reps. If the state is experiencing deficits why is it so? Why are we not generating sufficient revenues? Is our tax base not adequate? Is our efficiency in collecting revenue maximum?

A deficit should be scrutinised intensely because it could after all, masquerade financial management incompetence and corruption. Has the head of a department carry out a thorough examination justifying his department’s financial needs?

The twin evils that can bring down this government is corruption and incompetence. For example, it will be useful for our representatives to establish whether the budget deficits are caused by the following anomalies;

1. a piece of car jack that costs RM50 was bought for RM5,700

2. one set of set screw driver costing RM32 became RM 224

3. two units of crane towers that cost RM2.98 million, billed for RM5.72 million

4. a set of 10 technical books bought at RM 10,700.

5. A unit of 3.1 megapixels camera which costs around RM 1000 bought for RM 8,254.

These are information gleaned from the auditor general’s report. I am willing to swear by ‘potong ayam’, the favourite swearing method of my blogger friend( the originator of the acronym BUDU) that hardly any of the representatives ever read the financial reports and documents given to them.

So, while we incur budget deficit, let us avoid mental deficit. I urge our representatives to put forward arguments meant to provoke intelligent discussion. The sitting MB, while having the face of a Mafiosi enforcer, has the intellectual temperament to accept good argument, even contrarian ones.


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