Najib's 2013 Budget: Promises Made, Promises Broken

This is my budget which aims at “improving the quality of life of the people, ensuring sustainable growth, spending prudently and reducing the fiscal deficit,” said the PM cum Finance Minister in his address to parliament. Only I and UMNO can. Hear, hear!

He doesn’t promise the moon and the stars, says he. But at least he is aware that people want to ride the Rocket to go to the Moon to get Justice. Naik Roket pergi Bulan untuk dapatkan Keadilan!

The PM is lying on all counts. Or isn’t forthcoming. No sustainable growth, no prudent spending, no change in structural deficit. Can our economy sustain growth on the backs of undertrained labor force with MCE standard on average? The economy is sabotaged for want of productive labor force. Our own plantation sectors are short of 500,000 workers. High end growth is not possible if we have under-qualified labor force. Spending prudently is impossible for a government intent on riding the reindeer driven sleigh all year round.

PM Najib thinks he has proposed a fantabulous budget. I have dubbed it as the best budget since Adam in an article written in Malay. It’s more pronounced in its overarching agenda to give out monies to various selected groups. These are one off payments though- rebates, bonuses, one off payments to ex-servicemen etc. it seems every Ahmad, Ah Chong and Muthu get some tiny morsel which the master throws about.  He has promised RM500 payments to all low-income families, RM100 each to 5.4 million schoolchildren and handed a 1.5 month bonus to the country’s civil servants among other steps.

Take the money. They are all yours. For every Ringgit this government gives us, they take RM 100 back. After the euphoria wears off, everyone will still face the grim realities of increased cost of living. Just look around, the price of sugar has gone up as a result of subsidy in sugar being withdrawn. The price of Ikan Kembong has settled around RM 17 per kilo. The bag of 10kg price has gone up by RM7. The price of beef is around RM 24-26 per kilo in certain parts of the country. Aren’t all these included in the basket of goods when accounting for the official rate of inflation?

All food and beverage using sugar as its ingredient will go up in price. Will the increase in the price of sugar appeased the  makciks and the small traders selling foodstuffs using sugar as a main ingredient? They know when the price of sugar goes up, the person holding the monopoly on sugar will get richer.

How does this government justify the withdrawal of sugar subsidy which results in sugar price going up? The government is alarmed at the growing incidence of diabetes among Malaysians!

I read that former Trade and Industry Minister Rafidah Aziz complimenting the government on its agenda to reduce budget deficit. On what basis does she based her exuberance? On last year’s government’s success at reducing deficit? If she has been more diligent, she would have realized that was a fluke and luck. The government was able to keep its deficit below 5% at 4.7% for 2012 only because of an unplanned increase in revenue by RM21 billion for the year. If not for the above, based on the government’s expenditure in 2012, our deficit would have increased to 6.7%.

Do we have faith in this spendthrift government containing its inclination to overspend? The government has announced its plan in the 2013 budget to keep the deficit at 4.0%.  It appears this promises-made- promises- fulfilled government has reneged on its promise which is to reduce our deficit to 2.5% by 2015. That promise was made last year in 2011.

The government certainly did not take into account, of a decrease in our country’s revenue.  How not to if this is a government that lives on structural deficit? It builds this country up around amassing debt.

Our country is going to make less money. That isn’t going to allow the government to reduce spending. We have seen how Najib appears to ignore this fact as he reveled in playing the role of Santa Claus in parliament. He has offered no thoughts on how his government plans to undo the structural deficit. The budget demonstrates no political will on the part of the federal government to make the necessary structural changes to the way we manage our budget. We also do not see a serious effort to tackle federal government debt which has neared the 55% of Najib’s `tipping point’

The country’s public debt as a percentage of GDP is just short of its self-imposed ceiling of 55 per cent — up from 43 per cent in 2008 — while its expected budget deficit of 4.5 per cent in 2012 is among Asia’s biggest.

This government doesn’t have the political will to dismantle our overbearing bureaucracy. The civil service is already 1.4 million strong. We are certainly not reducing big government- so what Najib promised that his government will not be a government that knows what is best, was a lie. We are already into the stage of over-governed society.

Haven’t any of the Najib advisers heard of the Theory of Bureaucratic Displacement? In a bureaucratic society like ours, increase in expenditure will be matched by a fall in production. Can we justify absorbing all those lowly educated persons into RELA organizations paid out of government coffers? What role exactly do JASA members play other than serving as propaganda apparatchiks to UMNO. Other than serving as teachers for pre-schooling children, what role do the KEMAS people play other than serving as propaganda tools for UMNO. Why are we supporting an oversized unproductive lot?

Because under a bureaucratic society, these adjuncts to officialdom will act like black holes in the economic universe, sucking in resources but shrinking in terms of emitted production.