How Pakatan aims to finance its budget
Pakatan Rakyat today defended its “prosperity for all” budget, saying that the fund to finance its RM220 billion allocation would come from various existing revenue sources, loans and other measures to improve income.
The opposition’s 2012 “shadow budget” was criticised for being too simplistic, with some analysts saying the amount “was plucked out of thin air” and not based on realistic estimations.
Yesterday, Opposition Leader Anwar Ibrahim, who unveiled Pakatan’s budget, said that as much as RM220 billion will be spent to implement measures that will “add 20% value into the rakyat’s money”.
PKR strategic director Rafizi Ramli told a press briefing that the amount set by Pakatan is not far from the Barisan Nasional’s, which is expected to be in the region of RM230 billion.
Based on improved tax collection and increased revenues from oil and gas in 2011, Rafizi said Pakatan expects total government income for next year to stand at RM181 billion, which will not be far from Putrajaya’s estimate.
Although the estimation will not be much, Rafizi said the focus should not be on the difference in income projections but on the ability to reduce dependence on the profit of national oil company Petronas.
“The extent of difference in the amount of government revenue projection will be decided by BN’s discipline to keep its hands off from Petronas coffers in the form of dividends” he said.
In June, Petronas, whose RM30 billion dividend payout last year formed nearly half the government’s revenue, had reached an understanding with the government to fix the dividend payout ratio at 30% of net profits.
Capping Petronas payout
The move, expected to take effect in 2013, came after Petronas said that the dividend payouts are a constraint on the group’s growth plans as significant re-investments are necessary to generate future revenues.
Rafizi said Pakatan is committed to helping Petronas achieve its objective and cap the payout to RM26 billion for 2012 as a measure to inject fiscal discipline.
Pakatan also aims to spend RM6.9 billion to provide senior citizens a bonus of RM1,000 per annum; pay RM1,000 to qualified home-makers yearly; pay RM550 to increase welfare aid per recipient; and giving out RM1,000 childcare allowance for qualified families.
The coalition will also spend an additional RM5.9 billion on public service’s emolument with the payment of RM500 allowance to all teachers and also implementing a mininum wage policy of RM1,100 which would immediately benefit some 300,000 civil servants.
This will be financed by low loans, Rafizi said, adding that other policies to increase income like auctioning off approved permits (APs) will also be implemented.
“Auctioning off APs can give us an extra of at least RM1.5 billion,” he said, adding that an additional RM5 billion to RM6 billion can easily be acquired by stopping “wastage and leakages of public funds”.
‘BN’s budget to cost more’
The loans will also help Pakatan finance its plans to maintain RM22 billion worth of subsidies on basic goods which, it said, is necessary to contain inflation.
“Therefore, BN criticisms that Pakatan has no means of funding the budget merely exposes the BN to ridicule when the government’s own budget is expected to cost a lot more,” Rafizi said.
DAP international secretary Liew Chin Tong denied that Pakatan’s budget is populist in nature.
Liew, the Bukit Bendera MP, said the minimum wage policy and increased salary for civil servants are necessary steps to push Malaysia to become a high-income nation.
“The move is expected to trigger salary adjustments resulting in higher wages across the board throughout the public and private sectors and this will help the economy by strengthening domestic consumption,” he said.