KUALA LUMPUR – Tun Dr Mahathir Mohamad today cast doubt on the government’s ability to raise enough funds to sustain next year’s Budget, which is the country’s biggest at RM322.5 billion.
“It is a behemoth of a Budget, but can we raise the money to finance it? Government debt will be at RM1.3 trillion. How do we pay for it?” said the former prime minister in a blog post today.
He said the business community has complained that merely securing approvals would take more than a year.
“That means there will be practically no inflow of investment funds in 2021. Certainly, there will be no profits made or taxes paid to the government. Even local investors face these delays.”
He said policies on their own do not grow economies, but their implementation does.
“I know of cases where multibillion-ringgit projects have been delayed for years. If the investor pushes, he is likely to face even longer delays.”
The Covid-19 pandemic has badly affected the economy, he said, adding that although the glove industry has done well, Petronas and tourism, the two biggest contributors to national revenue, have fared poorly.
“All other industries have suffered badly. I don’t think income and corporate tax would amount to even two-thirds of the normal figures during these times.”
Dr Mahathir said to not expect industries to be in full swing on January 1.
“The rosy picture of immediate recovery once the Covid-19 pandemic is overcome is not going to happen. The pandemic will not end on new year’s day.
“The expectation of economic recovery is too optimistic. I can think of lots of other things that can be done to lower costs and increase income.”
He said he hopes Budget 2021 will be modified to become more realistic.
“We need not be bribed for our support. We do not want to precipitate a crisis.
“But can (the economy) recover fully so as to achieve a gross domestic product growth of 7.5%? Just think. From a shrinkage of 4% to a growth of 7.5%, the recovery will be 11.5% – fantastic.”
He said the government may need to borrow money to implement the Budget.
“That is a lot of money. If you fail to service loans, you may be bankrupted.”
He said Putrajaya can still prune operation and development costs by cutting the salaries of ministers and MPs.
For the last 15 years, he said, these politicians’ pay has increased at a very high rate – as much as 25% each time.
“Ministers and MPs have been given numerous allowances. Such is the increase, that everyone is keen to be MPs and ministers.
“Nothing can make them part with their position. Even when their leaders commit crimes, they will support them. Giving up their posts would deprive them of so much money. Principles don’t count anymore,” he said, adding that it is better to make these posts less lucrative.
Citing Parti Warisan Sabah president Datuk Seri Mohd Shafie Apdal, who suggested that ministers have their salaries cut by 30%, Dr Mahathir said people earning high pay, whether in the government or private sector, should forgo 10% of their wages.
“It is a sacrifice, but I don’t think it would hurt them if there is a reasonable cut-off point, say, RM20,000 per month.”
The money should be used to provide food to the unemployed and those without an income, he said.
Although government revenue must shrink during the pandemic, he said, Putrajaya needs to offer stimulus packages, and these cost a lot. – The Vibes, November 9, 2020
