So the overall ceiling for development has been up another RM30 billion from the original RM200 billion. So is that why RM30 billion has been taken away from the fuel subsidy to compensate for inflation in the costing of mega projects. Who and how was the inflation created in the first place? So much has been inflated in the budgeting cost to fill the BN's coffer for the next general election via cronies.
RM30b more for 9MP
Sun2surf
KUALA LUMPUR (June 26, 2008): Prime Minister Datuk Seri Abdullah Ahmad Badawi tabled the 9th Malaysia Plan (9MP) mid-term review (MTR) motion in Parliament today, announcing an extra RM30 billion for development but was hazy on the fate of mega projects, especially those in Penang.
He said the overall ceiling for development allocation is now RM230 billion, up from the original RM200 billion.
"The increase is required to cater for the rising costs of implementing existing projects as a result of the rising prices of building materials as well as to account for new priorities such as the regional corridor developments and adequate food production for the nation," Abdullah said.
His 24-page speech, however, did not list the mega projects that would be halted or postponed.
Instead, the premier dwelt on the enhancement of current projects and new projects which looked into the welfare of the lower-income category and the minority in the light of rising prices worldwide.
Among the projects mentioned were the improvement of the 1990 Social Safety Net scheme, poverty eradication programmes for minority groups and the non-productive poor, income generation programmes for the urban poor and better housing and social amenities.
"I would like to emphasise that the federal government will continue to implement the 9MP development project in all states," he said, addressing a concern that the states ruled by the Pakatan Rakyat (PR) would lose out in the review.
Abdullah said priority will be given to people-centric projects which provide basic amenities and impart direct benefit to the people like water supply, electricity, health facilities, education, low-cost public housing, poverty eradication and public safety.
He said the greatest challenge confronting the economy is the rising global oil prices. On top of that, the economy is also affected by the state of global financial markets which have yet to recover from the sub-prime crisis.
"In fact, many economic experts expect that this crisis may lead to a global recession which would surely adversely impact our own economic prospects."
In explaining the government’s role to make decisions and initiate changes that will preserve public prosperity and national interests in the long term in the face of these challenges, Abdullah cited the recent decision to restructure oil and gas subsidies as one of its courageous decisions.
"Nevertheless, the government was compelled to act decisively since the rise in global oil prices has put a strain on the nation’s finances.
"At the same time, the move was necessary to ensure that subsidies would go directly to those who need them most and by restructuring subsidies, we will have greater flexibility to navigate risks of a global recession, should one occur in the near future," Abdullah added.
Further, he said, rising oil prices and uncertainty caused by external factors make it difficult for any nation to fully shield its citizens from hardship.
"Nevertheless, the government remains committed towards doing everything within its power to lighten the burden of the people and preserve their quality of life.
'STILL MANAGEABLE'
In an immediate response to the motion, Minister in the Prime Minister’s Department Datuk Amirsham A. Aziz says the country's fiscal deficit is still mangeable with the decision to raise the development allocation by RM30 billion in MTR of the 9MP.
"We will have to work within the allocation. Hopefully, the price increase in terms of building cost does not get out of hand.It it does, we will have to relook the prices.
"As far as the 9MP is concerned, we have increased the allocation to RM230 billion, so we should be on track," he said in Parliament lobby.
Tabling the MTR, Prime Minister Datuk Seri Abdullah Ahmad Badawi said Malaysia’s fiscal deficit is expected to be at 3.2% of the country’s Gross Domestic Product (GDP) in 2010.
Amirsham said some of the projects had to be reviewed and may be placed under the 10th Malaysia Plan because of certain constraints in terms of managing the government's fiscal deficit.
"The Prime Minister will make further announcements when tabling Budget 2009 in August. We want to ensure we manage (the) fiscal (policy) very well," he added.
On claims that the federal government is discriminating one state government and another in terms of the projects to be deferred, he said: "There is no such thing. No discrimination as far as we are concerned.
"We go on the basis of the principle that if a project is people-centric and will drive the economy, we go ahead. If not, it doesn’t matter where they are, we won’t (go ahead)," he said.
Asked whether the states where projects have been affected by the MTR have been informed, Amirsham said: "The respective ministries will have to deal with it."
'GOOD AND CONSISTENT'
The MTR is "good and consistent", Transparency International Malaysia president Tan Sri Ramon Navaratnam said.
Navaratnam praised the MTR as "consistent with the five thrusts of the 9MP". They are:
> to move the economy up the value chain;
> to raise the capacity for knowledge and innovation and nurture "first-class mentality";
> to address persistent socio-economic inequalities constructively and productively;
> to improve the standard and sustainability of quality of life; and
> to strengthen the institutional and implementation capacity.
He said the RM30 billion (increase in development allocation) would help counter the current state of economic stagnation and inflation, a condition which has been dubbed as "stagflation".
"The substantive point is the increase of RM30 billion for the mid-term is an indication of government pump priming. This will help counter the stagflation now being experienced in the country.
"Economic growth has slowed down with rising inflation. This is what they call stagflation," said Navaratnam who pointed out that the allocation would "stimulate economic growth and increase the supply of goods and services which should help bring down prices".
However, he noted that a large portion of the expenditure was being diverted to large infrastructure projects.
"There is not enough evidence that this is a people's budget because the bulk of the expenditure is going towards infrastructure projects, including RM10 billion being allocated to the various economic corridors," he told theSun in a phone interview.
Navaratnam cautioned that such expenditures be conducted in a transparent and accountable manner. "Otherwise there would be considerable wastage of public funds and the economy will not be sufficiently stimulated to bring inflation under control."
NOTHING NEW'
"Nothing new" was the Opposition MPs' standard response to the MTR tabled by Prime Minister cum Finance Minister Datuk Seri Abdullah Ahmad Badawi.
Parliamentary Opposition Leader Datin Seri Dr Wan Azizah Wan Ismail said the MTR was contradictory because Abdullah said the country needed more allocation for development because of rising crude oil prices.
"He (Abdullah) said he would do that by increasing the fuel price (in the country) and yet he said he will not increase the burden of the low-income group," she told reporters in Parliament lobby today.
"The increase in fuel prices showed the government's lack of planning (for the long-term). Increase should be in stages," she added.
"The government's administration did not seem to have given a thorough thought before raising fuel prices. It immediately introduced the cash rebate and after that cutting down the allowances of Cabinet ministers going for (their annual) holidays," she added.
DAP's Bukit Bendera MP Liew Chin Tong said the MTR was not surprising because it dealt mainly on racial distribution and neglected the growth of the country's future economy.
He also complained the MTR did not touch on improving infrastructure.
Liew, however, welcomed the government's aim to set up a national public transport commission although it has been "announced" many times.
Datuk Mukhriz Mahathir (BN-Jerlun) said there were a lot of planning but there were problems in "implementation".
"The increase in fuel prices will definitely affect the projects and the money allocated initially will definitely be not enough. I am not confident that our objectives (in the 9MP) can be fulfilled as expected," he said.
Mukhriz suggested that the government revived the National Economic Action Council "because the increase in fuel prices is a complicated matter with long-term effects that trigger price increase of goods".
In GEORGE TOWN, Gerakan acting president Tan Sri Dr Koh Tsu Koon said the government's real test was in the actual delivery and implementation of the promises, programmes and projects under the 9th Malaysia Plan mid-term review (MTR).
He said the delivery mechanism must be further upgraded to be more effective than what it has been to date.
"Implementation must not only be effective, but fair and just to all so as to benefit all communities and social strata," he said.
"It is also crucial to have the political will to put in real efforts to plug wastage and leakage through greater transparency and efficiency."
"No doubt the macro socio-economic indicators of economic growth, foreign reserve, employment and so on are still healthy. But, the real concern is at the micro level, in terms of adverse impact of rising costs on businesses, livelihood and quality of life of the man on the street."
He stressed that while poverty rates declined by 2007, recent increases in the costs of fuel, food and goods, would definitely worsen "absolute and relative poverty".
"Even the middle income groups are feeling the pinch," he said, adding that areas like housing, public transportation, healthcare and welfare needed more emphasis and allocation.
Comments :
Post a Comment