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Pakatan Rakyat unveils economic plan

KUALA LUMPUR, 23 Oct 2008: The Pakatan Rakyat has proposed auctioning Approved Permits (APs), scrapping several mega-projects, and reducing government operation expenditure as ways to increase national revenue.

The opposition coalition suggested these measures under a package of recommendations for the government’s 2009 Budget, which is currently being debated in Parliament.

Announcing the recommendations today, Pakatan Rakyat advisor Datuk Seri Anwar Ibrahim said the federal government budget was “unrealistic in its assumptions of total revenues.”

The Pakatan Rakyat’s projection of 2009 government revenue is RM157 billion, compared with the federal government’s RM176 billion.

Anwar said the loss in government revenue would be caused by the drop in commodity prices and an expected decline in Gross Domestic Product (GDP).

He noted that crude oil prices have dropped from above US$100 to US$80 per barrel, and crude palm oil prices from around RM3,000 to RM1,700 per tonne.

“The level of deficit spending will likely be higher,” Anwar said at a press conference in Parliament to unveil the opposition measures.

A budget deficit of 3% was also more realistic than the government’s projection of 3.6%, he added.

He said the opposition was more convinced of the 3.4% growth rate for 2009 predicted by the Malaysian Institute for Economic Research (MIER) than the government’s 5.4% growth forecast.

Increasing revenue

Anwar suggested that the 70,000 APs issued annually for imported vehicles could be auctioned off monthly to the highest bidder to add RM1.75 billion to government coffers. This is based on the estimated market price of RM25,000 per AP, he said.

All mega-projects costing RM1 billion or more should be reviewed transparently as to their viability and national impact. As such, projects like the RM9-billion undersea cable and the proposed RM15.2-billion high-speed broadband project should be shelved, he said.

Government operational expenditure should also be reduced to RM130 billion, and not RM154 billion as proposed in the budget, Anwar added.

“Exploitative contracts by licensed monopolies”, which include toll concessionaires and independent power producers, have to be renegotiated, and the savings used to subsidise public transportation and the development of alternative energy sources.

The opposition also proposes a carbon tax of RM25 for every tonne of carbon dioxide produced, as well as a 5% minerals and forestry extraction service tax.

The Pakatan Rakyat also said the government should guarantee bank deposits in all banks in the face of a global financial crisis, and increase people’s disposable incomes by reducing employee contributions to the Employees’ Provident Fund from 11% to 9% for one year.

“This will inject nearly RM2 billion of disposable income into the economy through domestic spending,” Anwar said.

DAP parliamentary leader Lim Kit Siang said the recommendations were not an “alternative budget”, but a plan to “meet the crisis of confidence on the economic front.”

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