Wednesday, November 05, 2008

Najib Needs Better Economic Advisors

Firstly, I would like to congratulate the new Finance Minister, Datuk Seri Najib Abdul Razak for having at least read the alternative budget presented by Pakatan Rakyat, as admitted during his budget wrap-up speech and his subsequent press conference.

However, he certainly needs a better understanding of public economics, or at the very least engage better economic advisors.

The designated future prime minister has during his speech claimed that we have tabled an alternative budget which was “contractionary” (speech item 25) in nature, while the one by the Barisan Nasional (BN) government was “expansionary” in nature.

We would like to point out to the Finance Minister that a “contractionary” budget is one which results in a budget surplus, whereby the government's expenditure is less than its revenue. However, the budget tabled by Pakatan Rakyat was clearly an expansionary budget as it will result in an estimated 3.0% in budget deficit.

The key difference between the BN budget and the PR budget is hence not that the latter is “contrationary” as alleged but the fact that the former is overly expansionary, which will result in a sizeable increase in budget deficit from the initially projected 3.6% to 4.8% or possibly even higher.

The Barisan Nasional government has over the past 5 years nearly doubled its operational expenditure from RM80 billion in 2004 to RM154 bill for 2009. In addition, the proposed government's operational expenditure for 2009 has exceeded even the total expenditure just 2 years ago in 2006, which amounted to RM136 million.

In the light of a sharp reduction in government revenues arising from significantly lower petroluem and corporate tax revenues due to falling oil and commodity prices, the Pakatan Rakyat budget has taken the responsible move to cut wastage and inefficiencies incurred in the operational budget. The RM24 billion savings in operational expenditure of the PR Budget, compared to the BN budget can hence be better and more effectively utilised in other development expendtires which will benefit the rakyat.

Hence, Datuk Seri Najib's insistence that he wasn't lying when he said Pakatan Rakyat's alternative budget a contractionary budget on the basis that "[PR] suggest an operating expenditure of RM130 billion when ours is RM154 billion," is completely baseless.

As the economy faces critical challenges in the coming months and possibly years, it is important for the government to not only spend money to strengthen and boost the economy, we must spend money effectively without wastage and corruption while at the same time be cognizant of our financial abilities, so as to not over-extend our expenditure which will result in a runaway deficit and its corresponding implications.

In the interest of Malaysians at large, we will hence be more than happy to explain our Pakatan Rakyat budget to the Finance Minister or his advisors, should he not have the necessary expertise to understand our budget document.

15 comments:

Anonymous said...

Najib is stoopid.

NEO said...

What Mr. Najis means for "contractionary" is he will trying he best to hijack the public fund into the BN private pocket. Then, those BN leader will experiencing "surplus" in thier pocket.

Start with 5 Billions from EPF and follow by "Lands held by Federal Agencies!

He is now targeting at the 200 over hectare lands near Kg Supang held by Rubber Research Institute of Malaysia.

This lands are strategically important to him as he had successfully developed the lands at Subang Airport for commercial projects.

Anonymous said...

tony,

this man oversees a ministry where arms purchases are filled with commissions running into no less than 500 million. he doesnt understand deficits but very well versedwith commissions. pls send him to finance 101 and economics 101 before he wreck this country financially.

Anonymous said...

The real issue in Malaysia. When meritocracy is disregarded. and when leaders think they know all and refuse to lend their ears then the result is stupidity which will be dangerous that will threaten the survival of the nation. The one that is going to suffer is the rakyat and not the well and filthy rich ministers.
When all the advisers are sycophants, so what do you expect? This is what have happened in our country for the last 50 years and if this is to continue, will there be future in this country?

Anonymous said...

Ever heard of a spell checker, Tony Pua?

Pot calling kettle black!

Unknown said...

i don't think that murder suspect has read your budget.

btw, salute to all you guys that you have to face all these robbers, theives and murderers daily.

Anonymous said...

Being less than accurate is the hallmark of Najib's PR. To actually expect him to raise standards in public is well, dumb. The man can't even stop lying AND you expect him to raise his standard of accuracy?

That is what blogs are here for..

Anonymous said...

Its good to get the government to cut wastages and corruption but how could we make it work? To change the government we need another 4 years and all the alternative ideas from opposition are rejected. Hmmm wonder whether we still have hope.

Unknown said...

Hi Dr Josh,

Apologyies, my England is not sogood. But you got the message of the post, yes?

tank you.

;-) Tony

Anonymous said...

The BN govt & its ministers always interpret words & issues within their (limited) understanding. Time to talk on the same standardised language, meaning and interpretation.

donplayplay

Anonymous said...

Dr. Josh,

It's called a "typographical error" if you are interested ... Furthermore, this is a personal blog, not a PhD thesis. Don't you have anything better to say than to give such childish remarks? You sure about the Dr? Edison Uni?

Good response tony, but I don't think you should waste your time on ignorance.

Anonymous said...

Dear Tony,

While this is a personal blog, this is also an education blog. We learn to spell at an early age.

Another irony, education blog.

Just a suggestion, the last Mozilla Firefox(free) comes with a spell checker for any word typed in the browser.

If you do have Microsoft Office suites, Microsoft Office is perfect for checking spelling and certain grammatical errors.

If you are unable to purchase Microsoft Office Suites, or download a free version of Mozilla Firefox, you can always download Open Office, a copycat of the Microsoft Office Suites I mentioned earlier.

Perhaps you are not a fan of downloading or purchasing software for certain reason, I would then recommend you to register for a Google Account, and utilize Google Docs, a web copycat of the Microsoft Office Suites.

I have tried to be as constructive as possible, and I hope you would find my advice at least partially beneficial.

Your act of ignoring spelling mistakes might further affect Malaysian's perception on your university i.e Oxford. I do think that Oxford University has has enough bad press within the Malaysian blogosphere.

Regards,
Dr.Josh

Anonymous said...

Dr. Josh,

It's Oxford University has had enough or was it has has enough?

Anonymous said...

Dear anon,

I'm only utilizing Mozilla Firefox as a spell check.

There you go! One of the disadvantages of the latest version of Mozilla, they do not observe repeated words.

Tony Pua,
Your spelling mistakes does not send the right signals to students. You do run an education blog.



Regards,
Prof. Josh.

Anonymous said...

Tony Pua,

Your reply to dr.Josh shows that you're a third class parliamentarian. No surprise, you are part of the big zoo.