Saturday, June 12, 2010

Of Deficits & Bureaucracies

Cut deficit by reducing bureaucracy, says DAP

OPPOSITION MPs questioned whether the Government could reduce fiscal deficit to 3% of the Gross Domestic Product by 2015, saying it would be a “very challenging target.”

DAP national publicity secretary Tony Pua said this was only achievable if the Government changed the way it worked and the world economy was strong for the next five years.

The DAP PJ Utara MP said the easiest way to reduce deficit was to tax the people and cut subsidies.

“But what really needs to be done is for the Government to transform the way its machinery works. At present, it is a huge bureaucracy,” he told reporters at the Parliament lobby after the tabling of the 10th Malaysian Plan.

Pua said the Government’s operating expenditure, which takes up more than 70% of the Budget, was too high.

“And this is despite the huge increases in revenue over the past two years. In the next few years, there will be a decline in revenue from the oil and gas sector but operating expenses will maintain, causing stress to the deficit,” he said.

He also said the 10MP was a “rehashed”version of the previous Malaysia Plan, pointing out that the public-private partnership, high speed broadband and transportation plans had been part of the Ninth Malaysian Plan.

For the full article in The Star, click here.


Anonymous said...

Stop the buying of expensive military toys and reduce the number of civil servants and the Armed Forces especially the top bras with too many stars on the shoulder earning big pay but doing nothing.

Rakyat Yang Susah said...

Why high operating expenditure? Bcos the same process which take 1-2 steps have to go through double or triple times.Why do we have so many civil servant? Is bcos to cater for the above! One more thing,Mr.Tony,I wish to point to you that does the govt machinery need to buy luxurious cars for their department for moving around? This is bcos one day,on the road,I saw two Toyota Fortuner(a MPV with 2,700cc capacity)belonging to one ministry(can't see properly which ministry but I got one of the number plate-WRL103).Can't they spend less by buying much cheaper one like the Naza Ria(also a MPV with 2,500cc capa)?

Anonymous said...

Did you hear this?
"Changes are being proposed to the Road Transportation Act (the Pengangkutan thingy) whereby all owners of registered motor vehicles will be required to buy new car license number plates with a microchip."

This plate is suppose to cost us RM150 each. Another way to fleece the people? Please verify and you can tell that PM we are opposed to it.

Donplaypuks® said...

The Civil Service cost us $42 billion a year. if we add Petronas, Tenaga, Telekom, Sime Darby, other Glc's, Quangos and State Govt extravagance, the HR cost will probably be some $100 billion at least.

Cut 5% of that to start with and that's $5 billion per year, and $50 billion over the next 10 years - enough to get rid of most subsidies and no necessity to introduce GST until we are a truly developed nation!!

Get cracking!

we are all of 1 race, the Human Race

Jonas Lee said...

The 10th Malaysia Plan assumes a nominal GDP growth of 11%(extrapolated from their own assumptions) and a real GDP growth of 6% p.a., suggesting that the implied GDP deflator = 5%, which is higher than the 2001-2009 average deflator of about 4%. Statistically, this means that CPI INFLATION FOR THE NEXT 5 YEARS IS PORJETED AT 3% versus 2.3% in the last 9 years.

My question is whether an average 3% inflation is realistic with all the cuts in subsidies. The gov seems to think so with inflation (according to Idris Jala quoting Bank Negara study) bumped up briefly to 4% for 2011/2012 before going down to 3%.

My next question is at 3% inflation, why should operating expenditure be rising at 7% (2011-2015)when it is not productive spending for the economy? If subsidies are reduced, clearly operating expenditure should fall instead of rise and at a rate not exceeding inflation?

So to achieve a commendable 2.8% budget deficit target, the government should raise development expenditure and lower operating expenditure. This will have multiplier effects on the economy.