GST The Cause Of The Economic Downturn And The RM42 Billion 1MDB As Well As The RM2.6 Billion Donation Scandal The Cause Of The Depreciation In The Ringgit.(e/c)

Budget 2016 Speech By DAP Secretary-General And MP For Bagan Lim Guan Eng In Parliament On 26.10.2015

GST the cause of the economic downturn and the RM42 Billion 1MDB as well as the RM2.6 billion donation scandal the cause of the depreciation in the Ringgit. By not abolishing GST, reduce petrol price, freeze toll hike and outline concrete measures to restore the value of the ringgit, the 2016 Budget will not overcome Malaysia’s economic crisis nor improve the living standards of the rakyat. The Federal government has admitted that the GST saved the government from bankruptcy and even of not having enough money to pay civil servants, caused by reduced revenue following low global commodity and petroleum prices.

GST helped the Federal government to collect an expected sum of RM39 billion next year, which would be a net extra amount of RM21 billion collected, after taking into account revenue lost following the abolition of sales and services tax to make way of GST. It is this extra RM21 billion collected from 30 million Malaysians, not from rich crony companies in petroleum or toll companies, that has saved the government.

The 2016 Budget is just a cosmetic packaging exercise to give back some benefits after having taken an extra RM21 billion from ordinary Malaysians. In actual fact the RM39 billion is taken directly from the rakyat as compared to the abolished RM18 billion from the sales and services tax, which was taken from businesses. In other words, 30 million Malaysians are directly impacted in paying RM39 billion because of GST as compared to the previous scenario before GST where only businesses pay RM18 billion.

GST has caused ordinary Malaysians to suffer, not enough money for daily necessities and expenditure and even price rises. The 2016 Budget claims to give back to ordinary Malaysians. However the net effect of giving back to ordinary Malaysians can be seen by the Federal government revenue estimates that cost only RM764 million. What type of goodies budget is this that take RM39 billion directly from the rakyat or RM21 billion net from the rakyat but gives back only RM764 million? Based on the net figure of RM21 billion extra GST revenue, this is just like BN taking back RM26 from the rakyat but giving back only RM 1!

How does the Federal government intend to lessen the burden of the rakyat when toll hikes are announced and petrol prices is increased despite the drop in international oil prices? Will the Budget 2016 help to restore the value of the ringgit? Will BN admit that the Budget 2016 is a failure if the ringgit value does not bounce back to RM3.70-3.80 to 1US$ from the present RM4.30?

RM804 Billion Federal Government Debt Or Each Malaysian Owing RM26,800.
How does the 2016 Budget address the increased federal government debt that has risen from RM266 billion at end 2007 to RM627.5 billion as at June 2015? If we include contingent liabilities of RM176 billion, the federal government debt obligation would be RM804 billion, which would mean that Federal government debt has risen by more than 3 times in 9 years!

This debt means that each Malaysian owes RM 26,800. Debt service charges have also risen to RM26.64 billion, RM856 per person.

Whatever goodies are given to the rakyat under the 2016 Budget, are these goodies sufficient to overcome the higher cost of living following the implementation of GST. Many have said that life was better without the GST. I am sure the rakyat will prefer not having these 2016 Budget goodies if they can also not have the GST.

That is the difference between BN and Pakatan Harapan’s Budget proposal to save the economy by abolishing GST, freezing toll hikes and abolishing toll when the construction cost has been fully paid like the North South Highway, reducing petrol prices and resolving the RM 42 billion 1MDB and RM 2.6 billion donation scandals to restore the value of the ringgit.

Malaysians are nostalgic for a pre-GST and strong ringgit economy.

I wish to express my regret on behalf of the Penang state government that there are no projects announced for Penang. Why is there no expansion of the Penang International Airport when it will be expected to reach capacity this year? Why is there no implementation of the public transport system for LRT as promised three times by the Prime Minister?

The Prime Minister had also promised during Hari Raya Haji this year to assist flood victims in Penang and I had written in requesting RM 805 million in assistance for flood mitigation but none was given. I would like to remind that Penang contributed RM 6.5 billion annually and it is only fair that Penang not be left out and marginalized.

Budget 2016 does not address the issue of how Malaysia is going to escape the middle-income trap and achieve fully developed status with GDP per capita of US$15,000 when we have only reached US$10,830 last year. From this year to 2020, Malaysia’s per capita GDP needs to increase by US$695 per year on average, which is unlikely at the present exchange rate of RM4.30 to 1US$.

The time has come for Malaysia to seek inclusive growth that is not only sustainable but also free from corruption that encompasses all segments of society. There should be a progressive economic policy with a wealth-creating agenda based on collaboration amongst “wealth-creators” involving not just business but also workers, public institutions, and civil-society organizations. A progressive economic policy that is investment-led, inclusive, and sustainable to create wealth through a public-private partnership that drives long-term growth and productivity.

In other words, an entrepreneurial state where the government serves as a catalytic role in providing public goods and services, basic communications infrastructure and spurring the development of key risky industries. There is a need to invest in risky areas especially in research and development, innovation as well as retraining and upskilling, which the private sector would not touch. But in other areas, especially where the private sector has a proven track record, the role of the government is to reinvent government and leave business to the private sector.

The best way to solve the problems of “bad capitalism” (monopolies and cronyism) is to unleash the virtues of “good capitalism” (competition and innovation). Just as it is employability that matters, not employment. However we can see that the Federal government is too focused on monopolies and cronyism that has resulted in a deficit budget for so many years. Looking at our unemployment rate of 3.2% and expected drop of to 2,9% next year, again quantity is just as important as quality.

Finally, why has RM800 million promised for vernacular schools in 2015 Budget still not released this year? Can the government explain why this is happening especially when the allocation for vernacular schools has been reduced to RM500 million this year. How can the reduction of funds be compatible with the Prime Minister Datuk Seri Najib Tun Razak’s assurances that vernacular schools will be retained following several Ministers’s call for single-stream education system and the closure of Chinese schools?

Merdeka and Malaysia was established by leaders who believed they were doing something exceptional for the country with rights and freedoms as set out in our Federal Constitution. Unfortunately whilst we should be expanding our future, our present leaders want us to live in the past. BN is characterized by resentments and grievances, by distress and dismay, by the belief that America is irredeemably corrupt and past the point of no return. Let Malaysia not be defined by our past but by the opportunities of the future.


—–Mandarin Version —-



















解决“劣质资本主义(垄断及朋党)” 的最好办法是发扬“优良资本主义(竞争及革新)”的长处。正如就业能力才重要,而不是雇用率。但是,我们可以看到,联邦政府太过注重垄断及朋党,导致财政预算赤字那么多年。看看我们的失业率3.2%,估计明年会降到2.9%,质量与数量一样重要。