KUCHING, Oct 12: Sarawak United People’s Party (SUPP) Dudong chief Wong Ching Yong opines that the Budget 2020 would make for a gloomy outlook for the Malaysian economy next year.
Based on some calculations and statistics, he pointed out that the revenue expected to be collected for the year 2020 would be RM244.53 billion and comparing with 2019 revised estimate of RM263.3 billion, this would represent a 7.13 per cent decrease.
Reduction in revenue, he said, meant that taxable income from taxpayers including companies, individuals, petroleum income tax and other non-tax revenues and indirect tax would also be reduced.
“This is a very worrying sign because it would be the first time in many years to see the income reduced by such a significant percentage. The Pakatan Harapan (PH) government attributes to this decrease due to a reduced collection in indirect tax namely the Sales and Service Tax (SST),” he explained in a media release today.
“Many tax experts have advised the government to go back to the Goods and Services Tax (GST) but this was rejected by Finance Minister Lim Guan Eng in his budget speech yesterday (Oct 11),” he said.
Another worrying sign, he noted, was that the Operating Expenditure for 2020 was RM241 billion compared with RM262.26 billion for 2019, which represented an 8.1 per cent reduction.
Wong emphasised that while the government tried to reduce the operating expenditure, the emoluments payable to the civil servants increased from RM82.045 billion in 2019 to RM82.60 billion.
“The emoluments for civil servants in 2019 represented 31.6 per cent of the share of the total operating expenditure whilst in 2020, it represents 34.27 per cent of the total operating expenditure.
“The number of pensioners in 2020 is 874,000 whilst the number of pensioners in 2019 was 853,000. This represents an increment of 21,000 pensioners. In other words, a big bulk of operating expenditure has gone to pay for the salary and wages and pensions of the civil servants in Malaysia,” he stressed.
On the size of the Malaysian civil service, Wong informed that there were a total of 1.6 million civil servants, and in ratio, one government servant is to service 19.37 Malaysians.
For comparison, he shared that the proportion of civil servants to the national population in other countries was 1 to 71.4 people in Singapore, 1:110 in Indonesia, 1:50 in Korea, 1:108 in China, 1:28 in Japan, 1:84 in Russia and 1:118 in Britain.
In 2009, he stressed that Malaysia’s civil servants-to-population ratio was the highest in Asia Pacific – at 4.68 per cent compared with Singapore’s 1.4 per cent, Indonesia’s 1.79 per cent, South Korea’s 1.85 per cent and Thailand’s 2.06 per cent – all of which were less than half of Malaysia’s ratio.
“This bloated civil service has caused and would continue to cause the government operating expenditure to increase yearly,” he said.
“In 2020, civil servants seem to be the biggest winner of Budget 2020 as their cost of living allowance (Cola) is to be raised by RM50 a month for support group, which is an additional RM350 million a year,” he added.
Other benefits, he said include allowing redemption of accumulated leave for up to 75 days as replacement pay and RM500 special payment for civil servants Grade 56 and below.
Wong added that economists have emphasised the need for political courage and integrity to streamline this big army of civil servants in Malaysia.
“Whilst the government is trying an austerity policy to control the expenditure, it is ironic that every year the civil servants still enjoy increment in salary and wages,” he criticised.
Besides that, he added that the trade war between China and the United States (USA) does not seem to create any windows of opportunities for Malaysia because based on local and international news reports, most of the factories which were forced to quit China have moved to countries like Vietnam, Thailand and even the Philippines.
“Malaysia seems to be the loser in this trade war. Economists attribute this to unclear investment policies and bureaucracy of the government departments,” he said.
On other issues, Wong noted that the PH federal government has allocated funds for digital technology and economy by introducing incentives for Internet and IT technology.
However, he argued many economists opined that Malaysia was too far behind as far as the IT and digital technology were concerned because its foundation has been too weak with very small pool of IT graduates like in China.
Instead, Wong suggested that the federal government should pay more serious attention to the agriculture sector.
“The allocation for the Ministry of Agriculture and Agro-based Industry will be increased to RM4.9 billion, including RM150 million to support plant integration programmes such as for chili, pineapple, coconut, watermelon and bamboo; and RM855 million allocation under Federal Government Padi Fertilizer Scheme to boost padi yield,” he listed.
“The question is – can Sarawakians also enjoy these incentives too?,” he questioned.— DayakDaily