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Statement (1) by Dr Tan Seng Giaw, DAP National Vice-Chairman and MP for Kepong on the estimated Malaysian federal revenue of RM 69.61 billion compared to the budget of RM 91.01 billion in 2001. 28.10.2001.

For nearly two hours, the Malaysian Finance Minister Tun Daim Zainuddin presented the 2001budget in Parliament at 4.00 PM on 27 October 2000. The total expenditure is RM 91.01 billion, operating and development expenditure being RM 62.21 billion and RN 28.84 billion respectively.

There are some reasonable things such as RM 18.647 billion for education whereas it is RM 14.139 billion in 2000. But, the defence allocation is RM 7.332 billion compared to RM 6.041 billion in 2000.

Despite the economic growth of 10.5% in the first half of this year, the Finance Minister forecasts the growth of 7.5% for 2000 and 7.0% for 2001. This means that the growth for the second half of 2000 is estimated at 5.5%. Why? The Prime Minister Dato' Seri Dr Mahathir Mohamad says that it will be difficult to have a higher growth next year.

It will be interesting to know what the actual growth is when the final figure is announced in the beginning of next year. We need foreign direct investment. Despite the prepackaged incentives for foreign companies, the handling of the capital control is a factor.

The Government has talked about attracting Malaysians working overseas to come home. But, It has not been able to get many. Now, among the incentives is the exemption of income tax for their earnings overseas for two years. What will happen to these people who have much higher earnings overseas when they arrive home? Will those who are in Malaysia leave the country? Will the mentality and the bureaucracy of the relevant departments change?

The 2001 budget deficit is RM 21.44 billion. The rationale is to spend more to stimulate the economy. As it is, the banks are reluctant to give out loans and the people are unwilling to spend. So, the Government is using fiscal measures to stimulate the economy instead of monetary ones. Anyway, where does the Government intend to borrow the money to pay for the deficit?

The total resources of the nine provident and pension funds, PPFs, continue to growth. At the end of June 2000, it grew at 13.4% to RM 201.614 billion. The Employees Provident Fund, EPF, was RM 172.507 billion or 85% of the total resources. Social Security Organisation, Socso, was RM 8.232 billion.

Let the Government announce the source of its fund to balance the budget. It is likely to rely on the PPFs. It simply gets the RM21.44 billion. We hope that it will not abuse PPFs especially when it stresses to create a caring society and the incentives to help the poor.

Dr Tan Seng Giaw