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How do we find the revenues for the 1999 Malaysian Budget? Statement by Dr Tan Seng Giaw, DAP National Vice-Chairman and MP for Kepong on revenues and the 1999 Malaysian Budget. 24 October 1998 | |||||||
| Yesterday, the Prime Minister and First Finance Minister Dato' Seri Dr Mahathir Mohamad presented the 1999 Malaysian Budget. The total expenditure of RM 65 billion consists of RM 47 billion operating expenditure and RM 18 billion development expenditure. This budget contains measures that are consistent with the introduction of foreign exchange control since 1st October, 1998. The major allocations are in Education (RM13.5 billion), Defence (5.9 billion), Finance (4.8 billion), Works (RM 4.67 billion) and Health (RM 4.5 billion). In an economic crisis, the massive allocation in education is a step in the right direction. Whatever happens, we have to educate our next generation. When people and companies do not have money, there are no extra taxes. Tax exemptions such as refrigerators, air-conditioners and television as well as increase in taxes on cigarettes, alcohol and gaming and levy on palm oil profits are expected. There is no such thing as exemption from personal income tax. It is only changes in the method of assessment like self-assessment. By the year 2000, individuals will be paying for that year; the corporate sector will be also paying tax for the same year. For companies, self-assessment only starts on 2001. Malaysians will continue to pay income tax. According to the budget, the only people who will benefit are those people who pay as they earn, PAYE, since 1995. If the economy recovers in the year 2000, the people will actually pay more taxes. We have proposed a fixed currency in July 1997. At that time, the Finance Ministry was confused. Since 1 October 1998, the ministry has implemented foreign currency control measures. Naturally, these are against the advice of the International Monetary | |
Fund, IMF, whose part in supervising fixed currency exchange has failed miserably. Every Malaysian should try his or her best to make these measures a success so that the economy can recover as quickly as possible. While these measures are being enforced, there should be a time-table for the correction of weaknesses in the country such as irregularities, wastage and bureaucracy. Where do we get the money to overcome the deficit? Where are the revenues? On 23 October 1998, Members of Parliaments did not receive a copy of the memorandum on revenues after the budget speech. Annually, they receive a copy of this memorandum. Perhaps, the Finance Ministry finds it difficult to finalize the estimates for revenues. It may distribute the memorandum later. How do we find money for all the allocations? Do we borrow from domestic or foreign sources. The interest rate from foreign market may be 11% or higher. Do we turn to domestic sources such as the Employees' Provident Fund, EPF, Petronas or insurance companies. We hope that the Government clarifies the methods and the sources with which they intend to overcome the shortage in revenues. As usual, the mass media carry mostly good news on the budget. Thus, the Government may be pleased. It is hoped that this media optimism may help boost the spirit of the people to unite and to work harder, helping the economy to recover. On the other hand, there are weaknesses in the budget such as the expenditure of over RM 8 billion on national security that includes the police and the armed forces. This does not mean that the salaries for police and armed forces should not be reviewed; they must be paid according to the current cost of living.
Dr Tan Seng Giaw | |||||
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