Is Malaysia Really Flushing with Money?

Read these first:-


(It does not matter whether it is from Barisan or from Pakatan – it is unfortunate that we still have budget deficits by the billions. Why it is so? Is it because we are biting more than we can chew? We been spending more than what is in our pockets? The real challenge for a good Government would be to balance the income with the expenses and reduce the deficits to a zero. Image source: Malaysian Insider)

If you have read the news last week or so (in between the on-going police investigations on the death of young William and the recent Thaipusam), you probably would have read this:-

The Government has approved a RM50mil allocation to the Women, Family and Community Development Ministry for the Hati Rakyat (People’s Heart) programme beginning next month. Prime Minister Datuk Seri Najib Tun Razak said the funds were to assist single mothers, those with special needs and senior citizens.

Najib said that the funds could be used to provide training for senior citizens or buying adult diapers or wheel chairs. The programme would be combined with the 1Azam programme that enables the poor to do small business, he said, adding that he hoped the funds would reach the expected target groups.


And this:-

Deputy Prime Minister Tan Sri Muhyiddin Mohd Yassin today ticked off the opposition’s defacto leader Datuk Seri Anwar Ibrahim for alleging that the country was on the verge of bankruptcy.

“We are in fact flushed with funds. Last year for example the Inland Revenue Board managed to collect RM125 billion as income for the country. This has never been done before. “We are thus in a very strong financial position. We also manage our finances very well. None of our civil servants have yet been denied their salary,” he said when addressing over 5,000 people at a meet-the-people session held at the Civic Centre, here, today.

Muhyiddin said no Malaysian had died of starvation but rather obesity is the norm because of too much good food available, so much so that it has turned into a major problem among students in schools nationwide. He said at the national level, poverty rate was only three per cent while in Sarawak it stands at only four to five per cent.

Muhyiddin said the BN government would continue with the agenda of helping the people and ensuring the country becomes prosperous, united and stable with the support of the people, regardless of race or religion. “The general election is the best opportunity for the people to say they want it to continue and to achieve more.

“The choice is in your hands. Please once again give your full mandate to BN under the leadership of Prime Minister Datuk Seri Najib Abdul Razak,” he said.


If you can read in between the lines, that is a BN politician talking to you with your own money in his hands and saying that he will give you this money if you vote them lot into power again. But given the fact that this has been going on for some long donkey years and no one in the authority sees this as an implicit way to buy votes, it is alright– throwing money to buy votes to help the poor people is expected to happen on a more regular basis as we move nearer to the general elections.

But the thing is ask yourself, whether it worth for the Government with not-so-deep pockets to spend millions of ringgit on short term plans rather than on a long term one. Take for examples of the BR1M 1.0 and 2.0 and other “dumbest of the dumb” ideas like throwing money to youth to buy smartphones:-

For the hard-core poor, RM500 is indeed a large sum that will go a long way to reduce their financial burden. It may even feed them and their family for a month. To the large majority of other recipients the sum, as a one off payment, is just an additional bonus and does not significantly help them out financially.

In fact many use it to spend it on items that they really don’t need. The amount that runs into tens or even hundreds of millions is hard earned taxpayer’s money which could be used more beneficially for the people than be given out freely to “enjoy” themselves for a few days.

What the people really need is not a one-off payment during election time but a better planned scheme to help them in the long term to cope with the difficult times ahead. They need to be given the opportunities to acquire the skills and knowledge to improve themselves.

They need more job opportunities and better wages, easier accessibility to quality and cheaper health care, better and more affordable tertiary education and more affordable housing especially in urban areas. They need a better, cheaper, more convenient and safer transportation system. Most of all they need a system that recognises them as legitimate citizens whose constitutional rights are safeguarded regardless of race or creed.

The present practice of giving out money on and off, as carried out now, is an election gimmick that capitalises on the people’s inherent “greed for free money”, which is becoming a prevalent culture today. It should be strongly discouraged as it is a form of corruption, which should not be tolerated by the people.


And there is a big question of whether the Government is indeed flushing with money and can afford to make these one-off payments now and then without bleeding the limited funds available for other more important sector of the economy?

But there is a difference. A big one. Selangor and Penang, both Pakatan-led states that provide financial aid for senior citizens, children and the disabled, have far surpassed their predecessors’ financial performance. Selangor increased its cash reserves to RM1.9 billion in 2011, its highest in 28 years while Penang successfully reduced its state debt by 95% from RM600 million to RM35 million in the same year.

This is not the case for the federal government, which has run a fiscal deficit since 1997. Although it has fallen slightly from its 22-year high of 7% in 2009 to 4.5% in 2012, our fiscal records aren’t very stellar. Our debt to GDP ratio is at 53%, just below the statutory limit of 55%.

Both BR1M packages will cost the government an estimated RM2.6 billion and RM3 billion respectively. Najib stated that because the economy continues to expand, this results in increased tax collection and therefore the reason for which BR1M can be dished out.

In reality, a huge RM13.8 billion supplementary budget was tabled in June 2012, forming almost 5% of the original budget. Out of this, RM7.5 billion was for cash aid and oil and gas subsidies.


And especially when the source of income is limited to taxpayer’s money and of course the golden money from stated owned Petronas:-

The primary problem is one of numbers. In a global policy environment rightly wary of ballooning budget deficits, the fact that the Malaysian government has been in DEFICIT EVERY YEAR since the introduction of the NEP in 1971 (except for a period from 1993 to 1998) is troubling. This is particularly the case since Kuala Lumpur spends much less on social services than do Western governments.

The economic numbers look even more troubling when one considers that around 40 percent of the government’s revenue comes from the state-owned oil and gas giant Petronas.


So until the general election passes over and BN regains a sizeable of the votes that they lost in the last general election, do expect more generous gifts from the politicians. But beware of the Pakatan fellows as well who promises a subsidy laden Government if they are chosen. Be mindful to vote for those who work on a long term plan for the people instead of one-off payments to satisfy the masses for quick gains for the next elections.

Happy Chinese New Year and Happy Holidays to all!