Budget 2017 presented by Prime Minister-cum-Finance Minister Najib Razak feels like an ostrich’s response to the multiple crises facing the nation. Instead of taking the bull by its horns, Najib decided to bury his head in the sand in the hope that the storm would be over by some stroke of good luck.
That is not serious policy-making.
The budget presentation reveals an isolated Najib’s deep desire to win kudos from audience in front of national television. This is the second year that a teleprompter is placed in front of him. I understand the need of a teleprompter on big occasions in which the speaker addresses thousands.
But within the setting of a Westminister Parliament, the finance minister is supposed to speak to the MPs sitting around the chamber first and foremost, then only to those watching from television. There was no attempt or effort made by Najib to talk to those inside the chamber.
Probably imitating the state of the union address of US presidents, Najib invited many individuals to be present in the chamber to be called upon when policies relevant to them were mentioned. The showmanship somehow was overdone and thus diluted any of sense of novelty intended.
Anyway, a budget speech is what the finance minister wants you to hear, it is not exactly what is written in the voluminous budget documents. The devil is in the details.
A careful reading of the government’s revenue estimates would conclude that Najib is too optimistic about the prospect of the Malaysian economy in 2017. The government is hoping to extract RM40 billion of Goods and Services Tax (GST) in 2017 while the target for 2016 was RM38.5 billion (originally RM39 billion but has since been revised down). The collection of GST hinges on strong domestic consumption that may not happen in 2017.
The government also expects an increase of collection of company tax by 9.5 percent and a whopping increase of petroleum tax by 24.9 percent. Given the current global slowdown and volatile oil market, both are sanguine and unrealistic.
Najib did not provide any direction into the future nor strategic responses to the global slowdown. There was no attempt to deal with structural constraints and problems of the Malaysian economy. The following three pronouncements in the speech border on jokes that shouldn’t have come from a serious finance minister.
First, Najib started the speech by talking about austerity and how one should spend cautiously. He then called Malaysia a “food heaven” and encouraged graduates to follow the footstep of “Nasi Lemak Anak Dara” owner to be “entrepreneurs” (para 17-23).
It is not a problem for your neighbour to offer “survival strategies” like selling nasi lemak while unemployed, but it is shocking that your nation’s finance minister is telling graduates to be hawkers.
Hawkers and other informal sector jobs are “urban subsistence farming” for those who have no access to the formal sector or when the formal sector doesn’t pay adequately. People often choose to be hawkers as a last resort, not as a career of first choice.
The job of the finance minister is to devise economic strategies to ensure that the formal sector creates sufficient decent jobs.
Further, in a slowdown or outright recession, if everyone doesn’t have enough to spend to eat out while many rush to sell nasi lemak due to the lack of formal sector jobs, a job crisis will soon erupt.
Second, Najib told the B40 group (the bottom 40 percent income group) to take on an additional job as Uber drivers. He said, if one drives between 10 to 40 hours per week, he gets at least RM1,500 per month. If he drives more than 40 hours per week, his monthly income may go up to RM 4,300 (para 176-178).
There was no attempt to ask the hard question of why so many Malaysians are earning so little, except to offer advice for them to become Uber drivers. What if in a downturn everyone becomes an Uber driver? What if the supply of Uber drivers exceeds those who needed the service?
Third, Najib was very proud to announce that 7 million Malaysians benefited from Bantuan Rakyat 1Malaysia (BR1M) (para 124). The flip side is, 7 million Malaysians are considered poor thus needing aid. There was no policy to remedy the situation apart from saying that there are poor people in every other country.
Najib started reading his text at 4pm on Friday. Opposition members walked out on him at 5.50pm when in para 255, he accused the opposition of sandiwara (play-acting), of falsely claiming that the economy is in stormy conditions, and he asked who are the traitors.
Prior to that, Najib had taken potshots at opposition members in many earlier parts of the speech. Insulting the opposition to the television audience was his only game yesterday.
We decided “enough is enough”. The opposition was walking out on a prime minister who turned Malaysia into a global kleptocracy and also a finance minister whose budget speech had nothing inspirational to offer except cheap shots against the opposition.