2012 Budget: No Fundamentals

PM Najib spent over an hour announcing his 2012 Budget in Parliament last Friday. He touted it as a better budget than the one announced by Anwar on Tuesday.

The strangest thing was the lack of MSM fanfare touting fantastic statements in support of Najib’s budget. Certainly, if you were asked for comments and it was going to be published, you won’t be caught saying the wrong things however much you feel otherwise. That is politics. The positive spins were positively pathetic.

But what was unsaid was heard even louder.

Most struggle to put a positive spin about the Malaysia 2012 Budget.

That it was truly a welfare centric budget, one would ask why Christmas came early this year and Santa started dishing out goodies to everybody.

That it was a responsible budget, it certainly didn’t show with another deficit budget that requires even more government borrowings getting further into debt.

So what is good about Najib’s 2012 budget? Ho hum! Just lots of handouts. And will that really help much? Not really and most agree the economic impact will be negligible.

Najib only looked into making lots of Malaysians “feel good” with his goodies. He failed to table a budget with the country in a struggling world economy in mind.

Can Petronas remain the government’s cash cow? Unless the government knows better, public records tell us otherwise. 2012 will see a much lower contribution by Petronas against the government’s very bullish view of the national oil company.

The assumption of GDP growth again is overly bullish. It appears the government’s intention is to try to paint a better perception rather than working with the people on the truth. And the truth is our GDP growth will be severely impacted by our trading partners of US and EU who are struggling to figure out their own problems. And believe me, their problems will soon become ours.

When it’s clearer that income is not meeting targets assumptions, the government will be forced to find new sources urgently. They will tap into EPF for borrowings, raise bonds if our credit rating is still respectable, and borrow from other nations.

Worse still the government decides that it is time to implement GST and further reduce oil subsidies. This will further burden Malaysians instantly and then what will we say about the budget? By then, we would have forgotten about the positive spins made by BN supporters and struggle even harder to make ends meet.

In the corporate world, we seek to cut costs and eliminate inefficiencies. We seek to make the money work harder in procurement, make it go further. We try not to spend what is not urgently needed. We hold salaries, not give increments. The company as a whole share the burden to see through tough times. Staff are expected to do more, be more productive. Do more with the same staff or do the same with less staff.

In the BN world, we give increments in tough times. We spend more on administration. We allow more opportunities for corruption to happen. We spend in secrecy. We become less accountable. We tax the people more. We reduce oil subsidies to pay for project cost overruns. We make the people pay for our inefficiencies. We borrow more to cover up our mistakes and wrong assumptions.

As a last straw, we blame the opposition and the rest of the world for our incompetence. And we bring forward Christmas by giving out more goodies so the people will sober up and turn a blind eye on all the mismanagement and continue to vote us into power.

All I can say is a big sigh! Our beloved country is moving faster into irrecoverable trouble if we continue on this path the 2012 budget is taking us.

Won’t it be better to tell Malaysians the truth and together we will try to fix things? Keeping to do the same thing to hope for a different and better outcome is sheer insanity.

Malaysians will love our PM had he come out to be honest and bold. That we are in tough times, that together we must sacrifice to weather the storm, that the government will tighten all belts and return more for the people’s benefit, that more will be invested to ensure growth, employment, minimize inflationary impact, create a more attractive foreign business environment, operate with a smaller government, trim the civil service fat, focus on improving productivity and be zealous to eliminate waste (and corruption) and a fair and equitable treatment of Malaysians based on needs.

Wow! Can we imagine what Malaysians will think of him? But no, he is now thought of in a lot of negative light.

PM, please try to remember your economics and fix the budget. There are so many good people who are willing to give you good advice, only if you are willing to hear.

We are in dangerous waters now and we can sink faster given our current direction!

And if you are wanting to be the people’s PM, please do the right thing!


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