Eliminating overlaps in functions of ministries
> Govt aims to manage operating expenditure more efficiently: Johari
KUALA LUMPUR: The government wants to eliminate overlaps in the functions of ministries in a bid to effectively manage its operating expenditure (opex), said Second Finance Minister Datuk Johari Abdul Ghani.
“Duplicating expenditure among the ministries... we’ll make sure we eliminate that. If we analyse, quite a number of ministries are doing the same thing, for example entrepreneur-driven (roles), as well as research and development. We need to consolidate and look at it effectively so that every dollar that we spend will benefit the rakyat directly,” he told reporters at the National Chamber of Commerce & Industry of Malaysia (NCCIM) roundtable session here yesterday.
However, in managing opex, government emoluments cannot be cut, he said.
“That is our commitment to 1.6 million government servants. We need to pay them (salary) and pension, for example. These two components of expenditure will increase every year because of increments and bonuses.
“We need to manage that and we want to make sure we increase the productivity of every government servant and hopefully in the long term, as the economy grows, we don’t grow with the number of staff,” said Johari.
In view of the lower revenue due to the slump in oil prices, Johari said the government will focus more on rakyatcentric projects such as the building of schools, hospitals, rural roads and will put on hold projects which will alleviate government spending.
Mega projects like the Pan Borneo Highway, Mass Rapid Transit, Light Rail Transit, High Speed Rail and East Coat Railing which will bring long-term benefits to the people will be continued, he said. “The five key development projects that we put in place hopefully will stimulate the economy and give multiplier effect to small and medium industries.”
In his keynote address, Johari said Malaysia needs to have sizeable and sustainable reserve funds to provide stability and help insulate the economy from the volatility of commodity prices.
He said countries like the United Arab Emirates and Saudi Arabia, with sizeable reserve funds of US$1.2 trillion and US$758 billion respectively, are examples of nations that have been successful in cushioning the impact of the significant decline of oil price on public spending.
The decline in oil prices has resulted in the government losing about RM30 billion in revenue. In 2014, Malaysia’s revenue from the oil sector was RM65 billion, derived from loyalties, petroleum tax and dividend from Petronas. This was reduced to RM30 billion in 2015, which was a marked difference.
“We need to do some adjustments in terms of our spending,” said Johari.
NCCIM vice-president Tan Sri K.K. Eswaran (left) presenting a souvenir to Johari. On the right is NCCIM secretary-general Datuk Syed Hussein Al Habshee.