‘It’s a ruse to confuse the people’

KUALA LUMPUR: The alternative budget presented by the opposition is a ruse to confuse the people as it is financially not feasible, a senior Finance Ministry official said yesterday.

Citing the proposal to raise the minimum wage to RM1,500, the official asked who would be footing the bill for the extra RM500.

There was no way the government could afford this as it was one-third of the proposed new minimum wage, he said yesterday.

As it is, he said, the government was seeking new sources of income, despite stiff challenges in the external environment, particularly the decline in crude oil prices.

As such, there should be appreciation for the previously-criticised but now accepted Goods and Services Tax (GST), without which some RM30 million would be wiped off from the government coffers.

As for the opposition’s proposal to cut allocations, especially to the Prime Minister’s Department, he said the opposition should get their facts right.

There was a difference between the Prime Minister’s Office (PMO) and the Prime Minister’s Department, as the PMO was a subset of the department, which was a larger entity housing numerous important units and agencies, he said.

Cutting RM10 billion in allocations to the Prime Minister’s Department meant cutting funds for the Public Services Department, Public Private Partnership Unit (UKAS), Bumiputera Agenda Steering Unit (Teraju) and many others.

He said certain quarters were spreading lies that the government was bankrupt, when in actual fact, it was practising prudent financial management and efficient resource allocation.

He said: “Malaysia cannot be deemed a failed state as its debt is only 55 per cent of the gross domestic product (GDP).”

“If that’s the case, then there would be many bankrupt countries as their debts are very much higher than Malaysia’s,” he said.

Economists have described the opposition’s proposed increase in minimum wage by RM500 as “unrealistic”.

They said it was also not realistic and fair to put the burden on the government to fork out the additional RM500.

Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the proposal was not realistic given the country’s current revenue and account deficit.

“The budget is already very tight even after the implementation of the Goods and Services Tax.

“If you look at the numbers, we achieved RM27 billion in revenue in the first nine months since the GST’s implementation last year.

“But as of the first half of the year, we collected RM17 billion only.

“I don’t think that it is feasible at this point,” Afzanizam told the New Straits Times yesterday.

In its alternative budget announced on Wednesday, Pakatan Harapan proposed that the minimum wage be increased from RM1,000 to RM1,500 in Peninsular Malaysia.

It also suggested that the RM500 difference should come from the Federal Government instead of employers.

Economist Tan Sri Ramon Navaratnam said the proposal might be doable over the long term when the government had pared down the deficit.

“It can work, but it will mean further trimming of the budget.

“In this current climate, it is not a time to celebrate but a time to save, so only when the government has cut off the wastages, can we do this.

“In the meantime, we should look at raising the minimum wage incrementally instead of raising it so much in a short time,” Ramon added.

Sunway University economics professor Dr Yeah Kim Leng likened the proposal to the 1Malaysia People’s Aid, saying it was monetary assistance to the B40 lower-income group.

Yeah said any increase in minimum wage needed assistance from the private sector, not just the government.