‘Populist measures not sustainable’
KUALA LUMPUR: BMI Research’s assessment of Pakatan Harapan’s manifesto for the 14th General Election has validated criticisms of the opposition pact’s pledges by various quarters, say economists.
They believe that the pact’s promises of abolishing the Goods and Services Tax (GST), as well as writing off outstanding study loans under the National Higher Education Corporation (PTPTN), are populist measures that would not be sustainable, and would damage the country in the long run.
Political analyst and veteran economist Professor Dr Hoo Ke Ping said it was hard to see how the opposition planned to fund these promises.
“They have promised the moon and the stars. How are they going to fund these by abolishing the GST, tolls and PTPTN loans? These are populist measures and irresponsible.
“If they come into power and realise they can’t do it, will they? I doubt it.”
Former economist Tan Sri Dr Ramon Navaratnam expressed his concern over their pledge to remove the GST, which he said had to be compensated with another source of revenue.
“They can only do so if they show that they can contain the deficit from it. One way to do so would be to implement higher personal tax or property tax.”
Sunway University Business School economics professor Dr Yeah Kim Leng touched on PH’s pledge to review the contracts of large-scale infrastructure projects.
The BMI report had said that promises to review contracts of large infrastructure projects could jeopardise the country’s good relations with China, which is one of Malaysia’s largest investors and trade partners.
Yeah said a review of such contracts would be detrimental to market confidence and sentiments.
“Contracts are a sanctity or a barometer for market integrity and confidence, and any nullification of contracts has to be compensated based on market terms. That can be very costly, especially in terms of mega projects.
“Unless there is some compromise but, then again, that will send us back to the drawing board. It will also be difficult to outline better terms without adequate compensation, unless the contract was one-sided to begin with.
“Chances are high that we will be the losing party, unless we have paid too high or undervalued our assets. At this juncture, it’s too premature or speculative to make such a judgment because when push comes to shove, they may retain everything and continue with the contracts, especially if the costs outweigh the benefits,” he said, dismissing the opposition’s pledge as political rhetoric.