Sunday, 30 September 2012

Budget: A tart whose falsies are plain to the eye

  • Terence Netto
  • 10:35AM Sep 30, 2012
COMMENT Governing, no matter who does it, is part philosophy, part exigency, part panic, part payoff. And it is never easy to ascribe precise percentages to each factor.

However, the 2013 Budget of Prime Minister Najib Abdul Razak, unveiled last Friday, is so patently an electioneering one there is no difficulty making an inference as to its prime motivation: it is to buy votes through payoffs even if that means a steadily worsening national debt situation.

The coupling of ill-affordable munificence with entrenched misallocation of resources is accompanied by nervous anxiety that this time the ruse may not work.

NONEHence a dose of gratuitous denunciation of the opposition must suffice to make the point that though the fat lady may be long gone in the tooth, her would-be replacement is a cad.

It is the government's argument that it is better for the hoi polloi to persevere in faith with the devils they know (despite the looming bankruptcy their profligate ways invite) in preference to angels (who have done, to be sure, some pretty nifty work in some places) promising the sun and the moon but who are certain to wind up without the shirts on theirs and the people's backs.

The fact that the auditor-general's annual report, nominally the preamble to the Budget, was delayed this year till after the latter's presentation was indicative of things seriously amiss.

Since the mid-1980s when the redoubtable Ahmad Nordin applied abundant common sense to his office's fiduciary scrutiny of government accounts, this comprehensive annual appraisal has become a matter for trepidation by the public.

But to an administration that flashes the catch word "transformation" as promiscuously as a desperate tart would her wares, this delay in the AG's report is not be terribly distressing, given that a general election is due and the fate of the government is said to be balanced by a thread in which case such niceties like the AG's report being released before the Budget can be ignored.

A subservient mainstream media can spin this as a hiccup rather than what it actually is: a red flag signaling more distress points in the system.

Expect GST after the polls

The annual budget of democracies is an account of how a government proposes to raise revenue and disburse it.

It is inherently a statement of political and economic philosophy, the enunciation of which is usually done in ways that transcend the parochial simply from grave contemplation of the importance of the matter it deals with - a country's finances whose responsible stewardship is vital to the well-being of not just the present generation of citizens but successive ones too.

Thus the disclosure that the already high national debt would soar past the RM500 billion mark under spending envisaged by the 2013 Budget is a matter of grave concern, given that the economy is already overly dependent on revenue from a fast depleting resource (oil) and is trapped in a labour intensive, middle-income cycle.

The government has announced plans to transform this reality into something more dynamic but so far there are no signs that structural disparities stemming from crony capitalistic practices and monopolies are being watered down and removed.

Favouritism and protectionism towards an elitist few and election year dole outs to an underclass essentially compose the warp and woof of the government's economic policy.

may first worker against gst gathering 010510 banner 05This is accompanied by Santa gifts to various groups, like taxi drivers, intended more as sops than as sinews for their regeneration.

The handouts are a conjuror's trick whose falsity will be exposed by the severity of the Goods and Services Tax (GST) that the government plans to introduce once this election is over and they have won the vote.

All told, the handout-targeted groups of civil servants, the underclass, and young voters comprise more than half the 12.5 million voters presently on the rolls, an increase of two million over the size of the electorate at the last election when the Umno-BN government lost to the opposition in the popular vote on the peninsula and had to rely on their traditional strong plurality in Borneo to carry them through.

Spiraling national debt 

Now one wing of their Borneon bastion is in tumult, its appeasement by Najib's announcement of a Royal Commission of Inquiry into a festering issue - illegal migrants - is turning out to be as chimerical as, perhaps, the handouts promised by 2013 Budget could well become.

Meanwhile, the national debt rises swiftly and menacingly, but a spendthrift government is undaunted.

Blithe indifference to spiraling national debt was the hallmark of the social democracies of the West now is peril from insolvency, with national debt-to-GDP ratios before their crises hit as anemic as the one Malaysia now sports.

But a government more interested in salvaging its survival than in prudential management is apt to gallop to the precipice's edge under a bogus patina of "transformation."

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