Speech at Political Retreat In Teluk Batik
by Lim Guan Eng

(Lumut, Saturday): Even though Second Finance Minister Tan Sri Nor Mohamed Yakcop said today that Malaysia will continue to experience a stable interest rates environment until 2007, he refused to rule out an interest rate increase this year. Instead, he said that there would be changes in interest rate but these would not adversely affect the economy. This indicates that inflation would serve to affect and cut the purchasing capacity and standard of living of ordinary Malaysians.

Such a casual attitude towards increases in interest rate is consistent with Tan Sri Nor’s earlier statement on 10.2.206 that the Government is not concerned about inflation. Very few Malaysians would agree with Nor Mohamed that inflation is not a concern when we have been paying higher prices. By stating that he is not concerned about inflation, only increases the likelihood of further price increase in 2006 of essential items.

The time has come for MCA, Gerakan and MIC to state whether they support DAP’s proposal for a price freeze of government-controlled services and products, especially

1.      fuel and gas;

2.      quit rent as announced by some states such as Melaka, Negeri Sembilan and Perak;

3.      assessment rates;

4.      electricity tariff as proposed by Tenaga Nasional Bhd;

5.      water rates after the privatization/corporatisation of water supply services is approved by Parliament in March this year;

6.      insurance premiums of health card/medical care;

7.      tobacco;

8.      alcohol and beer;

9.      university-related fees following the reduction of government assistance of 90% of government assistance to 70%; and

10. bank’s interest rates.

Our economy’s growth rate has performed worse in 2005 at 5%, as compared to 7.1% in 2004 whereas inflation increased to 3% in 2005 to 1.4% in 2004. Further, many businessmen have complained about the drop in business last year despite registering a 5% growth rate and paying higher prices above the official 3% inflation rate.

Nothing has been done by the government to ensure that the people enjoy equally the benefits of the country’s economic growth. The failure to ensure equitable distribution of economic benefits is due to inefficiencies in the delivery system and extensive corruption such as no open tenders and cronyism where government contracts are awarded based, not on technical know-how but political know-who.

The latest RM 756.7 million Metramac Corporation scandal where the Court of Appeal openly judged the then Minister of Finance Tun Daim Zainuddin of abusing his power to favour certain businessmen and companies, directors openly stealing and cheating their companies RM 32.5 million and misusing public funds of hundreds of millions of rinngit for the private benefit of few individuals. At the local level, we have appointed councilors refusing to uphold accountability and transparency when they go for expensive overseas junkets to “makan angin” at public expense. Is this how our assessment rates are utilised instead of improving services, roads and drainage?

To curb inflation, Prime Minister Datuk Seri Abdullah Ahmad Badawi had promised on Sept. 7 2005 that it would halt further fuel price rises for 2005 and delay increases in highway toll rates until after 2006. However even this effort to check corruption may be doomed to failure if he fails to renew the promise that there will be no fuel price increase this year.

DAP urges the government to take the initiative by announcing a price freeze in essential items within its control as stated above particularly quit rent, assessment rates, electricity tariffs and water rates as well as fuel. Such a price freeze would at least help Malaysian businessmen and wage-earners reduce their financial burden in this difficult times and agree with Tan Sri Nor that inflation is not a concern. MCA, MIC and Gerakan must express their stand on the economic question and issues facing the country.

(18/02/2006)