Press Conference Statement by Lim Guan Eng during the dialogue with Penang industrialists on anti-recessionary measures on Wedmesday, 19^th November 2008: 

Urge the Federal Government to adopt anti–recessionary measures by implementing a RM 48 billion fiscal stimulus plan, reduce wasteful spending on non-essentials and remove red-tape to increase revenue, cut down costs and improve productivity   

The Penang State Government is willing to work with the business community to urge the Federal government to adopt anti-recessionary measures by implementing a RM 48 billon fiscal stimulus plan, reduce wasteful spending on non-essentials and remove red-tape to increase revenue, cut down costs and improve productivity.

In this regard, I welcome the move made by our Prime Minister to defer the purchase of 12 Eurocopter helicopeters costing RM 1.6 billion so that the money can be used to assist the people affected by the economic recession following the global financial crisis. More such cuts should be made as many wage-earners and businesses are hurting. The Penang state government has already implemented cuts by cancelling the purchase of new cars, flying economy on investment missions, holding government functions in government buildings and deferring all renovation works.

Deputy Prime Minister Datuk Seri Najib Tun Razak had praised China’s US$ 586 billion (RM2.1 trillion) fiscal stimulus plan on housing and infrastructure projects to sustain its economy and create jobs for its people as a positive move that will help Malaysia avoid a recession.. Najib should not rely only on China’s US$ 586 billion fiscal stimulus plan but critically evaluate whether his own USD 2 billion (RM 7 billion) fiscal stimulus plan is sufficient.

I repeat my call for a larger RM 48 billion economic stimulus plan can put Malaysia back on track to make Malaysia into a developed nation by2020 based on four key thrusts:-

• RM 6,000 annual oil bonus to all families earning less than RM 6,000 a month or RM 3,000 annual bonus to bachelors earning less than RM 3,000 a month will cost RM 35 billion or a mere one-third of Petronas last year’s gross profits of RM 107 billion;

• Progressive reduction of corporate tax rate from the present 25% to 17% which will cost RM 13 billion;

• Daily revision of petrol prices to take into account of changes in the international price of oil;

• Immediate reduction in electricity tariffs, which was increased by 26% for businesses when the price of oil was USD 124 per barrel to reflect in the drop to less than USD 60 per barrel.

The Penang state government has also carried out its own expansionary budget with a RM 39.4 million budget deficit for 2009 as compared to RM 35.7 million. 2009 Development expenditure of RM 186 million rose by RM 23.5 million from 2008 budget of RM 162.5 million. Two big development projects that will proceed with Federal government funding has been revived, the RM 4.3 billion Penang Second Bridge which commenced works on 8.11.2008 and the RM 955 million Mengkuang Dam project which will start work next year.

Furthermore the Penang state government has also undertaken 2 social programmes of RM 25.5 million to help the local economy and poor:-

• aid grants to partially-aided and independent schools of RM 8.5 million; and

• RM 17 million one-off payment of RM 100 to 170,000 low and middle-income earners affected by the recession. Amongst the two main items

We urge an immediate reduction in electricity tariffs as all the essential energy resources used by Tenaga has fallen, including coal and gas. Furthermore the reduction in petrol price by 15 cents to RM 2 per liter is too little, when it should be RM 1.62 per liter.

This was proposed by an economics professor from Universiti Utara Malaysia Professor Madya Abdul Rahim Anuar on 13 November 2008 who said that a correct price of RM 1.62 should be set to reflect prevailing low market price of oil. For this reason, the Federal government should reduce the price of petrol further to RM 1.62 per liter so that the people need not pay extra and at higher price than the open market to benefit the few at the expense of the many.

Penang is also prepared to set up a job retraining scheme to look beyond the recession. RM 10 million is earmarked for next year but Penang which comprise 30% of Malaysia’s trade volume and exports requires much more. Due to Penang’s importance to Malaysia, we hope that the Federal government will approve a RM 500 million job retraining scheme over two years.

Finally, both the Federal and state government has to take measures to improve productivity by cutting down red tape. In Penang we have the “build first, approve later” for industrial properties where construction can commence upon submission of plans. We have also set up a Special Task Force for critical investments headed by me to address immediately these problems. And we have only set up our Investment Advisory Panels for investment manufacturing and services sector to further facilitate business in Penang. Remember the business of government is to get out of business so that all can prosper.

---

* Lim Guan Eng, DAP Secretary-General & MP for Bagan