Cabinet should ensure that increase of another 4,000 varsity places this year to match the 16% increase last year should not be the first victim of the sudden budget cut-backs decided after the general election

Media Conference Statement (2)
at the Petaling Jaya Central Police Station (Section 8)
by Lim Kit Siang

(Petaling Jaya, Friday): DAP calls on the Cabinet on Wednesday to ensure that the essential and critical sectors of education and health should be excluded from the sudden budget cut-backs decided after the general election – and in particular, that the increase of another 4,000 university student intake this year to match the 16% increase last year should not be the first victim of the budget cutback.

The parliamentary secretary to the Finance Ministry, Datuk Hilmi Yahya told Parliament yesterday that ministries are spending their allocations “too fast”, resulting in only RM17 billion from the Eighth Malaysia Plan left for development projects.

Instead of staggering their expenditure over five years, the ministries spend at a faster rate, leaving only RM17 billion from the RM160 billion given at the start of the plan in 2,000.

This is most shocking, as it testifies to an exercise to “spend, spend, spend” partly to create the “feel good” effect in the run-up to the 11th general election  - resulting in over-expenditure, not necessarily in the most important and critical sectors of the economy.

Based on RM160 billion development expenditure for five years, this works out to an annual expenditure of RM32 million.  With one month still to go before the end of the first half of this year, this means that without increased funds, the government will have to make do in 18 months until the end of 2005 with  the meager sum meant for six months!

Parliament should be given a full and satisfactory report as to why such an over-expenditure had been allowed to go on for over three  years without check, which does not speak well for effective financial management, control and discipline – reflecting adversely on the Treasury, the Auditor-General and Parliament.

If the government has to cut down expenditures, it must start with the less essential projects like suspending the frenetic pace of construction of the RM25 billion Putrajaya, which is one of the most unproductive mega-projects of the government. 

DAP is very concerned that following the directive from the Treasury requiring that all ministries cut back on their 2004 spending to that of 2003 levels, and that there  would be no increase in financial allocation for 2004, the poor, the disadvantaged  and the less well-off sectors of the population will bear the brunt of the cutback.

Malaysiakini also revealed that as a result of the cost-cutting measures, the Health Ministry will not be able to meet staff salaries by as much as RM210 million, and that it would need to reduce its spending by about RM3.8 billion - from the RM9.5 billion originally planned for 2004 to RM 5.7 billion set the previous year.

In this connection, DAP calls on the Prime Minister, Datuk Seri Abdullah Ahmad Badawi, who is also the Finance Minister, to present a White Paper to Parliament next week stating how the cutback would affect essential and critical services in the public sector, as well as efficient and effective delivery of public services.


* Lim Kit Siang, Parliamentary Opposition Leader, Member of Parliament for Ipoh Timor & DAP National Chairman