Maiden Budget – Long on rhetoric and short on the Specific.

Dr Dzulkefly Ahmad, MP for Kuala Selangor. (An abridged version of this sent to a local publication).

Beyond the usual ‘more of the same’ goodies that have been packed for almost all, I have no qualm to say that the budget has really nothing to shout about. I wrote a piece of my analysis on the budget and posted on my weblog the same night but in BM though. I’ve decided to call it Bajet Sulung Najib: Macam Ada Tak Kena”. 

 Much in the same vein, I’m fully committed to conclude that Finance Minister may be spot on in identifying the causes of our predicament in the flagging economy. However, perhaps being his maiden budget, he was evidently long on rhetoric and short on the specific ie on actual details of how to make it happen. Incidentally, he repeated the magic word ‘innovation’ 24 times in his 2-hour speech.

Constrained by space, let me focus on his idea of leapfrogging the low-middle economy into a high income economy. Undoubtedly a shackle and a legacy of the BN’s government, that has to be broken soonest. It was once the critical reason for our competitiveness ie the low cost labour, when Vietnam or Myanmar was unheard of. It remains a trap – ‘low-wage-low-value-added’ trap.

 But perusing his speech again, I failed to see where the specifics are. Besides the generic measures, the like of increasing private investments, Islamic hub, green technology, R&D still meager though comparatively, scholarships, tourism sector, what is really new, you may ask.

 Quite notably, there was no mention of minimum wage laws. The courage to put this in place is certainly a brave first step in the right direction. Over reliance on cheap and unskilled foreign labour is the biggest bottle-neck. We must dismantle this. It may be daunting but do it you must, judiciously though. Eliminating the first bottle-neck could enable us to put upward pressure on wages through minimum wage enactment. A high-income economy must surely be tied to productivity. For a start, Najib addressing hard-core and relative poverty is indeed commendable. That’s the second bottleneck though not directly related to the critical success factor of achieving a high-income economy.

 But school curricula that encourage critical and innovative thinking must as well be immediately culturalised. Spending RM 1.6 billion building more schools and stressing on the 3R of early primary education are exactly what’s called ‘doing more of the same’. The entire system needs a transformation. Singapore is at least 10 years ahead because they have a thinking education. The dwindling performance of our universities speaks volume of the dismal state despite all the hypes. A dignified and well-remunerated teaching profession both in our schools and universities must be reasonably comparable to our immediate neighbour.

How will the economy be spurred to a knowledge-intensive enterprises and higher value-added industries if we do not have the enterprising graduates. Both students and their academics are severely stifled by the draconian AUKU. It doesn’t help them to self-actualise.  Creating and creativity begins with freedom to express, productively though. The assault on reason must be removed. We must reward the brains and talents to ensure that they become our educators and the backbone of our industries. Knowledge workers need to be enticed as they are ‘nationless’ or ‘stateless’. That’s the way forward. Give it a time-line of 5 years to get it all overhauled.

Najib has benefited a lot listening to the people and especially the opposition. He knows too well that there are lots to be fixed. The rot is pathetic. He is caught in addressing immediate needs and achieving sustainable future growth. His confusion is evident. Worse still he hasn’t got much to leverage on, by way of human resource ie competent and reliable leaders in his party or his BN fraternity. He is not an epitome of one, anyway. The writer is being frank. He may be aping and plagiarising our slogans and rhetoric but realising it is something else altogether. You need the right team with the right mind-set! BN doesn’t have it. Pakatan has yet to be proven otherwise.

His balancing act of funding his budget deficit through fiscal means ie tax and subsidies, also send mixed signals. While the higher-income group may have lauded the personal tax reduction, the low-middle groups were not amused. Imposing a RM50 charge on a credit card and RM25 on a supplementary one, may not augur well with the idea of encouraging household and private consumption, much needed in a recovery. Najib wasn’t sure who he is penalizing. There were other examples. Besides, that’s quite contrary to putting rakyat first. The card charges must be imposed on the issuers.

Najib should also realize that resorting to fiscal measures may have also adverse macroeconomics impacts ie inflation and growth. Reducing subsidy on fuels surely invites inflationary pressures across the board and will hurt all. Progressive measures are not as yet in placed. Mention of GST scares many especially the low-income group, but tactfully studied and progressively structured on selective items could very well be new revenue for the government. But spending RM 22 million on consulting work to achieve the study is surely ’criminal’ and wasteful, much in the usual style of his party and the BN.

Needless to say that should he find it difficult to seek new revenue base, Najib should be kindly reminded that if he plugs the various holes in the delivery system and avoids the pathetic leakages (read corruption), we are in to save a cool RM28 billion a year. That’s a lot of money to spend.

Building 14 more corruption and 4 appeal courts may be a knee-jerk response. It is high time that we put a stop of doing ‘more of the same things’. It has severely short-changed the nation and only benefiting some crony developers. We are critically on a ‘diminishing return for doing the same things’ all these years. The right way forward is to institute good governance, best practice in transparency and integrity. We all have to change. Be the change we want to see in the world, says Gandhi. No two ways about it and that goes to the Pakatan-led states as well, nay first. Now to walk your talk guys.

With the rest of the budget, I would wish you well Sir, Right Honourable Prime Minister-cum-Finance Minister!