Najib: Opposition’s alternative budget is full of contradictions
(The Star) – The Opposition’s alternative budget cannot be funded, said Prime Minister Datuk Seri Najib Tun Razak (pic).
Calling it a populist budget, Najib said Pakatan Harapan’s alternative budget could not be backed by substance.
“Their budget is full of contradictions,” he told media editors at a briefing on Thursday (Oct 26) ahead of the tabling of Budget 2018.
Najib, who is also the Finance Minister, said the Opposition’s plan for eliminating the Goods and Services Tax (GST) and to bring back the Sales and Services Tax (SST) would create a shortfall of more than RM20bil in Government revenue. Collection of GST is expected to reach RM42bil this year.
Najib said that after the GST was introduced, personal and corporate income taxes were reduced.
The GST, which he said was a more equitable tax, had not only reduced the size of the black economy in Malaysia but also ensured that the burden of funding Government operations does not rest on the shoulders of a few.
Najib said that out of a workforce of 14 million people, only 2.2 million were paying income tax.
He added that the vulnerable or B40 group of people received direct cash aid to increase the money they have in hand even though the GST was introduced.
Pakatan Harapan said its alternative budget, which was launched on Wednesday (Oct 25), would see the Opposition coalition retain the 1Malaysia People’s Aid (BR1M) cash handouts and National Higher Education Fund Corporation (PTPTN) should it come to power in the next general election.
It intends to restructure the PTPTN loans taken by students by making their repayment on an income-contingent basis, beginning once their salaries exceed RM4,000 a month. The Opposition coalition also wants to abolish tolls by taking over toll concessionaires and give free tertiary education at qualified public universities.
Najib said the debt by PTPTN was RM40bil and that was a big hole to plug. He asked if free education would come at the expense of higher income taxes as seen in many countries where free tertiary education was funded by income tax rates of around 50% whereas Malaysia’s rate was currently less than half of that amount.
“They are promising something that cannot be delivered,” he said.
Najib also said that indirect subsidies were also being practised by the Government. He said the annual healthcare cost to the Government was RM24bil but it only collects RM600mil for providing cheap healthcare to the population. He said the cost of electricity in Malaysia was among the cheapest in this region as the Government still retains a subsidy on the price of natural gas, only reducing the quantum in steps.
