From Malaysian Insider

By Asrul Hadi Abdullah Sani

Datuk Seri Anwar Ibrahim (picture) today slammed Budget 2010 as a “short-term” government policy that only benefitted concessionaires but not the people due to the Barisan Nasional’s financial management weaknesses.
The former finance minister also noted that the people will enjoy welfare provisions in the form of exemptions and tax relief totalling RM500 million but the government will recoup more from new fees charged on credit cards and real property gains tax.

“It is estimated that government income will be more than RM400 million from credit card fees that the people have to take out of their pocket,” the Parliamentary Opposition Leader said while debating Budget 2010 proposals in Parliament.

“This does not include real property gains tax by 5 per cent, which was reintroduced. Revenue from card fees and real property gains tax is far more than welfare distributed to the people through tax cuts and exemptions,” added the Permatang Pauh MP.

Prime Minister and finance minister Datuk Seri Najib Tun Razak tabled the RM191.5 billion Budget 2010 last Friday, promising to slash the 2010 deficit from its highest level in more than 20 years, although he provided few clues as to how the cuts would be realised.

Anwar, who was sacked as deputy prime minister and finance minister in 1998, pointed out that the total welfare for the people is still too small compared to the subsidies received by government concessionaires.
He added in a recent financial report stated that concessionaires enjoyed a gas subsidy of RM20 billion in 2008 and increased to RM 22 billion in 2009.
“Imagine if the subsidies are distributed to the people. Every Malaysian will receive approximately RM815 each,” he asked.

Anwar noted Malaysia has been experiencing deficit for the 13 consecutive years and questioned if the deficit spending is due to the administration’s belief in “welfare of the people first” or is it due to the weaknesses in the economic management of the current government.

He pointed out that Malaysia’s debt went up 18.3 per cent from RM306.4 billion in 2008 to RM362.5 billion in 2009 while since 2006, the national debt has rose 49.7 per cent from RM242.2 billion and the percentage of debt to GDP increased by 41.5 per cent in 2008 to 52.4 per cent in 2009.

He also said state oil giant Petronas’ contribution has doubled from 2005 to 2009 while petroleum and gas reserves has not changed although operating costs have tripled during the same period.

“For the year 2008, the government has allocated RM177 billion of which RM74 billion (42 per cent) contributed by Petronas. This does not include revenue from other companies in the petroleum industry. If taken into account, the estimated income from the petroleum industry reached over 60 per cent.

“While in 2006, the fraction of direct government tax collection ratio is 46 per cent tax on companies, 32 per cent petroleum tax and 15 per cent individuals tax,” Anwar said.

While the government did not announce the breakdown of tax revenue expected in 2010, he said, the general expectation was that petroleum tax is already exceeding the company tax contributions.

“Which raises question marks about the competitiveness of our economy and if it is too dependent on the petroleum industry,” added Anwar.
The Budget debate continues.