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Thursday, November 28, 2013

Bankruptcy inevitable even with GST, Pakatan warns Putrajaya

NOVEMBER 26, 2013
UPDATED: NOVEMBER 26, 2013 04:00 PM
Dr Dzulkefly Ahmad at the DAP forum on 'GST - Cure or Addiction?'
at the KL-Selangor Chinese Assembly Hall, KL, October 16, 2013.
Three PR lawmakers chided Najib for describing GST
as a necessity to avoid bankruptcy. — Picture by Choo Choy May
KUALA LUMPUR, Nov 26 — The Goods and Services Tax (GST) will not avert impending bankruptcy as claimed by Prime Minister Datuk Seri Najib Razak, Pakatan Rakyat (PR) MPs argued today as they continued their fight to stop Putrajaya from implementing the broader tax system they claimed would hurt the middle class.

The PR lawmakers chided Najib for describing GST as a necessity to avoid bankruptcy yesterday, arguing that Malaysia’s finances would break nevertheless if corruption and “leakages” remain rampant and unchecked.

“The GST is not some miracle drug that can be used to fix the country’s poor finances. Even if we implement the GST it does not mean we won’t be bankrupt,” DAP Petaling Jaya Utara MP Tony Pua told reporters in Parliament here.

Just as its alleged, PKR strategic director and Pandan MP Rafizi Ramli pointed out that Malaysia’s weak financial position, including its worrying debt level of close to 55 per cent of GDP, stemmed from corruption and wastage.

“If we do not address this immediately, having the GST won’t improve our fiscal position,” said Rafizi.

Yesterday, Najib was reported as saying that the government was left with no choice but to replace the current services and sales tax scheme with the GST in a move he said could broaden Putrajaya’s income stream and avert bankruptcy.

But Rafizi pointed out that Putrajaya has issued contradicting statements on Malaysia’s finances, citing a reply by Deputy Minister in the Prime Minister Department Datuk Ahmad Maslan in Parliament that the country’s financial position was robust.

“So I want to know which one is the truth? Are or are we not financially healthy? And if we are why the need to implement the GST?”

PR is opposed to the timing of the GST, insisting that it should not be introduced until the country achieves high-income status. They assert that imposing the consumption tax now would broaden the inequality between the rich and poor.

While acknowledging the merits of the tax, PR leaders argued that Malaysia’s stagnant income level made the country unprepared for the new tax.

The pact also argued that the GST was unnecessary.

While Najib said the new tax is needed to help trim the country’s ballooning debt, Rafizi and his colleagues insist this could be achieved through better financial management as well as ending corruption and wastages, all without burdening Malaysians.

A key reason behind Malaysia’s current financial position, they added, is the incompetence of top government officials.

The same problem had been highlighted repeatedly by the National Audit Department, which PAS’s Shah Alam MP Khalid Samad reiterated at the same press conference.

“We have people sleeping at the wheel,” he said.

Financial mismanagement that costs the country billions of ringgit, as highlighted by the annual Auditor-General’s Report, has prompted the Malaysian Anti-Corruption Commission (MACC) to push Putrajaya for a law to deal with negligent public officers.

The demand was made as part of a 14-point recommendation included in the anti-graft outfit’s 2012 report.

Putrajaya has yet to respond.

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