Date of publication: Mar 8, 2014
Section heading: Main Section
Page number: 001
Byline / Author: By Adib Povera; Rupa Damodaran
KUALA LUMPUR: DATUK Seri Najib Razak laid down more of the government's plans towards a stronger and more prosperous Malaysia, saying that he was prepared to put the nation's long-term interests before his own short-term popularity. As prime minister, he said his ultimate responsibility was to protect the people of Malaysia.
"I will never allow our nation's progress, the wellbeing of our people or our sovereignty to come under threat. This is why this government has acted to keep our finances under control."
He said governing was about taking decisions that were right for tomorrow, not just for today.
"Failure to act now would be irresponsible. As a politician, it would be easy to make cheap promises, offer people whatever they want and deal with the consequences later.
"But leadership is about doing what is right, not what is easy. If we ducked the decisions now, our development would suffer.
"I am prepared to put the nation's long-term interests before my own short-term popularity. And, I am confident that the reforms will work. Because our economic record speaks for itself," he said in his keynote address at a half-day National Economic Summit and Dialogue here, yesterday.
Themed "Moving the Malaysian Economy Forward, Getting to the Heart of the Matter", the summit was jointly organised by the National News Agency of Malaysia (Bernama) and Asian Strategy and Leadership Institute (Asli).
Malaysia, Najib said, was on a journey.
"The destination is clear: highincome nation, advanced economy status. Just like any journey, there may be some bumps along the way.
We may need to adjust our course to avoid roadblocks but the important thing is our destination remains the same."
In turbulent years, Najib said the government had kept the country's economy safe and strong.
"When I took office, the world was in financial crisis. Many countries were on the brink of disaster. Yet, our economy continued to grow. Since 2009, our GDP (gross domestic product) had grown by an average of 5.7 per cent annually and our household income is 24 per cent higher."
He said the subsidy reforms had been welcomed by investors and rating agencies.
"Our budget deficit is falling. It is three per cent, which is lower than our target of four per cent.
"We are on the way to a balanced budget by 2020. And, despite what some pundits are saying, Malaysia's economy continues to grow."
For many Malaysians, Najib said, things were getting better.
"But I know that it does not always feel that way. And I understand that talks of GDP growth and economic trends can seem irrelevant when households are trying to make ends' meet."
He said the government would continue with sustainable development programmes and economic reforms. Although the government managed to end extreme poverty when the percentage of families living in poverty dropped by 97 per cent over the past 30 years as well as increasing household income by triple-fold, allocations channelled for blanket subsidies continued to increase.
In 2012, he said the government forked out 21.4 per cent or RM44 billion of its budget to fund subsidies. This, he said, was an increase of six per cent compared with only 15 per cent of the budget in 2010.
"That means money that could have been spent on investments, such as building more schools and training for the young, was used to pay for cheaper fuel for tourists and expatriates. And the costs were adding up.
"In 2009, our budget deficit was six per cent.
"The cost of subsidies was one of the factors driving up the deficit. A budget deficit by itself is not always a bad thing but there are times when debt and deficit can become dangerous."
Najib explained in great length measures adopted by the government, including the introduction of policies to woo foreign investors and his commitment to curb corruption.
As for the proposed Goods and Services Tax (GST), he said the new tax scheme would enable the government to increase its coffers for development and investment, especially in infrastructure, such as schools and healthcare institutions.
"When the cabinet approved the subsidy reforms, it was done on the back of strong recommendations from the Treasury, Bank Negara and Economic Planning Unit," he said, adding that the decision to reduce the subsidies and the proposed implementation of the GST were not "taken lightly".
For this year, a total of RM40 billion would be spent to cushion Malaysians' cost of living and support groups from the low-income households.
"Over the next five years, the quantum of the 1Malaysia People's Aid (BR1M) will be increased to RM1,200 to help cushion the blow of the rising cost of living," he said, adding that subsidy reforms were part of a carefully formed and long-term plan to make the country's economy fairer, stronger, more stable and sustainable.
"I know people are worried about rising prices. We have said that prices will rise when subsidy reforms take effect but it is important to remember why.
"If our debts and deficits were allowed to grow unchecked, Malay- sia's economy would be at risk, affecting the lives and incomes of millions.
"We have taken a calculated decision to act because to do nothing would be irresponsible.
"We are listening to the people's concerns and will make adjustments to our policies when necessary.
"Similar to driving on the highway, if you find traffic in one lane, you shift gear and change lanes but your destination remains the same.
"Our destination remains the same. We are on the brink of achieving developed nation status. If we commit to building a stronger economy for Malaysia, the rewards will be great."
Najib also said by moving from blanket subsidies to targeted support, the government was helping those who needed them the most.
"By strengthening our economy, we are ensuring our country stays on track to reach high-income status.
"By getting our finances under control, we are investing for the future of our families, community and nation," he said.