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Friday, March 14, 2014

`Fiscal consolidation to put KL on solid ground'


Publication: NST
Date of publication: Mar 13, 2014
Section heading: Business Times
Page number: 006
Byline / Author: By Rupa Damodaran

KUALA LUMPUR: MALAYSIA'S fiscal consolidation efforts will position it on "solid ground to brace itself against any volatility arising from the United States Federal Reserve's quantitative easing (QE) programme", said a visiting European economist.

Professor Michael Heise, who is chief economist of Allianz SE, a leading insurer, also described the move to shrink the fiscal deficit to 3.5 per cent of gross domestic product (GDP) as sensible.

"This helps to prepare for the volatility," he said in his media presentation on "Perspectives for the world economy and Asia" here, yesterday.

Allianz projected Malaysia to grow by 5.2 per cent this year and five per cent next year, which are both based on the assumption that China will not go through a hard landing with its growth rebalancing efforts.

"Malaysia has been on a stable trajectory after the 2009 global crisis and the fiscal deficit will shrink further, thanks to fiscal reforms."

While stronger exports stimulated by uptrend commodity prices and higher private investment will drive the economy, he said the contribution from private consumption will decrease.

This is mostly due to the policy initiatives like the Goods and Services Tax (GST), which the government will introduce in April next year.

"The net effect will lower the private consumption growth and may lower the savings ratio."

Heise, who is the group public policy and economic research head, does not expect the recent uptick in prices in Malaysia to have a strong impact on the inflation level.

Keeping interest rates at the current level would be a plausible mo-ve by Bank Negara Malaysia, he added.

On the ringgit, he expects the currency to devalue by another five per cent by year-end mostly on concerns of the tapering.

The European Central Bank and the Fed's action may create "some noise" in the financial markets and put some pressure on the emerging markets but they would have already been factored in by these markets.

For the global front this year and next, he said higher inflation is expected through increase in demand and also higher commodity price (through the Ukraine crisis) and as interest rates normalise.

He, however, warned of the return of bubbles and financial volatility.

On the risks of the Ukraine crisis, Heise said oil prices were likely to trend upwards and a sovereign default (in Ukraine) increasing.

'If the conflict drags on, the world economy would suffer a substantial blow to growth and there would be substantial impact on the equity and bond markets."

Asia, however, remains a key driver of global growth, despite a less dynamic development.

The export industry in Asia will benefit from the recovery in Europe, which is estimated to grow by 1.7 per cent this year, contributing to a stronger global trade.

However, if the Fed tapering surprises and "prompts another sharp retrenchment" in capital inflows, the region (ex-China and South Korea) will face financial market volatility, especially in Indonesia and India.

The Malaysian insurance market is not among the largest in the region with total premiums amounting to ?10 billion (RM45.5 billion) last year.

It boasts a relatively high level of development, particularly compared with the Indonesian or Chinese markets.

"Over the next decade, we expect premiums to increase by an average of seven per cent a year," he said, adding that Malaysia's insurance market will have more than doubled in size by 2024.

Don't blame GST for price increases, says Customs

Published on: Wednesday, March 12, 2014 

Kota Kinabalu: Lower income countries have already implemented the Goods and Service Tax (GST) and a middle-income country like Malaysia should not be afraid to carry out its plan to start the tax next year.

Sabah Customs Department Director Datuk Janathan Kandok said lesser countries like the Philippines and Laos have implemented the system for years.

"Currently, there are only three countries in Asia that have not implemented the system - Malaysia, Brunei and Myanmar.

You cannot compare us to Brunei though, it's a rich country.

"If other countries can support this, why not our people?" said Janathan in his opening remark during a Customs briefing on GST at Wisma Kastam, here, Tuesday.

He said the people should not blame GST for the continued increase in prices of goods in the country since the system is not yet in place.

"GST will only be implemented on April 1 next year. We have received numerous complaints from the public saying they are being charged with GST and as proof, they showed the GST remark under their lottery tickets.

"This GST does not stand for Goods and Services Tax but Gaming Service Tax and it had been in place for quite some time," he said.

Janathan added that there are many reasons for price increase, including the nation's dependence on imported items such as meat and rice, the changing price of oil in the global market, natural disaster, greedy traders and low supply.

The tax was tabled for its first reading in 2009 but was delayed amid mounting criticism. During the government reading of the 2014 budget, Prime Minister Datuk Seri Najib Tun Razak announced a GST tax of six per cent.

This will replace the Sales and Services Tax, a tax of between five and ten per cent.

Retailers should prepare early for GST


Published on: Friday, March 14, 2014 

Kuala Lumpur: Retailers must start preparing now for the implementation of the Goods and Services Tax (GST) to avoid last-minute chaos and business disruption, says Malaysian Retailer-Chains Association President Datuk Nelson Kwok.

He said Malaysians were known to wait until the last minute and this would inevitably cause confusion when the GST takes effect on April 1, 2015.

"Retailers are bound to face challenges and teething problems in the early adoption stage of the exercise," he said during a briefing on the impact of the GST on retail businesses here Thursday.

The briefing was organised by MRCA together with Retail Group Malaysia and Goldsoft, a retail software provider, to discuss issues faced by retail-chain businesses in the implementation of the GST.

"Retailers may need more than six months to prepare for the implementation as such they should start now.

The systems need to be in place to lower the risk of errors in tax declaration and reduce compliance costs due to penalty," he added.

Meanwhile, Goldsoft Sdn Bhd Executive Director Alex Lim said the implementation of a proper processing system goes beyond simplistic understanding of GST especially for medium to big-sized retailers.

He said among the challenges in the implementation of the processing system was staff training, inventory classification, customer/supplier GST registration details, running simulation and software implementation time frame which might take more than six months. - Bernama

Malaysia will benefit from GST


Posted on 13 March 2014 - 04:53pm
Last updated on 13 March 2014 - 08:10pm

TAWAU: The Goods and Services Tax (GST) will benefit Malaysia, just like the 160 countries which have successfully implemented the system.

Tawau Customs chief Yunos Tahir said Malaysians should support and not reject GST which had been adopted by Indonesia, Thailand, Vietnam, China, Argentina, Australia and New Zealand.

"GST is a tax system that benefits people as it is more effective, customer friendly and can overcome weaknesses in the present system such as double taxation.

"It can overcome the leakage of revenue from transfer pricing, improve tax compliance, reduce cost of doing business and reduce bureaucracy," he said at the GST Awareness Programme, today.

Yunos said GST would also help the government to reduce the income tax and corporate tax rates which was confined to a particular group. – Bernama

GST – one-off effect seen


Posted on 13 March 2014 - 08:07pm
Last updated on 13 March 2014 - 08:36pm
Adrian Phung

KUALA LUMPUR: The implementation of the goods and services tax (GST) in April next year will only see a one-off effect on retailers and after that it will return to normal in about six months.

Retail Group Malaysia managing director Tan Hai Hsin said the initial impact of the GST on retailers will be in the area of cost management as some suppliers may increase their current prices as a result of a knee-jerk reaction to the new tax.

"Recent price hikes of essential items such as electricity and fuel have already diluted the profit margins for retailers.

"As a result, the implementation of GST may just place further pressure on retailers in their cost structure, not just in terms of rising price of inventory but also in compliance cost," Tan told reporters after addressing the topic of GST compliance for retailers.

Tan said although there were possibilities for the prices of certain goods and services to be increased by the retailers, consumers with a normal lifestyle, regardless of income group, will not suffer much.

"This is because consumers are unlikely to pay more for basic goods and services because those items are zero rated and retailers have to absorb the cost. In other words, all the goods and services like rice, sugar, vegetables, meat, healthcare, education and public transport, will be exempted from GST. Thus, consumers are unlikely to pay more for essential goods and services."

On what would be the effect of GST on medical rates, Tan said it is still too early to tell because healthcare is zero rated, so some clinics might choose to absorb the cost but they will not be able to sustain it in the long run.

Also present at the briefing session was Datuk Nelson Kwok, president of the Malaysian Retailer-Chains Association.

Thursday, March 13, 2014

BR1M as a short-term measure


Publication: NST
Date of publication: Mar 12, 2014
Section heading: Main Section
Page number: 019
Byline / Author: By Dr Irwan Shah Zainal Abidin

I REFER to the speech by Prime Minister Datuk Seri Najib Razak at the National Economic Summit and Development (NST, March 8 - "My responsibility is to protect the people").

I am glad the prime minister has made it clear that he is prepared to put the nation's long-term interests above his own short-term popularity. Without a doubt, economic stability is vital for political stability.

It seems that the centrepiece of his keynote address is explaining the rationale of the government in undertaking structural reforms, especially in the form of subsidy rationalisation and the introduction of the Goods and Services Tax (GST). These two measures are part and parcel of the government's National Transformation Policy, under the Economic Transformation Programme.

Subsidy rationalisation is meant to reduce government spending, whereas the implementation of GST will increase government revenue. Together, they will reduce the government's debt and deficit levels. GST will be in place on April 1, next year, and so the government's debt and deficit levels are expected to be reduced further in the near future.

Besides subsidy cuts and GST, the government is also committed to making the public delivery system more efficient and to fight against corruption via the Government Transportation Programme. This is manifested, among other things, through actions taken by the Chief Secretary to the Government on the 2012 Auditor-General's Report and the introduction of the open tender system on government procurement. Still, the proof of the pudding is in the eating.

In his speech, Najib also delved into steps taken to address the rising cost of living, which is one of the direct effects of the structural reforms being taken. This includes short-term measures, such Bantuan Rakyat 1Malaysia (BR1M), and long-term ones, such as spendings on public health and education.

Even though, in principle, I agree with BR1M, I believe it should be maintained as a short-term measure and not a long-term or permanent one.

Although the rise in cost of living is cyclical, it is crucial to embark on other complementing measures in managing rising prices.

These include policies to promote competition, competitiveness, efficiency and production.

In addition to that, salary levels need to be increased in tandem with the rise in living costs, and at the same time, to transform the quality of the education system , as this relates to productivity levels and overall wage rates.

The greatest challenge the Malaysian economy faces is meeting the projected growth level of the economy to break away from the middle-income trap and reach the status of high-income and developed nation by 2020.

Dr Irwan Shah Zainal Abidin, Senior lecturer, School of Economics, Finance and Banking, Universiti Utara Malaysia

Mahu GST dilaksana secara beransur-ansur


10 Mac 2014

PETALING JAYA - Persatuan Pemaju Hartanah dan Perumahan Malaysia (REHDA) mencadangkan cukai barang dan perkhidmatan (GST) dilaksanakan secara beransur-ansur kerana ia akan memberi kesan kepada kemampuan pengguna membeli rumah. 

Pengerusi Jawatankuasa Kewangan dan Pelaburannya, Datuk Ng Seing Liong, berkata enam peratus GST, yang akan dilaksanakan mulai 1 April 2015 adalah agak tinggi dan akan membebankan pengguna.

"Margin pemaju juga akan menjadi lebih rendah dengan pelaksanaan GST," katanya dalam taklimat media mengenai 'GST - Kesan Ke Atas Industri Perumahan' di sini hari ini. 

Ng berkata, REHDA telah mengemukakan beberapa cadangan mengenai GST kepada kerajaan dan sedang menunggu maklum balas. 

"REHDA telah menggesa Kementerian Kewangan memberi pertimbangan serius kepada cadangan terbabit kerana pelaksanaan GST dalam bentuk yang ada sekarang akan menyebabkan beban kewangan, menambah kepada kos pembangunan dan seterusnya kenaikan harga rumah serta akhirnya akan ditanggung pembeli," kata Ng. 

Beliau berkata, REHDA mahu kerajaan memperluaskan barangan dan perkhidmatan berkadar sifar kepada komponen kos utama projek pembangunan hartanah seperti batang keluli, besi, simen, konkrit dan agregat pasir atau menimbangkan bantuan kepada pembekal bagi membantu mereka mengatasi masalah aliran tunai. 

"Pembekal terbabit mungkin melepaskan kos dalam bentuk harga yang lebih tinggi," katanya. 

Industri itu juga mahu duti setem ke atas pemindahan hartanah dikekalkan pada kadar maksimum tiga peratus sekarang, bukan empat peratus seperti dicadangkan, katanya.

Ng bekata, pelaksanaan GST akan menambah selapis lagi kos kerana sudah wujud pelbagai 'cukai' dikenakan seperti cukai keuntungan hartanah, levi Lembaga Pembangunan Industri Pembinaan dan cukai perkhidmatan.

Cadangan lain, katanya, ialah membenarkan pemaju menggunakan peruntukan tetap -- sama ada keluasan terbina , keluasan tanah (ekar) atau sebarang kaedah (pengasingan antara pembangunan kediaman dan komersil - dalam menuntut baki cukai input.

Untuk perjanjian pembelian tanah yang dilakukan sebelum April 2015, bayaran diterima ke atas invois yang dikeluarkan sebelum tarikh itu tetapi bekalan tanah diperolehi selepas tarikh berkenaan, tidak dimasukkan ke dalam GST, katanya. - Bernama

Felda ties up with SAP to explore potential GST businesses


Published: Monday March 10, 2014 MYT 5:41:00 PM 
Updated: Monday March 10, 2014 MYT 5:46:08 PM

KUALA LUMPUR: Felda Global Ventures has partnered with SAP Malaysia Sdn Bhdto explore business opportunities in the Goods and Services Tax (GST) assessment and implementation.

In a filing to Bursa Malaysia on Monday, the group signed a non-binding Memorandum of Collaboration via its subsidiary Felda Prodata Systems Sdn Bhd, where the tie-up would explore the GST-related services in the public and Government sector.

“The MOC sets out the understanding and intention of the parties during this interim exploratory period.“The MOC shall remain valid for six months or such extended period as agreed in writing by the parties,” it said.

Wednesday, March 12, 2014

GST: Tentukan Kaedah Terbaik Beri Penerangan



March 11, 2014

KUALA LUMPUR – Kerajaan perlu menentukan kaedah terbaik dan berkesan dalam memberi penerangan mengenai Cukai Barang dan Perkhidmatan (GST) yang akan dilaksanakan April tahun depan, kata Tan Sri Shahrir Abdul Samad (BN-Johor Baharu).

Beliau berkata ini bagi memastikan rakyat dan golongan peniaga benar-benar faham mengenai cukai itu dan impaknya kepada kehidupan seharian mereka.

“Bukan sahaja buat majlis penerangan tetapi kena tentukan kaedahnya difahami, pendekatan penerangan perlu dipantau, barulah kita boleh tahu sama ada penerangan mudah difahami atau tidak,” katanya ketika membahaskan usul menjunjung kasih titah Diraja pada persidangan Dewan Rakyat hari ini.

Shahrir berkata kerajaan juga mungkin boleh membuat sesi penerangan yang berbeza khusus untuk golongan peniaga yang akan melaksanakan cukai itu terhadap barangan mereka.

“Bila maklumat daripada penerangan kepada ahli perniagaan disampaikan kepada pengguna atau pemimpin masyarakat, ia akan timbulkan salah faham dan cara penyampaiannya tidak berkesan, kita yang dengar pun tak faham,” katanya.

Beliau berkata bancian juga boleh dibuat untuk menentukan sama ada mereka yang diberi penerangan itu benar-benar jelas mengenai GST.

“Tanya (dalam) bancian adakah anda faham tentang soal GST, setelah diberi penerangan masih tidak faham juga, panggillah pegawai daerah atau ketua kampung yang dah dengar penerangan cuba terangkan balik,” katanya.

Persidangan Dewan bersambung esok. – BERNAMA

Find best way to explain GST: Shahrir


Posted on 11 March 2014 - 10:54pm
Last updated on 11 March 2014 - 11:08pm

KUALA LUMPUR: The government has to decide the best and effective approach in explaining to the public the Goods and Services Tax (GST) to be implemented in April next year.

Tan Sri Shahrir Abdul Samad (BN-Johor Baru) said this was to ensure the people, as well as traders, understand what GST is all about and its impact on their daily life.

"There should not only be information sessions, but should make sure the campaign is on the right track to get public support," he said when debating the motion of thanks on the royal speech in the Dewan Rakyat.

Shahrir suggested the government organise a separate information session, especially for traders who will have to impose the tax on their goods.

"When information meant for the business community is passed on to consumers or community leaders, there will be misunderstanding," he added.

He said a survey can be carried out to determine whether those who attended the GST briefings understood what GST is.

The Dewan Rakyat sitting continues tomorrow. – Bernama

Tuesday, March 11, 2014

Worrying rising cost of medical care


Publication: NST
Date of publication: Mar 11, 2014
Section heading: Main Section
Page number: 019
Byline / Author: By Dr Tan Eng Bee

I AM appalled at the rising cost of medical care following the 14.4 per cent hike across the board for those seeking treatment from private doctors.

The rise is considered minimal, but with the implementation of the Goods and Services Tax (GST) next year, the total cost will be higher.

I foresee many who can't afford the cost of private doctors queuing up with the many seeking treatment in government hospitals.

In fact, we know of private medical practitioners whose businesses are badly affected as more go to government hospitals. For the rakyat, a ringgit saved is a ringgit earned.

Inevitably, the poor are feeling the pinch unless they can wait for treatment in government hospitals, provided their illnesses are not terminal or in need of urgent treatment. Unless one has medical insurance, the best alternative is to seek treatment in government hospitals and to endure the long wait.

The waiting list in most hospitals is long and poor patients have no alternative but to wait for their turn. On any given day, hundreds seek treatment in government clinics and hospitals.

The rich are also joining the increasing number in government hospitals to take advantage of the modest RM2 fee.

Those who face life-threatening illnesses may opt for private hospitals, but they have to rely on their hard-earned savings or sell possessions to pay the bills.

I was told that day care in a private hospital in a normal ward in Kajang can cost RM1,000 a day, with every item used chargeable.

I fail to understand how an overnight stay in a private hospital to recover or recuperate can be more expensive than staying in a five-star hotel in the heart of Kuala Lumpur. Business considerations are pushing prices higher than what ordinary people can afford.

Unless a comprehensive health scheme is put in place, medical accessibility and affordability will be issues of real concern to the public in the years to come.

The government should seriously consider ways to circumvent the rising medical costs. One way could be to make it compulsory for employees to buy medical insurance at the start of their working life to pay for medical care in their later years when they are no longer employed.

Another idea is to implement higher Socso payments to employees covered by medical insurance for terminal illnesses and sickness which require hospitalisation? A small addition to what employees are paying currently may go a long way to offset their medical needs during their old age.

On the other hand, thousands who subscribed to Sosco when it was first implemented find it odd that upon retirement, they cannot use a single sen to offset medical bills during their ageing years.

Perhaps a form of return, such as access to free medical attention and medical facilities at either government or private hospitals, should be given to former Sosco members upon retirement.

A high-powered committee should be set up to consider the rising medical cost and to formulate a comprehensive remedy to address this matter without delay and for action at the highest level.

The national comprehensive medical scheme should provide the poor access to medical care. It is time such a scheme be created for those who can ill-afford costly medical treatment. The rich have no problem paying for their medical needs but it is always the poor who bear the brunt of rising medical cost.

Striving to be a developed nation by 2020 means our standard and quality of medical care must improve significantly and be made accessible and affordable to the poor despite the surge in cost, which will continue to escalate in the years to come.

We have no problem seeking general medical attention in government hospitals. But the critically sick should opt for private hospitals because of the long waiting list in government hospitals.

Dr Tan Eng Bee, Kajang, Selangor

King offers sympathies to affected families


Publication: NST
Date of publication: Mar 11, 2014
Section heading: Main Section
Page number: 002
Byline / Author: By Rozanna Latiff

KUALA LUMPUR: YANG di-Pertuan Agong Tuanku Abdul Halim Mu'adzam Shah yesterday expressed his sympathies to the families of the passengers and crew of Malaysia Airlines flight MH370 which went missing en route from Kuala Lumpur to Beijing on Saturday.

The king said he and Raja Permaisuri Agong Tuanku Hajah Haminah Hamidun were deeply concerned by the disappearance of the aircraft.

"We hope that the family members of the passengers and crew will remain calm and strong in facing the situation," he said after opening the first meeting of the second session of the 13th Parliament.

Breaking with tradition, the opening ceremony was held indoor because of the haze, with the customary guard-of-honour mounted at the building's banquet hall instead of Parliament Square.

Upon their arrival at 10am, the royal couple were escorted by Dewan Rakyat Speaker Tan Sri Pandikar Amin Mulia and Dewan Negara president Tan Sri Abu Zahar Ujang to the hall where the king took the salute, with the guard-of-honour mounted by 103 personnel from the First Battalion of the Royal Malay Regiment.

Present were Prime Minister Datuk Seri Najib Razak and his wife Datin Seri Rosmah Mansor, Deputy Prime Minister Tan Sri Muhyiddin Yassin, ministers and diplomats.

In his opening address, Tuanku Abdul Halim reminded the people to uphold national solidarity and support the National Unity Consultative Council as part of the government's efforts to preserve harmony.

"We call on all parties to refrain from making any statement or action that might be deemed provocative or sensitive.

"Be mindful that when unity disintegrates, the country will head towards destruction."

He also urged religious authorities to deal with threats to the Islamic faith such as pluralism and deviant teachings in a manner consistent with the practice of Ahli Sunnah Wal Jamaah to prevent discord among Muslims.

"Stern action should be taken against irresponsible parties seeking to propagate thinking and action that will undermine the supremacy of the Federal Constitution."

Tuanku Abdul Halim said the government's efforts to consolidate its financial position and ensure long-term fiscal sustainability would involve broadening the tax base and improving tax administration.

He said this, among others, included the introduction of the Goods and Services Tax in April next year.

"We urge the government and honourable members (of parliament) to work together in helping people to understand the implementation and benefits of GST, which is not an additional form of tax, but a replacement of the existing Sales Tax and Service Tax."

The king also expressed his appreciation to security and defence forces as well as civilian agencies involved in the Eastern Sabah Security Command (Esscom) for their role in restoring peace in the state after last year's intrusion by armed intruders.

He also commended the Royal Malaysian Police for their efforts in reducing serious and organised crime through Op Cantas.

"Prosperity and progress will be meaningless if the country continues to face security threats.

"We call for efforts to curb crimes to be intensified through improvements in legislation and enhancement in enforcement efficiency."

The Dewan Rakyat will sit for 20 days until April 10, meeting four days in a week.

Walkout is irresponsible


Publication: NST
Date of publication: Mar 10, 2014
Section heading: Main Section
Page number: 019
Byline / Author: By Azwar Nazrin

THERE has been much heated debate about the pros and cons of the Goods and Services Tax (GST). In view of the first Parliament sitting for this year, those planning a walkout should debate maturely on the matter. Voice their views constructively and not play on trivial issues.

Planning a walkout is never a responsible thing to do, neither are personal attacks and childish name-calling.

Parliament sessions should never be about who gets the last say but to come up with resolutions that will inevitably make an impact. The mandate of a wakil rakyat is given by the people, therefore, in turn, he or she needs to see it through with determination and finesse.

He or she must, with other parliamentarians, achieve a consensus when Parliament is in session and agree on the best solution for the people and nation.

The GST Bill will be tabled at the first Parliament sitting, which begins today. As with all bills, there is a great divide in opinion. The opposition is quick to dismiss it though many have forgotten that it was also mooted during the 1993 Budget announcement by opposition leader Datuk Seri Anwar Ibrahim when he was finance minister. The change in opinion begs the question of the validity of the opposition's protest. Is GSTreally bad for the nation and its people? Or is it merely a political agenda?

If GST will help the country achieve its aim of becoming a developed country by 2020, why not? With many programmes and initiatives in place, we have been working hard towards elevating the status of Malaysia. To do so, tax is needed for development and progress. To this end, GST was suggested, and is said to be more transparent and efficient than the current Sales and Services Tax (SST).

Steven Wong, senior director of Strategic and International Studies (ISIS), had said that GST operates on a larger base and is, therefore, a more stable tax structure. It also provides more options than plunging oil taxes and royalties, and sliding corporate and personal income taxes.

Aside from internal benefits, it was reported that Fitch Ratings may revert Malaysia's rating to positive after the implementation of GST. This can only be advantageous to Malaysia. GST will also see exports being zero-rated to make our products more competitive in the international market.

Now, what of GST's effect on Malaysians?

Many have said there will be price increases. Many worry about sustaining their lifestyles. Opposition leaders have argued that GST will burden the rakyat, especially the lower-income group while advocates have said we may even see a price decrease for some products.

Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah indicated that people earning RM2,000 will only pay RM15 more from the consumption tax paid today under SST, while Deputy Finance Minister Datuk Ahmad Maslan noted a slight increase of 1.8 per cent in the Consumer Price Index.

GST is not a political chip for the government or opposition. Let's not resort to stunts during the Parliament session but to debate maturely with facts and figures to arrive at a solution that's best for the nation.

Azwar Nazrin, George Town, Penang

PM hurai pelan jadi negara maju (HL)


Publication: BH
Date of publication: Mar 8, 2014
Section heading: Main Section
Page number: 001
Byline / Author: Oleh Rohaniza Idris; Nazura Ngah; Ahmad Farizal Hajat; Shahrizan Salian

Kuala Lumpur: Datuk Seri Najib Razak semalam menggariskan perancangan kerajaan bagi merealisasikan status negara berpendapatan tinggi, termasuk melaksanakan pembaharuan subsidi, pengenalan cukai barang dan perkhidmatan (GST), memerangi rasuah dan menarik pelaburan asing.

Sambil menegaskan Malaysia berada pada landasan tepat untuk mencapai sasaran itu, Perdana Menteri berkata, pengukuhan ekonomi akan memastikan negara kekal pada kedudukan yang baik untuk menuju matlamat menjadi negara maju.

Perlu luaskan aliran pendapatan

Berucap pada Sidang Kemuncak Dialog Ekonomi Kebangsaan, Najib yang juga Menteri Kewangan, berkata jika rakyat mahukan ekonomi terus berkembang kukuh, negara bukan saja mesti mengurangkan perbelanjaan tidak produktif, malah perlu meluaskan aliran pendapatan untuk meningkatkan pelaburan pada masa depan.

"GST membolehkan kita meningkatkan perbelanjaan pembangunan...daripada memberi subsidi, kita boleh belanjakan lebih banyak wang untuk pelaburan produktif ke atas infrastruktur, sekolah dan penjagaan kesihatan," katanya.

Beliau berkata demikian ketika menyampaikan ucaptama bertajuk Memacu Ekonomi Malaysia: Meneliti Punca Utama pada sidang kemuncak anjuran Pertubuhan Berita Nasional Malaysia (BERNAMA) dan Institut Strategi dan Kepemimpinan Asia (ASLI) di sini.

Perdana Menteri berkata, keputusan Kabinet untuk meluluskan reformasi subsidi dilakukan hasil sokongan padu Perbendaharaan, Bank Negara serta Unit Perancang Ekonomi dan beliau tidak memandang ringan keputusan untuk mengurangkan subsidi atau memperkenalkan GST.

Menyedari rakyat merasai tekanan daripada peningkatan kos sara hidup, beliau mengambil pendekatan bercakap terus dengan rakyat menerusi sidang kemuncak berkenaan untuk menerangkan cabaran dihadapi negara dan tindakan kerajaan untuk menjadikan Malaysia lebih makmur dan kukuh.

Katanya, menerusi pelan strategik untuk memastikan kedudukan ekonomi yang baik, Najib berkata kemiskinan secara menyeluruhnya susut 97 peratus sejak 30 tahun lalu dan tiada lagi golongan miskin tegar.

MAS wajar tinjau penggabungan terus operasi


Publication: BH
Date of publication: Mar 8, 2014
Section heading: Bisnes
Page number: 001

Penerbangan Malaysia (MAS) perlu menimbang untuk bergabung dengan syarikat penerbangan antarabangsa lain bagi meneruskan kesinambungan operasi pada masa depan, kata bekas pengerusinya, Tan Sri Dr Munir Majid.

"MAS ialah sebuah syarikat bersaiz sederhana dalam industri penerbangan global yang menjadi semakin berdaya saing.

"Justeru, ia sewajarnya meninjau kepada penggabungan dalam menuju ke hadapan," katanya menjawab soalan peserta sesi perbincangan panel sempena Sidang Kemuncak dan Dialog Ekonomi Kebangsaan Bersama Perdana Menteri di Kuala Lumpur, semalam.

Enggan dedah nama

Munir, yang kini Pengerusi Bank Muamalat Malaysia Bhd dan Institut Penyelidikan CIMB ASEAN (CARI) berkata, tiga syarikat penerbangan berpotensi menjadi rakan perkongsian MAS sudah dikenal pasti bagi cadangan penggabungan berkenaan, namun beliau enggan mendedahkan namanya.

Mengulas lanjut, katanya, syarikat bersaiz sederhana biasanya enggan bergabung dengan syarikat bersaiz lebih besar kerana bimbang akan kehilangan kawalan ekuiti utama.

"Bagaimanapun, itulah keadaan yang perlu dihadapi syarikat sedemikian. Apabila syarikat penerbangan kecil bergabung dengan syarikat penerbangan lebih besar, mereka hanya akan memperoleh 35 peratus daripada keseluruhan syarikat.

"Mereka perlu menerimanya kerana itulah apa yang diperlukan dalam proses penggabungan," katanya.

Rasionalisasi subsidi

Mengenai isu kewangan, Munir yang juga tokoh ekonomi disegani berkata, keutamaan kerajaan untuk meletakkan kestabilan fiskal dalam landasan betul, akan membuahkan hasil menerusi langkah rasionalisasi subsidi serta pelaksanaan Cukai Barangan dan Perkhidmatan (GST) tahun depan.

Beliau berkata, negara ekonomi sedang berkembang seperti Brazil, Russia, India dan Mexico sepatutnya sudah menjadi kuasa ekonomi dunia ketika ini, namun kegagalannya menangani isu kewangan merencatkan perkembangan itu.

For a prosperous, strong Malaysia


Publication: NST
Date of publication: Mar 8, 2014
Section heading: Main Section
Page number: 014
Byline / Author: By Datuk Seri Najib Razak

OVER the past few months, Malaysia's economy has been a hot topic. Everyone is talking about subsidies, tolls, and taxes. Politicians and pundits are making various claims about why prices are rising or what should be done.

I understand that the rakyat feel the pressure from rising costs and, of course, businesses are facing rising costs as well. I understand that people see prices going up but do not see why. I understand that some people think we are doing too much, in terms of reform, too fast.

That is why I wanted to take this opportunity to speak through this platform to the rakyat. Today, I will explain the challenge facing our nation, why we as the government has to act and what we are doing to help. And I will show how we are building a stronger and more prosperous Malaysia.

Since independence, economic development has brought better jobs and brighter prospects for the Malaysian people. We are healthier, better educated and better off than ever before.

This has been achieved thanks to hard work by the rakyat, the entrepreneurial skills of the rakyat, commitment of the rakyat and careful planning and effective delivery by the government. Throughout history, the government has guided the nation's growth, with strategic plans to keep the economy on track.

This approach has been successful. Over the past 30 years, overall poverty has fallen 97 per cent. We have ended extreme poverty. Life expectancy has increased by seven years; average schooling has increased by five years. Since 1992, household income has tripled. We have made a real difference -- to the prospects for ordinary people, and to the lives of the poorest in our society.

But progress comes with a price. For decades, the government's subsidy bill has been rising. In 2010, we spent 15 per cent of our budget on subsidies and incentives. By 2012, that had reached 21.4 per cent, or RM44 billion. As market prices have increased, the cost of subsidies has risen exponentially. And many of these subsidies were blanket subsidies, which means everyone received them, including foreigners, businesses, and billionaires. And they are not equitable. For example, with petrol subsidies, the bigger the car, the more you benefit.

That meant money that could have been spent on productive investments, such as building more schools and training for the younger people, was being used to pay for cheaper fuel for tourists and expatriates. And the costs were adding up. In 2009, our budget deficit -- the gap between what we earned and what we spent -- was six per cent. The cost of subsidies was one of the factors driving up our deficit.

A budget deficit by itself is not always a bad thing. Malaysia has been in deficit since the late 1990s, and it has not stopped us from developing. And many successful developed countries have high debts.

But there are times when debt and deficit can become dangerous. As we know from the 1997 crisis, things can change very fast. If the global economy is not doing well, people will think twice about investing in nations whose deficits are too large. Even our local investments will be deterred. Markets that think if a country cannot pay its debts, they charge a much higher interest rate. Worse still, if sentiment turns against a country, it can trigger capital flight -- and in today's interconnected world, that can happen in the blink of an eye.

When that happens, the results can be devastating. In the recent financial crisis, some European countries had their credit ratings slashed. Borrowing costs soared, and debts spiralled out of control, scaring off foreign investors and putting currencies under pressure. And it was the people who suffered most.

They lost their jobs -- in some European countries, one in three people are unemployed. They lost their safety net, as governments were made to cut funding for public welfare and even pension for some countries. And they lost their independence, as they were forced to give up control over their economic destiny to the International Monetary Fund.

As the prime minister, my ultimate responsibility is 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. That is why this government has acted to keep our finances under control.

Four years ago, we began to reform subsidies, reducing payments for sugar and fuel. And we used the savings not only to reduce our deficit but also to open new 1Malaysia clinics and create more scholarships for students. By moving from blanket to targeted subsidies, we freed up money to spend on public health, education and infrastructure for both urban and rural areas that are very much needed. Even in Kelantan, they wanted a new highway.

However, the cost of subsidies kept rising and it became clear that Malaysia's economic position was becoming unsustainable. Investors, banks, and ratings agencies began focusing on Malaysia's debt, deficit -- and our subsidy bill. One rating agency in fact gave us an early warning, a precursor.

It is tempting to say "we don't need to worry about what some foreign analysts think. We should just focus on supporting the rakyat". But this misses a critical point.

Like other countries, we need investment to prosper. We need the market to have confidence in Malaysia. Foreign and domestic investments help Malaysian businesses to grow, create Malaysian jobs and develop Malaysia's economy. It helped build Kuala Lumpur's skyline, Iskandar's waterfront and Kuantan's industrial park. It helped build the railways and the highways that move us around the country. And, investments created hundreds of thousands of well-paid jobs, as international firms set up factories, offices and headquarters in Malaysia. Foreign and domestic investments are vital. We must ensure we keep Malaysia attractive for both.

Like other countries, we also borrow money to pay for things, like new roads or hospitals. We finance this spending by selling government bonds; a promise that we will pay in future.

And like other countries, we must act to strengthen our finances. Because investment and borrowing both depend on one thing: confidence. The people who invest in Malaysia, or buy our bonds, must have confidence that Malaysia is a country which can pay its bills.

That means showing that we can take the difficult decisions needed to bring debt and spending down and increase our income. And that is why, in September last year, we announced further steps to reform the subsidy programme, and introduce the Goods and Services Tax (GST) -- not all at once, but as part of a phased programme to strengthen our national finances.

The GST is a six per cent tax on goods and services which, contrary to what some say, will replace the existing sales and service tax -- not add to it.

Many goods and services will be covered under GST, but many will be exempt or zero-rated, including basic foods like rice, flour, and oil and essential services, like household water supplies and public transport. Out of 193 countries in the world, 160 have some form of GST or VAT (Value Added Tax). We need this new and more equitable tax, because only one in 10 Malaysians pays income tax. If our economy is to continue to grow strongly, we need to not only cut unproductive spending, but also to broaden our revenue stream, allowing us to invest in the future. GST will enable us to increase our development spending. Instead of subsidies, we will spend more money on productive investments -- on infrastructure, on schools, and on healthcare, even fighting crime which require money at the end of the day.

I did not take the decision to reduce subsidies or to introduce GST lightly. I thought long and hard about the risks and the possible impact on the rakyat. But I judged that we had to act to guarantee our future, security, independence and growth, which must be sustainable.

Malaysia is on a journey. The destination is clear: high-income 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.

When the Cabinet approved the subsidy reforms, we did so on the back of strong recommendations from the Treasury, Bank Negara and the Economic Planning Unit. And we did so with our eyes firmly on our destination.

Governing is about taking decisions which are 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.

In turbulent years, the government has kept our economy safe and strong. When I took office, the world was in the middle of a deep financial crisis. Many countries were on the brink of disaster. Yet our economy continued to grow. Since 2009, our gross domestic product (GDP) grew by an average of 5.7 per cent per year, and household income is 24 per cent higher.

The latest subsidy reforms have already been welcomed by investors and ratings agencies. Our budget deficit is falling: it is now 3.9 per cent lower than our own 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.

GDP was up 5.1 per cent in the last quarter -- more than expected. Retail sales, construction, trade, and exports are all rising. Last year saw record trade, the highest in our history -- and record private investment, which grows Malaysian businesses, including the small- and medium-sized companies that employ millions of Malaysians.

This growth and this investment brings better jobs and new opportunities. Behind the big numbers, things are getting better for Malaysian households, too. Average wages continue to rise: last year, salaries grew on average by six per cent, much more than inflation, which was 2.1 per cent.

For many Malaysians, things are getting better. But I know that it does not always feel that way. And I understand that talk of GDP growth and economic trends can seem irrelevant when households are trying to make ends meet. So, let me conclude by explaining what we are doing to help.

First, the government continues to help Malaysians with the cost of living. This year, we will spend more than RM40 billion on food, fuel and education subsidies, and on support for lower income households. But by switching from blanket subsidies to more targeted support, we are getting better value for money.

This year, increased BR1M (Bantuan Rakyat 1Malaysia) payments reached some seven million Malaysians, including for the first time those earning between RM3,000 and RM4,000 per month. BR1M is fair and progressive. It is given on the basis of need alone, and it is working: since the last payment, some 17,000 people's monthly income has increased, and they have moved out of the low-income bracket.

Over the next five years, we will increase BR1M to RM1,200 per year, to help cushion the blow of rising living costs. We are offering financial aid of up to RM30,000 for new low-cost houses built under the MyHome scheme, to help more Malaysians move into safe, modern homes. We have opened 1Malaysia shops to help with the cost of basic goods, and 1Malaysia clinics to make healthcare more affordable. And we have introduced a minimum wage to protect low earners and guarantee a basic standard of living.

We are also helping middle-income households, with a one per cent tax reduction, and a special RM2,000 tax exemption for those earning up to RM8,000 a month.

And we are working with employers to make sure they play their part. Malaysian workers take home around a third of our GDP as wages; in advanced economies, that figure is closer to half. The people and the government are investing in Malaysia's future. Companies must step up and make a contribution, too, by ensuring the pay gap between the executive boardroom and factory floor does not rise. But the gap can be reduced over time.

And as more Malaysians pursue higher education, we have begun a series of intensive projects to help graduates get their careers started. Over their lifetimes, graduates will likely earn more than non-graduates, but it can be difficult to match skills to needs especially the business sector. So, we are working on programmes such as Skim Latihan 1Malaysia and SAY 1Malaysia, to upskill our graduates and prepare them for entry to the workplace.

We are also focusing on making government more efficient. The Chief Secretary to the Government is acting on the 2012 Auditor-General's Report. It is wrong to say we have not acted on the report. We are cutting government electricity use by five per cent, cutting transport costs, and cutting the entertainment budgets for ministers. And we are improving overall efficiency through the government transformation programme.

We are also ramping up the fight against corruption. Corruption is an age-old problem, and combating it is one of my priorities. If we are to succeed as a nation in this endeavour, we must work together across the political divide to make corruption socially unacceptable. In government, for example, procurement is now basically through open tender and competitive bidding. Corruption must be dealt with at all levels -- not just the big fish, but also the low-level graft that affects people's daily lives.

Some claim that if we could somehow stop corruption completely -- overnight -- we would not need subsidy reform or the GST. But we must be honest. We cannot click our fingers and make corruption disappear in a day, a month, or a year. And so we must tackle corruption, reform subsidies, and introduce the GST to make the budget balanced.

Take Hong Kong. In the 1970s, it was plagued by corruption; today, it is one of the least corrupt cities in the world. But this success was won over decades. Yes, we must tackle corruption and yes, we must reform our finances. Unless we act on both fronts, our economy will weaken, and investors and lenders will think twice about investing in Malaysia.

We are also directly tackling rising prices. The measures we have taken are already starting to bear fruit. And we are keeping a close eye on markets for any attempts at price gouging. If we see prices rising by more than they should, we will not hesitate to step in and protect Malaysian consumers. The Malaysian Competition Commission will continue to protect the competition process for the benefit of businesses, consumers and the economy.

We are also preparing our workforce to thrive in new industries. The government's economic transformation programme is not just about numbers; it is about creating new kinds of jobs and preparing Malaysians to seize the new opportunities that will arise. Sixty years ago, people worked mainly in the fields. Thirty years ago, in factories. Today, many work in offices. We must be prepared for the next shift. The jobs of the future, the jobs that today do not exist -- the jobs our children will have -- need investment and skills.

Take the story of Kabilah Hussein, a seaweed farmer from Sabah. A few years ago, she was struggling to make enough money to survive. But by taking her business online, she now employs half her village, and sells to countries around the world. I want more people like Kabilah to be able to take advantage of new opportunities. That is what the economic transformation programme is all about.

I know people are worried about rising prices. We have always said that prices will rise when subsidy reform takes effect. But it is important to remember why.

If our debts and deficits were allowed to grow unchecked, Malaysia's economy would have been at risk, affecting the lives and incomes of millions. We have taken a calculated decision to act; because to do nothing would be irresponsible.

Since independence, we have achieved great things. But we cannot take success for granted. Economic conditions can change overnight; we must be prepared. We must make savings today, so that we are stronger tomorrow. And we should do so on our terms. As the Malay proverb says: sediakan payung sebelum hujan (save for a rainy day).

The subsidy reforms are part of a carefully formed and long-standing plan to make our economy fairer, stronger, more stable and sustainable. That means people will continue investing in Malaysian businesses and creating Malaysian jobs. It means Malaysia's extraordinary development will continue, with more opportunities for our children and a better standard of living for all. And the plan is working.

We are listening to people's concerns, and we will make adjustments to our policies when they are needed. Just like driving on the highway, if you find traffic in one lane, you shift gears and change lanes; but your destination remains the same.

Our destination remains the same. We are on the brink of developed nation status. If we commit, together, to building a stronger economy for Malaysia, the rewards will be great. By moving from blanket subsidies to targeted support, we are helping those who need it 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 in the future - of our families, our communities and our nation.

* This is Prime Minister Datuk Seri Najib Razak's keynote speech delivered at the National Economic Summit and Dialogue in Kuala Lumpur yesterday.

`My responsibility is to protect the people'


Publication: NST
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.

`Kita semakin hampir'


Publication: HM
Date of publication: Mar 8, 2014
Section heading: Main Section
Page number: 016
Byline / Author: Oleh Hairulazim Mahmud

Kuala Lumpur: Datuk Seri Najib Razak berkata, Malaysia berada pada jalan yang betul menuju status negara berpendapatan tinggi.

Perdana Menteri bagaimanapun berkata, seperti mana-mana perjalanan mungkin terdapat beberapa halangan dan penyesuaian perlu dilakukan bagi mengelakkan rintangan berkenaan, namun destinasinya kekal.

Dalam konteks ekonomi negara kata beliau, peralihan daripada subsidi menyeluruh kepada subsidi bersasar dapat membantu Malaysia kekal pada kedudukan untuk mencapai status negara maju.

"Destinasi kita tidak berubah. Kita semakin hampir merealisasikan status negara maju. Jika kita ada komitmen bersama-sama untuk membangunkan ekonomi yang kukuh untuk Malaysia, ganjarannya hebat.

"Dengan kewangan terkawal, kita melabur untuk masa depan - keluarga kita, masyarakat kita dan negara kita," katanya semasa menyampaikan ucaptama pada Sidang Kemuncak dan Dialog Ekonomi Kebangsaan anjuran bersama BERNAMA dan Institut Strategi dan Kepimpinan Asia (ASLI) di sini, semalam.

Turut hadir, isteri Perdana Menteri Datin Seri Rosmah Mansor dan Menteri Komunikasi dan Multimedia Datuk Seri Ahmad Shabery Cheek.

Najib berkata, bukan mudah untuk membuat keputusan mengurangkan subsidi dan memperkenalkan cukai barangan dan perkhidmatan (GST).

Untuk tahun ini katanya, kerajaan akan membelanjakan lebih RM40 bilion untuk subsidi makanan, bahan api dan pendidikan serta sokongan untuk isi rumah berpendapatan rendah berbanding RM44 bilion pada 2012.

Namun kata beliau, kerajaan perlu bertindak untuk menjamin keselamatan masa depan, kebebasan dan pertumbuhan negara.

Beliau mengaku terpaksa berfikir panjang dan mendalam mengenai risiko serta kesan yang mungkin menimpa rakyat berkaitan keputusan tidak popular itu.

"Saya tidak memandang ringan ketika mengambil keputusan untuk mengurangkan subsidi atau memperkenalkan GST. Namun saya memutuskan bahawa kerajaan perlu bertindak untuk menjamin keselamatan masa depan, kebebasan dan pertumbuhan negara," katanya.

Beliau berkata, pembaharuan subsidi disambut baik oleh pelabur dan agensi penarafan selain berjaya menurunkan defisit bajet pada 3.9 peratus, lebih rendah daripada yang disasarkan.

"Kita dalam perjalanan ke arah bajet seimbang pada 2020 dan walau apa pun yang diperkatakan oleh penganalisis politik, ekonomi Malaysia terus berkembang," katanya.

Katanya, Kabinet meluluskan pembaharuan subsidi hasil perbincangan mendalam antara Perbendaharaan, Bank Negara dan Unit Perancang Ekonomi (EPU).

Katanya lagi, kepimpinan adalah untuk membuat apa yang betul bukan apa yang mudah serta boleh menjejaskan pembangunan jika tersilap.

"Saya bersedia meletakkan kepentingan jangka panjang negara mengatasi populariti jangka pendek saya. Saya yakin pembaharuan ini akan berjaya, rekod ekonomi kita membuktikannya," katanya.