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28 May 2010

Kit Siang pans PM over downplaying subsidy warning


Lim Kit Siang today slammed Datuk Seri Najib Razak for making light of a minister’s warning that Malaysia could go bankrupt by 2019 unless it saved RM103 billion in the next five years.

Lim claimed that the prime minister had distanced himself from Minister in the Prime Minister’s Department Datuk Seri Idris Jala’s proposals that the government slash spending in outlined areas to increase the country’s per capita income.

“In less than 12 hours of Idris’ apocalyptic speech that Malaysia can go bankrupt by 2019 if the government fails to cut its burgeoning subsidy bills, the prime minister, Datuk Seri Najib Razak played down and distanced himself from Idris’ warning.

“Najib said after the Umno Supreme Council meeting last night that the figures quoted by Idris were merely based on Pemandu’s studies and there is no firm decision by the government.

“He said more studies were needed before subsidy cuts could be introduced,” said Lim in a statement today.

The DAP advisor claimed the PM’s response was “proof of the lack of political will of the Najib administration to address subsidy syndrome.”

Idris, who is CEO of the Performance Management and Delivery Unit (Pemandu), made a presentation yesterday on the country’s proposed five-year subsidy rationalisation roadmap.

According to Lim, Idris had failed to address the “root causes of the national economic crisis” and had merely dealt with its symptoms.

Lim echoed fellow DAP member Tony Pua’s concerns that the government had been unable to solve the problems of graft and mismanagement of money.

“Although Idris said the government would focus on big ticket items such as fuel, electricity and toll to achieve the savings, he failed to focus on the biggest ticket items — corruption, mismanagement, extravagance and lack and accountability.

“When corruption, mismanagement, extravagance and lack of accountability cost the government from RM10 billion to RM28 billion a year, what credibility has the government to talk about slashing subsidies affecting the rakyat when it has nothing to show to end the rampant and worsening state of corruption, the gross abuses of power and public funds like indiscriminate issue of APs and various forms of ‘piratisation’ in the name of privatisation?” said Lim.

He pointed out that the government had yet to provide an answer on whether government-linked conglomerate Sime Darby had incurred cost overruns for the Bakun Dam project amounting to RM1.7 billion, and that the government has agreed to reimburse around RM700 million to Sime Darby.

“The coincidence of the release of GLC conglomerate Sime Darby’s third quarter results, ending March 31, 2010, recording a net loss of RM309 million mainly due to its energy and utilities division; [there was] admission that for the nine months ended March 31, 2010, the total provision for four projects namely Qatar Petroleum project, the Maersk Oil Qatar project, the MOQ Marine project and Bakun dam amounted to RM1.3 billion.

“But no answer [were given] as to whether Sime Darby had incurred cost overruns for the Bakun contract amounting to RM1.7 billion and that the government has agreed to reimburse around RM700 million to Sime Darby, leaving the GLC with around RM1 billion [in losses] to deal with,” said Lim.

The Ipoh Timur MP said he was doubtful the government could convince Malaysians that it had the “political will” to slash subsidies when the country’s GLCs were riddled with billions of ringgit in losses.

The government had said that it will save RM103 billion over the next five years if it starts to cut subsidies now.

Idris had said yesterday that Malaysia had a whopping RM362 billion debt and must start reducing subsidies, which amounted to RM74 billion last year, to avoid becoming a bankrupt nation by 2019.

The minister outlined areas in which the government could slash its spending on in order to increase the country’s per capita income.

Areas which have been identified include fuel, food and infrastructure as well as tolls.


The biggest problem this country faces is not subsidies. The biggest problem that is leading this country to become like Zimbabwe is corruption and pillage by the rent seeking and greedy UMNOputras and their cronies. Clean up corruption and there will be no need for the removal of subsidies.

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