Pakatan’s Manifesto Will Increase Fiscal Deficit, Says Husni
Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah had issued a frank warning to Malaysian voters about the unsustainable economic policies that Pakatan Rakyat put forward recently in its election manifesto for GE13.
He described Pakatan's manifesto as based on "fantasy" and "rhetoric" which appears to give little thought to Malaysia's growth trajectory, and worse, would increase the country's fiscal deficit from four per cent to 11.5 per cent of Malaysia's Gross Domestic Product (GDP).
Malaysia's debt would also suffer, he said, rising by at least 10 per cent of GDP. This is particularly ironic given that Pakatan has criticised Malaysia's currently manageable and decreasing debt of 53 per cent.
Yet the Opposition avoids comparing it to the ballooning debt of many other nations, like Japan at 211 per cent, Singapore at 118 per cent, Germany at 81 per cent and the United States at 67 per cent.
"The fiscal deficit will be more serious, the government will be saddled with a heavy current account balance," Ahmad Husni added.
"The (Pakatan) government would suffer from a current account deficit, and would not be able to cover the administrative budget."
Ahmad Husni was reiterating figures published last month by the Economist Intelligence Unit, which stated it was "clearly not feasible" for Pakatan to implement its campaign promises.
"For example, providing free secondary education would cost the government RM43 billion, while abolishing car duty would cut tax revenue by RM4.6 billion a year," it said.
And with foreign investment in Malaysia falling as it has done under DAP in Penang – dropping by as much as 73 per cent since 2010 – there would be no way to balance the books.
Whichever way you look, this would result in a sharp economic decline and a failure to meet the 2020 targets announced by Prime Minister Datuk Seri Najib Razak.
In an interview with Reuters this week, Najib said that Malaysia was at a crossroads that would dictate success or failure for the next five years.
"A weak government means instability and uncertainty and a country can ill afford that kind of scenario given the external economic situation that's going to be between weak and rather uncertain," he said.
Reuters responded by making it clear that BN, helped by last year's impressive 5.6 per cent economic growth, was likely to triumph at GE13, ensuring a prosperous run-up to 2020.