“Dear chief secretary, I’m afraid there is no money” – this was a genuine short note left by the Labour government to its successor after losing the UK elections back in 2010. Would this exact same scenario happen in Malaysia too should the BN government eventually lose power in the federal level?

During the final years of the Labour-led government back in 2010, the United Kingdom has experienced an uncontrolled and spiraling rise in its budget deficit and national debt. The UK’s net borrowing percentage of GDP recorded a whopping 11 percent deficit back in the financial year 2009-10, a record high for Great Britain in modern times. The Conservative government eventually took power, stopped the rot and are now right on track to rebalance the books.

Similarly, ever since the Malaysian Prime Minister Najib Abdul Razak took office as finance minister in 2009, Malaysia has also experienced an exponential increase in national debts. According to latest figures, the Malaysian national debt has doubled from RM318 billion (US$78 billion) back in 2008, to a colossal RM664 billion (US$163 billion) in 2015.

The national debt now accounts to 53.2 percent of the country’s GDP, and by adding on unaccounted hidden debts and contingency liabilities, this figure could potentially increase up to 70 percent.

To make matters worse, recent large scale scandals such as the missing RM42 billion from 1MDB and the alleged RM2.6 billion donation to the Malaysian prime minister’s accounts further deteriorates Malaysia’s financial health and performance.

Therefore, even in an event where the opposition manages to win power in Putrajaya, the Malaysian public should carefully manage their expectations and not expect things to turn good instantly, simply because there will be no money left.

Of course the point above might sound like an exaggeration as Malaysia is a country blessed with an abundance of natural resources, but no one could deny that the country has lost most of its potential and precious time to make the transformation into a high income and developed nation.

It will be down to the next opposition-led government to clean up the mess and stop Malaysia from sliding down this slippery slope. Hence, what are the short-term measures that can be taken once the opposition wins power at the federal level?

Firstly, in my opinion, instead of going straight into prosperity policies such as more subsidies and welfare, I believe that the next opposition-led government should first spend a higher proportion of its resources to pay off and reduce the existing debt burden. By reducing the national debt at a faster pace, the amount of interest paid annually to service the debt will be reduced.

Taking examples from the United Kingdom and Malaysia once again, the UK has to pay around £46 billion (RM295 billion) of interests annually to service its £1.5 trillion (RM9.6 trillion) national debt at present day. Equivalently, Malaysia too has to pay around RM25 billion of interests per year for the repayment of its national debt.

Savings from annual interests

Now idealise the scenario where both countries, Malaysia and the United Kingdom has a small amount of national debt. Imagine how much more of extra development can be done from the savings of these staggering sum of annual interests (RM25 billion and £46 billion per year)? Bear in mind that RM25 billion accounts for around 3.8 percent of the total expenditure of a typical federal level budget.

To put it into a different context, assuming that the construction of one new Light Rail Transit (LRT) line costs around RM7 billion, this amount of money is sufficient to finance three new LRT lines in Kuala Lumpur every year!

British Chancellor George Osborne recently proposed a Budget Surplus Law, a new legislation to be passed in the Westminster Parliament this autumn. This new Budget Surplus Law binds future UK governments to ‘fix the roof when the sun is shining’, meaning that federal level budgets has to achieve surpluses every year under normal economic conditions in order to pay down the national debt.

Likewise, this case study is strongly applicable to Malaysia, where legislation can be passed in Parliament to cap future expenditures at a defined maximum level. Instead of jumping straight out of austerity, future Malaysian governments should manage subsidies and the welfare bill carefully.

For example, the now defunct Pakatan Rakyat opposition once proposed to regulate and abolish highway tolls completely in its Orange Book (Buku Jingga) prior to the 13th general election. This is obviously good news for Malaysians, but based on current economic and financial conditions, I believe that this policy has to be tweaked and modified slightly.

Looking at figures on the 2010 yearly report by Plus, the North-South Expressway gained a net profit of RM2.5 billion simply by collecting tolls, whereas highway maintenance only costs around RM240 million.

Instead of abolishing toll rates completely, I would propose halving toll rates by 50 percent first in the short term. Deducting the expenses from highway maintenance, the highway will still be able to generate a profit of RM1 billion per year at an absolute minimum.

Subsequently, this net profit can then be pumped directly to our public transportation systems around the nation, desperately in need for improvements. By reducing toll rates gradually rather than abolishing it instantly, not only the financial burden of ordinary Malaysians can still be eased, but the government also has more funds to manoeuvre and make appropriate developments. Isn’t this a smoother and more optimal option for future governments to pursue?

Never follow the footsteps of Greece

It is easy to introduce more welfare into our national policies, but the high political costs makes it extremely difficult to abolish it as a consequence. Thus, Malaysia should never follow the footsteps of Greece and other welfare-heavy European countries, where money is borrowed irresponsibly and unsustainably just to preserve the welfare system.

Malaysia should live within our own means and be financially self-sustainable, only providing the proportion of welfare that will not be detrimental to the financial health and development of the country.

A sustainable government is one that borrows money responsibly, and not overburden the next generation with debts for political popularity and instant gratification. It will be an uphill task for the opposition to provide more welfare to ordinary Malaysians, as well as cleaning up the mess left by the BN government at the same time.

Malaysians have suffered a long way and deserves better, but again the welfare bill and national debt has to be carefully managed. With the BN government having so much more skeletons in the closet yet to be disclosed, Malaysians can only pray that the situation is still not too bad, and also hope that a note of having no money left will not appear on the desk of Putrajaya when the opposition eventually comes to power.

ROGER TEOH is a member of the Democratic Action Party, and recently completed his undergraduate studies in Civil Engineering at The University of Manchester.