Though the government has promised to reduce next year’s budget deficit to 5.6 percent from this year’s 7.4 percent, Opposition Leader Anwar Ibrahim says there is nothing to be excited about.

Although the budget deficit projected is smaller than anticipated, Anwar said the deficit will continue to increase due to additional budgets, stimulus packages and off-budget expenditure which will be implemented throughout 2010.

NONE In his Budget 2010 policy debate, the Permatang Pauh MP also said the government has been presenting positive budget deficit projections despite both petroleum and commodity prices skyrocketing for the past 13 years.

"As a result, the national debt increased to 18.3 percent from RM306.4 billion in 2008 to RM362.5 billion in 2009.

"The debt also increased by 49.7 percent from RM242.2 billion since 2006. At the same time, the percentage of debt to the GDP increased by 41.5 percent in 2008 to 52.4 percent in 2009," said Anwar ( above ).

The economy seemed to deteriorate, he said, despite the government without fail announcing various measures and provisions to compete against countries with high value economies such as Singapore and South Korea.

"Unfortunately, statistics show there is continuous deterioration of income that directly affects our deficit problem," said Anwar.

Short-term government policy

Among the reasons that contributed to this matter, he added, is when the government gives priority to the development of public infrastructure but ignores the needs of social and technical infrastructure.

Last Friday, Prime Minister Najib Abdul Razak unveiled Budget 2010 with total expenditure allocated at RM191.5 billion, which is 11.2 percent less that what was allocated last year (RM215.7 billion).

The government's income meanwhile has shrunk 8.4 percent to RM148.4 billion (RM162.1 billion in 2009).

azlan Describing Budget 2010 as a ‘short-term’ policy, Anwar said whatever had been tabled in Parliament last Friday would be forgotten until a new budget is presented next year.

In his arguments, Anwar told the House that the prime minister had introduced a reduction in individual income tax rate from 27 percent to 26 percent to ensure the tax ‘remains competitive’.

"Besides that, the government has also raised the tax relief from RM8000 to RM9000, relief in the Internet fees, purchase of computers and an increase Employees’ Provident Funds (EPF) contributions.

"Roughly, the people enjoy welfare provisions in the form of tax exemptions and relief only in the range of RM500 million," he added.

Credit card charge

But this move could not be justified as the government had at the same time proposed to charge credit card holders RM50 and supplementary credit card holders RM25.

"With this, it is estimated that government income from card fees will be more than RM400 million that the people will have to fork out from their pockets.

"And this does not include real property gains tax by five percent, which was reintroduced.

"Revenue from card fees and real property gains tax is far more than the quantum of welfare distributed to the people through tax cuts and exemptions," said Anwar.