Malaysia's success in dealing with the 1997-98 financial crisis had disappointed her critics, including "vested interest" politicians and the mass media, Prime Minister Dr Mahathir Mohamad said in his 2004 budget speech in the Dewan Rakyat today.

"While many others applauded us, politicians and the mass media with "vested interests" refuse to acknowledge our success," he said in his 92-page speech. He did not identify these groups.

Mahathir, who is also finance minister, arrived in the House at 4pm to unveil the budget. His speech lasted three hours.

Malaysians benefit

Some of the measures that he announced include reduction in Internet charges, additional tax relief for parents, no road tax for motorcycles of 150 cc and below, and half-month bonus for civil servants.

He said the government's ability to deal with the financial crisis is proven as the nation achieved a growth rate of 6.7 percent during the First Outline Perspective Plan 1971-1990 and 7.1 percent in the Second Outline Perspective Plan 1991-2000.

"Consequently, Malaysians from all walks of life have benefitted from the economic growth, with per capita income increasing from RM1,132 in 1970 to RM13,683 in 2002. Our purchasing power parity has also improved significantly from US$1,247 to US$8,862.

"At the same time, the incidence of poverty has declined substantially to 5.1 percent in 2002 from 52.4 percent of total households in 1970," Mahathir said.

The premier also took a dig at the opposition PAS - saying the government "sympathises with those in some states who remain trapped in poverty and sufferings in the midst of our prosperity".

"This is because the leaders whom they elected are incompetent and incapable of bringing development to the states. Even worse, they claimed poverty and sufferings are fated and should be accepted.

"They believe that it is so fated, if Islamic states are poor, backward and undeveloped," Mahathir said to applause of his fellow BN backbenchers and boos from the opposition MPs.

Terengganu and Kelantan are PAS-led states.

ISA being copied

Mahathir also said that Malaysia was an advanced and progressive Islamic nation and has become a model to many Islamic countries.

"They are impressed by our success in building a truly developed and prosperous Islamic nation. We have succeeded in undertaking the jihad in many aspects of development, particularly economic, social, religious and political and proven the capability of the Islamic community in this age."

Similarly, he said the use of the controversial Internal Security Act (ISA) is another success of the nation.

"Other countries have copied (the model of) our ISA," Mahathir told the House.

He also stressed that the controversial introduction of teaching Science and Mathematics in English is necessary to enable the people to voice the views effectively at international forums and become "a global player in the international arena".

Five key strategies were identified in the 2004 budget. Apart from the corporate and industrial activities, the budget also prominently covered a wide social agenda.

The public gallery was packed this afternoon as this is the last budget to be presented by the premier who has at the helm of the nation for 22 years. He retires next month.

He ended his budget speech titled "Building on success, investing for the future" with a poem.

Later at a press conference, Mahathir said the government aimed to have a balanced budget by 2006. This year's budget is the seventh straight deficit budget.