Parti Sosialis Malaysia today rejected the budget 2002 unveiled by the government last week as the economic planning failed to address the root causes of the plight of the working class.

Contrary to what the government has intended to achieve, two main budgetary measures in giving bonus and pay increment to civil servants will not fully benefit ordinary people as the issue of income disparity was not properly addressed, said PSM pro-tem president Dr D Jeyakumar.

"The bonus and pay increment dished out to civil servants will of course benefit them. But they only make less than 10 percent of the working population," he said in a statement.

Jeyakumar said there are currently 9.5 million workers in Malaysia, a majority of whom are non-government employees.

He added 5.5 million of them are ordinary workers in factories, estates, construction industry and others while 1.1 million are fishermen, padi farmers and Felda settlers.

Last Friday, Prime Minister Dr Mahathir Mohamad in his budget presentation said there would be a bonus of half-month salary or a minimum of RM1,000, and a 10 percent increment to some 850,000 civil servants.

In addition, the premier who is also finance minister, announced a one to two percent cut in income tax rates for next year, apart from various other measures to promote public spending in order to offset the impact of a much-feared global recession.

In response to this, Jeyakumar said the government did not take into account that only those who earn more than RM1,500 a month will have to pay income tax, and therefore, less than 20 percent of Malaysian workers are paying it.

"This cut benefits only the richest 20 percent of workers who are already paying taxes. But everyone will be affected by the hike in petrol price and any inflation to come," he said.

"In what way, are the lower income groups, who are neither civil servants nor tax payers, helped by the budget?" he questioned.

Despite a cut of import duty on various products including motorcycles, the government has announced a hike in petrol price by 10 sen effective Oct 20.

Checks and balances

Jeyakumar also expressed his disappointment that the government did not put in place greater mechanism of checks and balances to ensure that public funds will not be "siphoned off" to safeguard private interests which are connected to the establishment.

He suggested that the government adopts several concrete measures to truly benefit all the ordinary workers in various sectors, among others, setting up a retrenchment fund to protect workers who lose their jobs when their companies go bankrupt.

"Very often workers of firms claiming bankruptcy do not receive any retrenchment payment. Such a fund will provide them and their families with breathing space before they find another job," he said.

According to the economic report released recently, the number of retrenched workers increased by 37 percent during the first seven months of this year to 20,038, of which 85.7 percent were locals from the electronics and semiconductor industry.

Jeyakumar said the government should also set up a fund for workers who face problems servicing their housing loans during times of recession.

Consequently, many of the workers end up having their houses under "the auctioneer's gavel", he added.

"But the workers do not expect hand-outs, they will be prepared to re-pay their debts to the government once they are financially on their feet again," said Jeyakumar.