KUALA LUMPUR (Reuters) - Malaysia’s opposition urged the government on Monday to revise the 2009 budget, review spending on mega-projects and roll out plans to deal with the effects of global financial turmoil.
Opposition leader Anwar Ibrahim said falling crude oil and palm oil prices and slowing demand for manufactured exports could severely cut government revenues at a time when spending is rising faster than expected.
“Any responsible government will consider to at least introduce a revised budget,” Anwar said in his first speech in parliament since his convictions for sodomy and corruption in the late 1990s.
The government presented the budget in late August just as the global financial system was breaking down.
“My concern is they are still in the state of denial,” about the impact crisis is having on Malaysia, said the 61-year old former deputy prime minister and finance minister.
Malaysia’s budget deficit is set to hit 4.8 percent of gross domestic product this year versus a planned 3.1 percent due to higher than expected spending on fuel subsidies that have since been cut.
Lim Kit Siang, another veteran opposition politician, said the government’s failure to address shortcomings in the budget reflected its “sheer arrogance of power”.
The opposition’s move to question and possibly delay the budget raised further policy risks in Malaysia. The government needs to get the budget approved before the end of this year.
Anwar is also setting up a direct clash with Najib Razak — the current finance minister and successor to Prime Minister Abdullah Ahmad Badawi — who now stands in his way to take power.
The expansionary budget featured a number of populist steps following the government’s electoral debacle in polls last March, including tax cuts, higher pension payments, and billions of dollars to improve food security and rural infrastructure.
The government forecast for 2009 is for a budget deficit of 3.6 percent of GDP. But with economic growth expected to take a hit due to lower demand for Malaysia’s exports, Anwar said these forecasts were now obsolete. Leading Malaysian bank CIMB last week cut its growth forecast to 3 percent.
Anwar, who vowed to overthrow the government, has promised more foreigninvestment to revive the Southeast Asian economy, which lost some of its attractiveness as an investment destination to faster-growing regional rivals.
He insists he has won over enough defectors from the government to form a new administration. But an earlier self-imposed deadline of Sept. 16 passed and his calls to recall parliament for a confidence vote were denied.
Prime Minister Abdullah announced he will step down in March to quell growing discontent in his party following the unprecedented electoral losses against Anwar’s opposition coalition.
source:reuters
Opposition leader Anwar Ibrahim said falling crude oil and palm oil prices and slowing demand for manufactured exports could severely cut government revenues at a time when spending is rising faster than expected.
“Any responsible government will consider to at least introduce a revised budget,” Anwar said in his first speech in parliament since his convictions for sodomy and corruption in the late 1990s.
The government presented the budget in late August just as the global financial system was breaking down.
“My concern is they are still in the state of denial,” about the impact crisis is having on Malaysia, said the 61-year old former deputy prime minister and finance minister.
Malaysia’s budget deficit is set to hit 4.8 percent of gross domestic product this year versus a planned 3.1 percent due to higher than expected spending on fuel subsidies that have since been cut.
Lim Kit Siang, another veteran opposition politician, said the government’s failure to address shortcomings in the budget reflected its “sheer arrogance of power”.
The opposition’s move to question and possibly delay the budget raised further policy risks in Malaysia. The government needs to get the budget approved before the end of this year.
Anwar is also setting up a direct clash with Najib Razak — the current finance minister and successor to Prime Minister Abdullah Ahmad Badawi — who now stands in his way to take power.
The expansionary budget featured a number of populist steps following the government’s electoral debacle in polls last March, including tax cuts, higher pension payments, and billions of dollars to improve food security and rural infrastructure.
The government forecast for 2009 is for a budget deficit of 3.6 percent of GDP. But with economic growth expected to take a hit due to lower demand for Malaysia’s exports, Anwar said these forecasts were now obsolete. Leading Malaysian bank CIMB last week cut its growth forecast to 3 percent.
Anwar, who vowed to overthrow the government, has promised more foreigninvestment to revive the Southeast Asian economy, which lost some of its attractiveness as an investment destination to faster-growing regional rivals.
He insists he has won over enough defectors from the government to form a new administration. But an earlier self-imposed deadline of Sept. 16 passed and his calls to recall parliament for a confidence vote were denied.
Prime Minister Abdullah announced he will step down in March to quell growing discontent in his party following the unprecedented electoral losses against Anwar’s opposition coalition.
source:reuters
13/10/09
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