The Alternative Budget

Just the important points on the just-revealed Pakatan Rakyat's Alternative Budget for the country. The source of this is from Malaysiakini

• Pakatan anticipates a decrease in government’s revenue by 11 percent to approximately RM157 billion as against the government’s projection of RM176 billion due to the drop in commodity prices as well as a decline in GDP.

• Suggestion for a 15.5 percent reduction in government’s operational expenditure to RM130 billion, as opposed to the government’s proposed amount of RM154 billion. In reducing operating expenditure, Pakatan assures it will however make no reduction in government salaries.

• Pakatan believes that a RM10 billion substantial savings is feasible simply by reducing corruption and mandating open-tenders for government procurement.

• Pakatan believes the budget deficit to be 3.0 percent, down from the estimated 3.6 percent for 2009, based on the revised calculation of revenue and allocation for expenditure.

• Education, public transportation, health and housing were chosen as the four areas to be benefit from substantial increases in development expenditure. The allocation for education to be increased from RM8.4 billion to RM11.8 billion in 2009, RM3 billion for housing development as opposed to the government’s RM1.4 billion and RM3.5 billion for improving security.

• Set up the Independent Police Complaints and Misconduct Commission (IPCMC) and re-allocate approximately 30 percent of the police officers from administrative departments to crime-fighting.

• The approved permits for imported vehicles are suggested to be auctioned to highest bidders in order to generate an estimated additional RM1.75 billion to government’s coffers.

• Renegotiation of “exploitative contracts” in toll concessionaires and the independent power producers for a lower cost of services to all Malaysians and savings for the government.

• A temporary reduction in employee contributions to the EPF from 11 percent to nine percent for a period of one year to increase disposable incomes. This would inject nearly RM2 billion of disposable income into the economy for domestic spending.

• Liberalising taxes and import duties on inputs used for the production of food, final goods and farming.

• The formation of a pricing mechanism which is more responsive to fluctuations in market price for crude oil.

• The enactment of a national competitiveness policy and take steps to reduce the “unfair market power” held by state-created monopolies”.

• To revitalise the SMEs sector, it is proposed that the tax rate for SMEs on their first RM500,000 chargeable income be reduced to 18 percent from the current 20 percent. A new partial tax exemption threshold is also proposed and to set at RM200,000 and taxed at 12 percent.

• A review for mega project costing more than RM1 billion to assess their socio-economic viability, affordability and intended impact on national development and employment.

• All government contracts to go through public tender. A saving of at least RM5 billion per annum is estimated to be achieved from this.