Magazine of Socialist Action in Australia

Malaysia: 2006 Budget – Workers bear the brunt

Reading Time: 5 minutes

‘The burden of adjustment will, however need to be shared between the Government and the people’ Datuk Seri Abdullah Ahmad Badawi , Prime Minister of Malaysia.
Report from Parti Sosialis Malaysia website

This seems to be the basic underlying strategy of Budget 2006 presented by the Prime Minister on 30th of September 2005. This is nothing new as the people are always told to share the burden during the hard times whereby during good times, the people are completely forgotten while a few make the fortunes.

Let?s analyze the budget to see how the money is being spent to and whether the allocation done is going to improve the quality of life of the people as a whole.

Budget 2006 is a 3.5% deficit budget , and this year the budget is supposedly more generous compared to previous years. Generous to whom?

Civil servants are getting 1 month and 1.5 months bonus, increase in allowances and also will be getting Cost of Living Allowance starting from January 2006. This move will benefit the 1 million civil servants. But what about the balance 9 million workforce in which 25% are earning less than RM 1000 and 60% are earning less than RM 2000? What about these workers? Don?t they have school going children , increased expenditure due to the oil price increase and need to have a good quality of life ? Why are there no perks for them? The least the government can do is to put in place a Minimum Wage Act to ensure that the workers receive a decent income and yearly bonus plus protective measures to protect the workers. But nope, nothing of that sort is even mentioned in the budget. There is not even any social security incentives to protect the workers who might be retrenched in the wake of the world economic situation that is moving towards a crisis situation.

The only thing the government is interested to manufacture is high performing good workers so that it can benefir the employers- the capitalists. High performing workers increase productivity and this will lead to increase in profits. The employers will enjoy all the profits as the workers struggle to make ends meet. This is further helped with draconian laws to control the trade unions.

There is even no tax relief or tax cuts that will actually benefit the tax payers as a whole. With the rising prices and increase in cost of living, income tax is maintained. So the middle income group also has no benefits from this budget.

However, the main benefiting group of the 2006 Budget is the Business Sector who control the wealth of the country. Tax exemptions , tax incentives for mergers, increased capital for Small and Medium Sized Enterprises, streamlining tax treatments for pioneer status companies, extension of application period for incentives for certain sectors and the setting up of the Yayasan Amanah Hartanah Bumiputera is seen as a move to make the environment in Malaysia more business and investor friendly. So the Badawi Government seems to have reasonable well to make the capitalist class happy, protected and taken care off. No wonder, most TV shows featuring the Business elite seem to praise the budget.

In the mean time some small handouts have been given to the hard core poor in the form of welfare payments for orphans, hardcore poor families and also some allocation to improve the basic facilities in the rural areas such as electricity, water, bridges and roads. After 48 years of independence and with structures like the Twin Towers, Putrajaya and Kuala Lumpur International Airport, there are still areas in Malaysia with no electricity, water and proper roads and bridges. Recently a school teacher fell to his death as the wood gave way in his school.

There is also nothing much to shout about on the allocation for the health sector as health tourism is focused which will not benefit the local people but only the tourists who come here to get cheap treatment. Of course there is allocation for the building and upgrading clinics and upgrading hospital laboratories and equipments. But how effective this is going to be and how much is going to be allocated for the upgrading of hospital and its equipments is for us to wait and see.

For the housing for the poor, a total of 21,600 units of low cost housing is being targeted to be built in the coming year with an allocation of 1 billion. Even this we are not sure will happen or not as the government?s previous track records have shown only a 40% fulfillments of the yearly target. With more people being evicted of their houses there is a need for more housing for the poor. So, definitely the current target of 21,600 units will not be able to fulfill the demand for low-cost housing in the present situation.

Agriculture sector has also been given a big boost in this budget. Notably the plantation sector has been asked to diversify to increase competitiveness and productivity in order to become a dynamic sector . However the Prime Minister conveniently forgot about the plight of the plantation workers who are continuously living in poverty for the past 4 generations. Nothing was mentioned about improving the living standards of the plantation community in this so called people?s budget.

All these are supposedly the contribution of the government to make our lives better. In turn we have to bear increasing petrol prices even though we are an oil producing country which exports expensive and high quality oil and imports cheap and low quality oil for local consumption. Other than that, we have to accept increase in electric tariffs, increase in cost of living and yes be prudent in spending and share the burden of the government.

During the budget speech also the Prime Minister reminded the people to conserve energy and do not use it wastefully. But then actions should come from the leadership to set an example of conservation. When you go to Putrajaya at night, you can see how much electricity is being wasted by lighting up the whole area. Maybe the government should consider saving money and energy by conserving energy there and put the money for better use. Then advise the people.

So, overall, Budget 2006 is a let down for the majority of Malaysian, who are factory workers, plantation workers, general workers, urban settlers, orang asli and the layman in the streets. It only benefits the rich and the business and capitalist class.

Thus, the call of the Prime Minister for the people to join hands with the Government to make adjustments and sacrifices during these hard times is really not logic. Nothing has been given to the workers and the people in general to make their life better. All the budget is going to do is make the cost of living increase, emphasis on businesses and make the rich richer and the poor poorer.

Increased allocation in education and roads and bridges are not going to help the poor to break free from the vicious cycle of poverty and have a better life style. The basic root problems of wages, incentives and better social protection have not been addressed and facilities for the people such as better health services, more government run higher learning institutions, and ensuring lower cost of living has not been clearly mentioned.

This shows, the so called People?s Budget is not a budget for the people. Thus asking the people who are struggling to make ends meet to sacrifice and make adjustments to their life is like asking the poor man who is eating rice 3 times a day to eat only once a day.

Enough of this capitalist economy which only looks after the interest of the capitalists class. The working class has been continously neglected. We have to mobilize for change a permanent change in order to see the real people?s budget.

Long live the People?s Power


JERIT Secretariat


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