The federal government is being “overly optimistic” in its projections for next year’s revenue, DAP MP Tony Pua said today.
Pua pointed out that Putrajaya had already failed to meet its targeted revenue collection of RM225.7 billion for 2016, with the revised collection of RM212.6 billion based on the latest estimates, amounting to a RM13.1 billion shortfall.
“To put things into perspective, and to highlight the severity of situation, more often than not in the past, the government will collect more than they projected,” the Petaling Jaya Utara MP said in a statement.
“Budget 2017 proved that the government is not only running out of cash, but the situation will only deteriorate further, making 2017 possibly one of the worst years for ordinary Malaysians,” the DAP national publicity chief added.
In the Budget 2017 tabled today by Prime Minister Datuk Seri Najib Razak, the government expects to collect RM219.7 billion for 2017 and spend RM260.8 billion the same year, with the budget deficit to go down slightly to 3 per cent to the GDP.
But Pua said the government was giving an “optimistic projection” on the income it will get from various taxes, despite its tax collection falling in the past year.
“Despite a significant drop in the estimated Petroleum Income Tax (PITA) from RM11.6 billion in 2015 to RM8.5 billion in 2016, the government is assuming higher oil prices and demand for 2017 to collect RM10.6 billion,” he said.
The government also projected RM69.2 billion in 2017 from higher Corporate Income Tax (CITA) collections, despite the collection for 2016 dropping marginally to RM63.2 billion from RM63.7 billion in 2015, he noted.
“Similarly, despite a declining trend of Goods and Services Tax (GST) collection in the recent quarters, the government is still projecting an increase in collections of GST from RM38.5 billion in 2016 to RM40 billion in 2017,” he said.
“All the above goes to prove that the government is running out of cash very quickly and is struggling to balance its revenue and expenses,” he added.
Pua claimed that past excesses by the government have severely limited its ability to make allocations for its current expenditure, listing down various excesses such as the increase of hiring for the now 1.6 million-strong civil service to cut graduate unemployment, “excessive borrowings to finance inefficiency, corruption and wastages”.
Among other things, Pua highlighted that the government increased the civil service’s wage allocation under the “emolument” category by RM3.8 billion to RM73.9 billion in 2016 although it cut RM8 billion in operating expenses, and is expecting to spend at least RM3.6 billion more for 2017.
The government’s allocation for pension contributions or “retirement charges” for the civil service is also expected to go up from RM19 billion in 2016 to RM21.8 billion in 2017, he said.
At the same time, Pua noted that the subsidies and social assistance have steadily dropped from RM39.7 billion in 2014 to RM27.3 billion (2015), and to an estimated RM24.6 billion (2016) and RM22.4 billion next year, while adding that the government will have less money available to spend on items such as medicine supplies, housing, scholarships for the public.
“Hence when the overly optimistic projections in government revenue collection fail to materialise, we can expect 2017 to be a very painful year for ordinary Malaysians,” he said.
Source : The Malay Mail Online