C4 wants budget-tracking mechanism in place

A watchdog NGO, The Centre to Combat Corruption and Cronyism (or C4), has called for a budgetary tracking and implementation system to be in place for the 2015 Budget to prevent abuse and leakages.

According to a statement by C4's Executive Director Cynthia Gabriel, the 2015 Budget completes "the Tenth Malaysia Plan, bringing with it the looming Goods and Services Taxes (GST) come April next year.

"The 11th Malaysia Plan will follow, leading to the last leap before 2020.

"What does this hold for the average Malaysian?" she asked.


The statement indicated that two days earlier, the government had issued ahead of time a long list of exemptions of basic goods from the GST.

"C4 shares the anxiety felt by the average citizen on the impending GST and the potentially burdensome impact it could create on the lower-middle-income group, said to be the category of persons that will be most affected by this new consumption-based taxation system.

"The long list of exemptions could be the clearest indication yet that the nation is not ready for the GST to be implemented, as espoused by several economists.

"Although prices of 532 items or 56% of the 944 goods and services in the Consumer Price index basket are expected to be reduced to 4.1% vs process of 354 items expected to go up by less than 5.8%, at most, the inflation rate is expected to project to a high of between 4% and 5% in 2015, a percentage considered high by Malaysian standards."

Cynthia pointed out that the projected reduction of prices had not been explained with a clear monitoring mechanism, so the figures given might not reflect the exact costs of living endured by people on the street.

"C4 is further concerned," she stressed, "that the implementation of the GST on April 1, 2015 and the ongoing simultaneous subsidy rationalisation programme (SRP) especially for fuel, will have the effect of a double whammy for the low- and middle-income populations."


C4 called for a detailed impact study be carried out on the GST implementation, on how wage structures can be reviewed and modified, including pumping up the annual wage growth, prior to the implementation.

It pointed out that the Bantuan Rakyat 1Malaysia Programme (BRIM) scheme should not be seen as a replacement of these much-needed structural reforms.

"Only when wages are upped and income levels brought to higher levels can taxation based on consumption be seen as the best way forward," said Cynthia.

The C4 statement also provided the following critical comments, details and recommendations:


Budget 2015 lists out quite a number of big-ticket infrastructure projects under the strategy for economic growth, as listed below.

Photo courtesy: Rakyat Times

C4 Recommends:

"Clear measures on open tenders and contracts awarded on merit and not based on political connections, together with prudent fiscal management of public funds spent over these huge infrastructure projects.

"This is of primary importance to make sure that Budget 2015 remains within its bracket estimates, and political patronage does not rule the day with cronies winning the handsome projects on bloated figures at the expense of the ordinary rakyat.

"It is recommended that a public service Ombudsman be created to monitor and track the progress of these big infra projects to monitor proper execution and implementation. Reports must be subject to public disclosure to Parliament.

"The citizens of Malaysia must be further engaged and consulted on projects that affect them directly, get feedback on the ground and channel it back to the Ombudsman office for further investigation.


"No moral, political or even religious justification can possibly justify the rakyat sharing the burden of fiscal consolidation and adjustment.

"This is especially so within the context of the endemic problem of corruption, wastage and leakage which was not given mention at all, in the Budget speech of the Prime Minister.

"Do we need to constantly remind the ruling regime that Malaysia is among the world's most corrupt countries, along with China, with the highest levels of bribery and corruption, according to the latest report, Asia-Pacific Fraud Survey Report Series 2013 by Ernst & Young.

"The survey polled 681 executives in China, Singapore, Australia, New Zealand, Indonesia, Vietnam, Malaysia and South Korea. About 39% of respondents said that bribery or corrupt practices happened widely in Malaysia, a figure that nearly doubles the Asia-Pacific average of 21%.

"How unfortunate that none of these was even worthy of mention in the PM's budget speech. So what gives, Malaysia?

"More of the same in 2015?"

C4 further asked what strategies there were in our fiscal consolidation and governance that would address the systemic problem of corruption and giving bribes in doing business in Malaysia?

The Centre stressed that Malaysians deserve a government that places good fiscal governance as a cornerstone of its administration.

CYNTHIA GABRIEL This statement is released By Cynthia Gabriel, Executive Director C4

Source: Rakyat Times

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