Undercovering Malaysian Budget

The Malaysian budget deficit has grown sharply over the years and has ballooned to an amount of ~RM400bil. A deficit is a situation known as in layman terms is borrowed money (and now owe) in order to spend more than your income. DEBT! The issue with Malaysia is that the deficit is not used for development expenditures but for burgeoning operating expenses.

In 2003, we spend RM75bil on operating expenditure vs RM40bil on net development expenditure. ~50% ratio.

In 2008, we spend RM150bil on operating expenditure vs RM42bil on net development expenditure. ~28% ratio.

We spend most of taxpayer's money on a few things by order:

• Subsidies: We subsidized almost everything; from oil, flour, sugar and etc.
• Emoluments: Salaries of civil workforce which is still growing. 10% of workforce is in civil services.
• Supplies/Services: For civil departments.
• Education: Around RM8k per student head (we have 6mil students) BUT why still got brain drain?
• Defence: Hur? Are we going to war with Singapore?

What has helped us to keep our budget deficit from overblowing is that Petronas is continually being squeezed dry, leaving themselves little for reinvestment.

In 2003, payments to federal govt is RM30bil. ~43% left for reinvestment.

In 2008, payments to federal govt is RM70bil. ~21% left for reinvestment.

Other oil majors around the world reinvest as much as 50% to 80%.

What happens when oil runs out in Malaysia? Oil is a depleting resource. It is gone once it gets pump out of the soil unlike timber, palm oil or rubber that can be replenished.

Some people fathom the fact that economics is a difficult subject, only befitting those who has expertise on it. Eyes bengkak (bruise) looking at charts and table BUT luckily this author Teh Chi-Chang has done most of the work for us via his book The Budget: How the Government is spending OUR money. I strongly recommend and urge you to read this book as a citizen or taxpayer in our nation. You can borrow the book from me, 1st come 1st serve basis OR even better, buy it and spread the love.

"The book addresses the fundamental questions of budget formulation, its components, sources of deficit, transparency, and the political economy of government expenditure in Malaysia in simple language backed with solid statistics."

Professor Rajah Rasiah

Dean, Faculty of Economics and Administration

University of Malaya

What can you do? Ever heard that power lies in the people not the government OR that the government should be afraid of the people not the other way around? Voting exist for the sole reason of not giving full authoritarian rule to the government, if not we would have been Africa holding AK-47s. Register yourself to vote and make a difference.

One vote nia ma what difference? If 100,000 people think like you how many votes are that? Think about that.

The second thing you can do is ask people to read my blog haha. I do blog for people who are willing to read & to re-educate themselves. Also so I don't have to keep repeating myself :-)