Vote according to your Conscience: Reject the 2016 Budget
Honourable Tan Sri Speaker,
I am grateful for the opportunity to debate the 2016 Budget.
2 I urge the Honourable Members of this August House especially those on the right of this hall, to vote according to your conscience and reject the 2016 Budget.
3 Firstly, it is uncertain the Honourable Member from Pekan retains the confidence of the majority of the Dewan Rakyat. It is a fundamental principle of the Westminster parliamentary democratic system and an express requirement of our Constitution that the Prime Minister must retain the confidence of the majority in the Dewan Rakyat. The Motion of No Confidence submitted by the Honourable Member from Petaling Jaya Selatan is buried at the bottom of the Order Paper, item 27 out of 30 items. It will not see day light. The Honourable Speaker suggests the Opposition Leader inform him of the Barisan Nasional MPs who support the Motion of No Confidence she submitted before he decides to table the Motion. This is not the practice of a 1st World Parliament. It is not even done in a 3rd World Parliament or any parliamentary democracy.
4 The textbook Erskine May on “Parliamentary Practice” states that a Motion of No Confidence must be debated immediately and takes priority over other motions. The Speaker is to take action immediately upon receiving such a motion because it is a motion submitted by the potentially next government. The Speaker is to inform the Government of the day and the Government of the day has to decide on the date for the debate without delay. Failure to do so is an admission that the prime minister has lost the confidence of the House. It will be an illegitimate Government. An illegitimate Government has no moral authority to collect one ringgit of tax from the citizens nor to spend one ringgit of the taxpayers’ money.
5 Secondly, there is a crisis of confidence in the leadership of the Honourable Member from Pekan. The 1st Cause is the Honourable Member from Pekan used his powers as Prime Minister to interfere with criminal investigations against him. This is a corrupt practice under section 23 of the Malaysian Anti-Corruption Commission Act. The Honourable Member from Sungai Petani has in his speech provided the details and events on the sacking of the Deputy Prime Minister and other Ministers who dare to ask questions on 1MDB, the removal of the Attorney-General, disbanding of the Special Task Force, transfer of the MACC directors, Special Branch directors and the police investigating the MACC officers. The PAC could not carry on with its investigation of 1MDB after the Prime Minister appointed 4 PAC members to the Cabinet. The special strategic communications director, the Member from Kota Belud and Minister of Urban Wellbeing, Housing and Local Government said that the Prime Minister had to “take out people” after an alleged charge sheet against the Prime Minister emerged.
6 The 2nd Cause is the lack of a full and frank disclosure on the state of Government finances. The Government has not provided a full disclosure of the RM42 billion loans owed by 1MDB, a wholly-owned company by the Ministry of Finance and the RM2.6 billion in the Prime Minister’s private account. The Prime Minister should have given immediately a full and complete explanation when the Wall Street Journal published the article in July. The people also waited in vain for him to give his explanation in his 2016 Budget speech. His prolonged and protracted silence only leads to the inference that there is everything to hide. This has led to the declining confidence in his leadership.
7 The Prime Minister also did not include in this Budget, information on two further matters which affects the confidence and trust of the people in the Government. This lack of openness in the Budget process leads to loss of faith and confidence in the Government’s management of the people’s money and the economy. The Government use off-budget mechanisms to finance government projects. The PAC in its report on Pembinaan PFI Sdn Bhd found that PFI was used to raise RM27 billion to finance projects and activities. Although the projects were identified as part of the 10th Malaysia Plan, the expenditure funded by PFI was not tabled to Parliament. PAC found the PFI programme to be an off-budget government loan. The off-budget expenditure created doubts as to the integrity of the figures produced in the budget, they did not reflect the real financial standing of the Government, its contingent liabilities, deficit calculation and level of government debt. The actual deficit and government debt would be higher if the PFI debt is taken into account. PAC in its report made recommendations for the provisions, expenses and debts of PFI to be tabled for approval by Parliament. PAC further recommend that all forms of off-budget expenditures should also be reported to Parliament. Unfortunately, the 2016 Budget has not complied with these recommendations.
8 The Government did not provide full disclosure of the amount of guarantees, letters of comfort and other forms of expression of financial support given for loans taken by statutory bodies and government-linked companies. Irrespective of whether it is a guarantee, letter of comfort or other form of letter of support, the Government in the end has to pay if the GLC defaults. There have been too many cases of this nature in the past. The Government lost RM3 billion for Pewaja, RM12 billion for PKFZ, RM20 billion in the several restructuring exercises of MAS and now the potential liability of RM42 billion for 1MDB. It is shocking to see in Attachment 6 to the Federal Government Financial Statement of 2014 that the total amount of government guarantees to statutory bodies and GLCs is RM850 billion (RM850,035,142,802.34). This will be substantially more once letters of comfort and other forms of letters of support are given to show the total amount of the Government’s contingent liabilities. This will far exceed the 55% GDP limit placed on Government debt. It makes a mockery of the members of parliament to debate late into the night for the payment of RM500 bonus to government servants while the executive commits the Government to billions in debt for GLC without the approval or knowledge of parliament.
9 The 3rd Cause is the abuse and breaking down of our nation’s institutions. The independence of the Judiciary was destroyed in the 1980’s by the then prime minister. What little hope of the judiciary’s redemption was shattered by the Court’s convicting opposition leader, Dato Seri Anwar Ibrahim. International jurists have remarked that he should not have been convicted. Recently the Court of Appeal delivered a decision that the Peaceful Assembly Act does not contravene the Constitution. This contradicts the decision of an earlier but different panel of the Court of Appeal, leading to uncertainty in the law. The former prime minister, Tun Ahmad Badawi sought to correct this wrong by enacting the Judicial Commission Act. This has been set back by the recent revelation that the Judicial Appointments Commission’s recommendation for the elevation of Justice Mohd Hishamuddin Mohd Yunus to the Federal Court in 2013 was rejected by the Prime Minister. The most cable and respected judge was passed over many times. Another example of the breaking down of our institutions is Bank Negara Malaysia. The integrity of Bank Negara Malaysia, an internationally respected institution has been irreparably damaged. Questions remained unanswered, how BNM allowed RM2.6 billion to be transferred into the Prime Minister’s private bank account. There appears to be a lack of oversight by BNM. Now it appears by the Attorney-General’s rejection of BNM’s recommendation to charge 1MDB that BNM is also incompetent and cannot even carry out a proper investigation to enforce its exchange control regulations.
10 The 4th Cause, is that Government responded to the 1 MDB revelation by investigations, arrests and detention of opposition politicians, activists, students, academicians, banning of newspapers and blogs and race-based mobilization. This has raised concerns of security and stability.
11. All these four causes have combined to affect the confidence of both local and foreign investors. MIDF Equities reported on 3 August 2015 that an estimated outflow of RM11.7 billion surpassing the RM6.9 billion outflow in the whole of 2014. It has led to the plunging value of the Ringgit which is described as due to “sentiments.” Fitch Ratings and economists have also described the Government’s 2016 estimated revenue to be “optimistic.” The use of these words is a polite form of euphemism for loss of confidence. Subsidies for petrol, sugar, cooking oil and rice have been removed. BR1M does not provide full relief for the rising costs of living and burden of GST. Price increases mean consumers are more careful in spending, which in turns leads to an economic slowdown as the domestic market lacks stimulation. It means that the Malaysian business will be negatively affected. The Malaysian Employers’ Federation (MEF) reported in July that 10,000 people have been retrenched due to the declining value of the ringgit, escalating prices and economic slowdown and more will no doubt follow.
12 The revenue estimates for the 2016 Budget is indeed “optimistic” based on an 8.9% growth on company income tax and 44% increase in GST and not realistic when GDP growth is only expected to be 4-5%. Any hope that private consumption will help to sustain growth needs to overcome several challenges. The high level of household debt which is more than 80% of GDP will act as a dampener on private consumption and domestic demand. Stagnant wages are likely to weaken demand. The problem of high household debt and stagnant wages are due to structural problems. Real wages in manufacturing and the service sector have not increased significantly. This has contributed to a brain drain of Malaysians of all ethnicities. Wages are held down by the high importation of cheap low-skilled foreign labour. The lack of political will and inadequate resources for investment on improving skills of the workforce, limited development of English-proficiency, problem solving and creative thinking and lack of other soft skills have led to the declining standards and productivity of the Malaysian workforce. The proposed increase of minimum wages from RM900 to RM1,000 and from RM800 to RM900 in Sabah and Sarawak will not resolve the problems without a holistic, strategic and sustained combined effort of the Government and the industries. There is none in this Budget.
13 The temporary cash payments in the form of BR1M have no meaningful contributions to reduce household debt or to adequately cover the rising cost of living and inflation. The increase in toll rates, removal of rice subsidy will more than take back the increase in BR1M payments. The executive director of MIER, Zakariah Abdul Rashid has described BR1M as “helicopter raining money.” It is a populist move with no positive impact on productivity and without any “multiplier effect.” What is needed is a sustainable social safety net to address the current economic difficulties faced by the middle and lower income groups. This is not found in the 2016 Budget.
14 I therefore ask the Members of this August House to vote against the 2016 Budget according to your conscience. You cannot in good conscience allow the needs of one man to prevail over the needs of thirty million. Allow one man to keep his job while thousands will lose theirs. I know party discipline require you to vote on party lines. My respected colleagues on the right side of this August House, you have until now turned a blind eye to the destruction of our constitutional safeguards, institutions and democracy. You have closed your minds to the truth. You have dutifully acted as a rubber stamp to wastage and excesses.
15 Today I ask you to open your eyes and open your minds. Open your eyes and look at the Merdeka Centre report- only 23% support this Government. Malay support has sunk to 31%. Open your mind and accept the significance of the unprecedented case of the Rulers Conference issuing a statement for the 1MDB investigations to be carried out, completed and those involved punished. Remember your oath to faithfully discharge your duties when you were elected as a member of parliament. Your duty is to exercise reason and good judgment in the best interest of the nation. You duty is to act according to the clearest conviction of your judgment and conscience. It is not to obey blindly, vote according to dictation and act for the best interest of one individual.
16 Those of you constrained to vote against your conscience, to vote against your heart and mind, to vote for the Budget and to retain the Honourable Member from Pekan, know when our economy lies in ruins, when heads of families are without jobs, when people are unable to make ends meet, know the people have - in their hands the power to vote. The people will vote against corruption, vote against abuse, vote against oppression, the people will vote you out of power.
17 For these reasons, I reject the 2016 Budget. Thank you.
William Leong Jee Keen
2 November 2015
2 November 2015