KUALA LUMPUR: The main thrust of the Pakatan Harapan’s Alternative 2018 Budget which was revealed today sees it proposing to abolish the goods and services tax (GST).
In addition it is also seeking to increase the petroleum royalty rate in several states to 20 per cent.
The pact in its proposed budget seeks to spend a sum of RM258.52 billion. A breakdown of these monies will see RM200.16 billion allocated for operating expenditure and the remainder RM58.35 billion for developments.
Parliamentary Opposition leader Datuk Seri Dr Wan Azizah Wan Ismail expressed confidence that the pact can afford to eliminate GST.
She denied that eliminating GST as being a populist act.
Based on the Pakatan Harapan's Alternative 2018 Budget which was revealed at Parliament House today, it also seeks to abolish the GST by reducing expenditure and trimming budgets of some ministries, particularly the Prime Minister's Department (PMD).
The proposed budget states that it will more than halve the PMD's budget from RM20.8 billion to RM8.40 billion.
It seeks to do this by taking a leaf from the measure taken by former premier Tun Dr Mahathir Mohamad's allocation of PMD during his tenure in 2003.
"During the last year of Dr Mahathir's administration in 2003, the PMD worked on a budget of RM5 billion. Using a 'time value of money' calculation with an average CPI of 3.5 per cent, Dr Mahathir's budget today would RM8.40 billion," read the alternative budget.
The proposal in the Alternative budget includes:
1. Eliminating GST
The sum collected by the government from GST is RM42 billion and when it's abolished, Pakatan Harapan will only collect 16.50 billion as consumption tax. This would mean a net loss of RM25.50 billion.
However the opposition explained that without GST, the "consumer consumption and business activity bill boom, the people will purchase more goods including imported goods and the consumption of big-ticket items, namely properties and cars will recover".
2. 1Malaysia People's Aid (BR1M)
Pakatan Harapan said it will maintain the Barisan Nasional's (BN) initiatives of giving out BR1M but on the condition to "increase the productivity and self-worth of BR1M recipients".
Instead of making BR1M a direct handout, Pakatan Harapan said it will distribute certain BR1M payments conditional on the recipient being employed and staying employed for at least three months.
"We may also require that any BR1M application received is used for specific social and family purposes. For example is a family received RM1,200 the head of the family cannot be allowed to use this money on frivolous and unhealthy foods such as cigarettes and alcohol."
The alternative budget however did not mention how they can ensure the BR1M money would not be used to buy cigarettes and alcohol, except for saying that it may work closely with authorised grocers and hypermarkets, utility companies and bookstores.
Previously, opposition leaders were known to be anti-BR1M as they had strongly opposed to the aid.
3. Petroleum royalty
The opposition pact also promised to increase the Petroleum royalty rate in Kelantan, Terengganu, Sabah and Sarawak to 20 per cent from the current 5 per cent.
"However we are mindful that we also have to ensure that the fiscal budget and Petronas are not irreparably damaged by such an arrangement," read the budget.
It however did not elaborate further on how it can ensure increasing the 20 per cent oil royalty would not affect the fiscal budget and Petronas.
4. Free education
Pakatan Harapan had also promised free public education for all, saying that to achieve this, it will immediately conduct a full audit and study cost, wastage and corruption factors in all public universities.
"Pakatan Harapan will place greater emphasis on Technical and Vocational Al Education and Training (TVET).
"Pakatan Harapan will expand the German Dual Vocational Training (GDVT) programmed launc
hed by the Penang state government in 2015 to the national level."
5. National Higher Education Fund (PTPTN)
Pakatan Harapan also stated that it will restructure the PTPTN loans by making repayment on an income-contingent basis.
"Fresh graduates earning under RM4,000 a month will not have to service the interest due on their loans.
"Repayment of their loan sums will only begin once their salaries exceed RM4,000 a month."