KUALA LUMPUR: The government is expected to save around RM500 million annually following its disbandment of four bodies as agencies, as announced by Prime Minister Tun Dr Mahathir Mohamad.
The four entities are the Land Public Transport Commission (SPAD), Special Affairs Department (JASA), National Council of Professors (MPN), and Federal Village Development and Security Committee (JKKP).
The disbandment, which involves around 3,000 staff, is expected to reduce the government’s management costs, especially involving wages and operational costs in the country’s annual expenditure.
From the total, JASA, which comes under the Communications and Multimedia Ministry, has 272 employees, with 127 of them contract workers.
SPAD, meanwhile, is estimated to have around 1,000 staff, while the JKKP have an estimated 1,677 people in three states - Kelantan, Penang and Selangor.
MPN, on the other hand, has around 2,500 professors and around 4,000 associate professors, who do not receive any financial incentives. The wages go to its secretariat of 30 and its top leadership.
Economic expert, Prof Dr Barjoyai Bardai, said the government can save around RM200 million annually on wages, and RM300 million a year on administrative costs.
He said the 10 per cent reduction in the salaries of Cabinet ministers and deputy ministers will save the government an expected RM3 million a year.
“Based on the 2018 Budget, around RM280 billion was allocated, with 60 per cent going towards management expenses.
“Savings from the disbandment of these entities can trim management expenditures by two per cent, thus raising development expenditure.
“Although the amount isn’t much, it is a positive step, and is an encouraging sign that the government is trying to save, with the Cabinet ministers leading the pack with their wage cuts,” he said.
Dr Mahathir yesterday announced the disbandment of JASA, MPN, SPAD and JKKP, after chairing the Pakatan Harapan government’s first Cabinet meeting.
Last November, Datuk Seri Dr Wan Azizah Wan Ismail, who was then opposition leader, had questioned why the JASA director had a maximum pay of RM20,592, while emoluments totaling RM12.8 million were paid out to 272 JASA staff.
Barjoyai said savings on wages may not be a priority of the government, given that Dr Mahathir had said that there will not be a trimming of the civil service but instead , transfers based on suitability.
“The dissolution of these institutions is not just to save management costs, but also reduces bureaucracy, duplication of duties and expediting the decision-making process,” he said.