Harapan releases first 100 days fiscal reforms

  • May 8, 2018
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GE14 | Pakatan Harapan has released its plan for fiscal reforms in its first 100 days in office should it form the next federal government after tomorrow's polls.

In order to achieve greater fiscal responsibility, Harapan, in a statement, asserted that it will undertake a complete evaluation of the commitments and liabilities over government revenue, assets and income.

The statement, signed by Harapan chairperson Dr Mahathir Mohamad, president Dr Wan Azizah Wan Ismail and deputy presidents Muhyiddin Yassin, Lim Guan Eng and Mohamad Sabu, said the coalition was mindful of the "dire state" of the current caretaker government's fiscal situation.

These reforms, it said, sought to improve the country's investment climate, reduce costs of living and business, raise national competitiveness and improve the overall economy.

Furthermore, the coalition claims that several respected Malaysians were already on board to be part of the endeavour, among them: "(an) experienced captains of industry, a former president of Petronas, a successful Hong Kong-based tycoon, respected former senior civil servants and economists."

Below is the statement in full:

Pakatan Harapan First 100 Days Fiscal Reforms

1. Pakatan Harapan is fully committed to undertake responsible and progressive fiscal reforms, to be implemented in an orderly, transparent and systematic manner to enhance fiscal equity, transparency and accountability, and support accelerated productive investments and economic growth.

2. Pakatan Harapan is mindful of the dire state of the (caretaker) federal government’s fiscal situation and will undertake an evaluation of the responsibilities, commitments, expenditures and liabilities in relation to its revenue, assets and income of the government in the first 100 days of its administration in order to achieve greater fiscal responsibility.

3. Subsequent reforms will seek to ensure fiscal conduct that is more sustainable, inclusive and growth-enhancing. This will, in turn, seek to improve the investment climate, reduce the cost of living and doing business, raise national competitiveness and promote greater economic prosperity.

4. The first 100 days evaluation will focus on three key areas: (1) federal government budget and finances; (2) accrual accounting and asset-liability management; (3) outstanding government debt obligations, including government guaranteed debt, especially foreign obligations.

5. The review of federal government budget and finances will cover both expenditure and revenue.

Expenditure:

i. Review all major public projects, especially those financed outside of the development budget, and related contingent liabilities.

ii. Review incurred future debt-related operating expenditure commitments.

iii. Reprioritise publicly funded projects responsibly.

iv. Shift expenditure allocations to prioritise general wellbeing, including social protection for the disadvantaged.

iv. Ensure government procurement by open tender.

Revenue:

i. Assess the entire revenue base of the federal government to improve its breadth, responsiveness and progressiveness.

ii. Improve accountability of state-owned enterprises and other public assets to enhance efficiency, accountability and revenue contribution.

Deficit and Liabilities:

i. Reduce borrowing and restructure liabilities to ensure greater fiscal sustainability.

ii. Fully account for federal government liabilities – both direct and contingent liabilities incurred via government guarantees.

6. Inter-governmental (federal-state-local) fiscal relations

i. Restructure federal-state-local government relations to more equitably share revenues and costs of providing public infrastructure and services. In this regard, special consideration will be given in the spirit of the constitutional commitments made in the 1963 Malaysia Agreement to Sabah and Sarawak.

7. Accrual accounting and asset-liability management

i. Adopt accrual accounting to better take stock of federal government’s assets and improve the asset-liability management framework that would identify mismatches and risk.

8. Sovereign risk and capital market management

i. Evaluate and consider better market instruments to manage liquidity and price sovereign risks more effectively. The treasury function of the Federal Treasury will be enhanced and the pricing of government-guaranteed liability improved.

9. Respected, eminent, patriotic Malaysians will be invited to contribute in undertaking these reforms. Some have already agreed to be part of this endeavour, including experienced captains of industry, a former President of Petronas, a successful Hong Kong-based tycoon, respected former senior civil servants and economists. They will provide guidance for the formulation and execution of the reform plan.

10. Malaysia is blessed with a hard-working and talented workforce, good infrastructure and abundant resources. Irresponsible fiscal policy conduct since 2009, and steady erosion of the quality of our institutions have set the country back. The time for progressive change, not a witch hunt or retribution, is long overdue.

11. We will come up with a comprehensive reform plan at the end of the first 100 days which will put us back on a path of sustained prosperity for all Malaysians.

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