Govt blows their annual budget! Its only June!!

From Malaysiakini

The federal government's attempt to secure a RM13 billion supplementary budget only shows that it is not prepared to tighten its belt when it expects the public to do so.

In a statement today, DAP secretary-general Lim Guan Eng said this request is unfair as the public has been made to bear the burden of subsidy cuts for sugar, fuel and electricity tariff.

“Fishermen and consumers are asking why there is no improvement in government finances when they have to pay more now for diesel, sugar and other basic commodities.

“Has the government not said that subsidy cuts are necessary to cut down expenditure that (it) can no longer afford?”

Yesterday, the government tabled the Supplementary Supply Bill in the Dewan Rakyat for an additional RM13 billion to cover operating expenses for the first half of this year. If passed, it will raise the Budget 2011 estimate to RM176 billion.

Of the funds sought, RM6 billion will be for the Finance Ministry to pay an estimated RM5.6 billion in subsidy claims for petroleum products; RM150 million for electricity bill exemptions for usage below RM20 monthly; and RM100 million for skills training programmes nationwide.

A total of RM1.5 billion is allocated to the Education Ministry and another RM1 billion to the Health Ministry. An extra RM11.3 million is also required to finance maintenance work at Parliament House.

'Worst of both worlds'

Lim, also the Bagan MP and Penang chief minister, argued that the supplementary budget was sought without first addressing factors that bleed the coffers, such as the RM19 billion gas subsidies from Petronas to independent power producers (IPPs).

“Up to end of 2010, Petronas had extended about RM 131.3 billion in gas subsidies to both the power and non-power sectors.

“The greatest beneficiaries of the gas subsidies are IPPs who also benefit from a guaranteed buyer through the compulsory Power Purchase Agreement signed with TNB.”

Lim said Malaysia is currently experiencing the “worst of both worlds” because the government is contributing to inflationary pressures and failing to improve on efficiency and competitiveness at the same time.

“The only losers are 27 million ordinary consumers who are not IPPs. Perhaps the BN needs a strong reminder whether it is the IPPs or ordinary Malaysians that determine the direction and destiny of the country,” he concluded.