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KUALA LUMPUR: Former prime minister Najib Razak today cautioned the Pakatan Harapan (PH) government against formulating and announcing its 2019 Budget based on the Brent crude oil price of US$70.
Najib (BN-Pekan) said the previous Barisan Nasional (BN) government had tabled its budget for the year based on the crude oil price of US$52.
“I wish to remind the current government that the global crude oil price is too volatile. Whether it will go up or down, nobody can tell. This is because of geopolitical factors nobody can anticipate.
“The current situation is quite fragile, hence the government should not set its figures based on the pricing of US$70 a barrel,” he said when debating the mid-term review of the 11th Malaysia Plan in the Dewan Rakyat.
In the case of a drop in global crude oil price, he added, the country would be trapped. He cited geopolitical concerns such as the embargo on Iran and the attitude of the Organisation of the Petroleum Exporting Countries (Opec) led by Saudi Arabia, among others.
The government is expected to table the 2019 Budget on Nov 2.
Earlier in his debate, Najib, who is the former finance minister, voiced his conditional support for the mid-term review of the plan tabled by Prime Minister Dr Mahathir Mohamad last Thursday.
Najib said in principle, he was able to accept the review albeit with several conditions, as he believed he should be a constructive opposition member.
“If the proposals by PH are good, we will support. On the contrary, if we feel the suggestions are not suitable, have weaknesses and will bring harm to the rakyat, we will oppose them and come up with more constructive proposals.
“This is our way of doing things so that we are not accused of being an opposition which opposes for the sake of opposing, but are instead responsible opposition members,” he said.
On his reasons for voicing conditional support, Najib cited mid-term review documents which placed the country’s economic growth figures at 4.2% in 2016 and 5.9% last year.
He said not many were aware that in the last six years, between 2011 and 2017, the country’s growth rate had surpassed that of the four “tiger economies” in Asia, namely South Korea, Taiwan, Singapore and Hong Kong.
“If anyone says that our country is bankrupt and the people face hardships, this is refuted with the facts and the reality of the situation,” he said.
“The hardships faced by the people are not like the recession in 1985, or 1997-1998. And while the government had hopes to look after the rakyat by abolishing the goods and services tax (GST), the prices of goods have not gone down at all.”
He added that the six pillars stated in the mid-term review report were the efforts of the previous government which had not been able to achieve them as they were a work in progress.
“This document is a continuation of what BN started. It is not new. The pillars are all BN’s initiatives and cannot be achieved within a short period of time.
“Also, I recall that in 2010 and 2011 the government proposed a transparent political funding system, but this was rejected by the then-opposition. Back then, we wanted to keep records systematically.
“Today, there are new suggestions. But these were started by BN back then, although the opposition then rejected it.”
Najib said the report also confirmed that the debt-to-GDP ratio had decreased to 50.8%, or RM686 billion at the end of last year.
“Nowhere in the report does it say RM1 trillion. There is no such figure in the official PH document tabled in Parliament,” he added.
He said the debt servicing charges were at 12.6% of the country’s revenue, which is below the 15% level. He added that this was far lower than the 25-30% recorded in the early 1980s.
“This goes to show that the debt servicing under the BN administration went down,” he said.
Najib also asked how the government planned to services its debts if the projected economic growth was lower, as with a higher deficit, it was bound to borrow more which would cause the debt to rise.
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