UPDATED with Anwar's response
KUALA LUMPUR, Aug 29 — The government announced today wide-ranging aid for the poor and higher development spending in its 2009 budget aimed at shoring up its popularity amid spiralling inflation and political weakness.
Prime Minister Datuk Seri Abdullah Ahmad Badawi, whose administration has been shaken by an election debacle and slowing economic growth this year, also used his annual budget speech in Parliament to mount a scathing attack on the revitalised opposition led by Datuk Seri Anwar Ibrahim.
Anwar, who was sworn in as a lawmaker yesterday after winning a by-election, wants to unseat Abdullah by Sept 16 through parliamentary defections. Anwar's opposition alliance won an unprecedented 82 of Parliament's 222 seats in March general elections – 30 short of a majority.
Abdullah warned that efforts by certain parties to destabilise the country by attempting to seize power through illegitimate means and without the mandate of the people must be rejected.
“I will not allow disturbances to continue. I will not permit the mandate given by the people to be seized” from the ruling party, he said.
In a clear reference to Anwar's pledge to cut retail gasoline prices if he seizes power, Abdullah blasted his “populist claims”.
If implemented, they “would undermine the government's financial position and bequeath a bankrupt nation to the next generation”, Abdullah said.
Anwar, however, shot back at Abdullah's accusation of "opportunistic threats of seizing the people's mandate through undemocratic means".
"He still has the audacity to preach about democracy. Look at his media policy, corruption, judiciary. A no-confidence vote is a normal process and is the decision of the MPs," Anwar said.
The newly appointed opposition leader said when Abdullah talked of "mandates, he sounded like a dictator. What snatching? It is the will of the people and their representatives. He himself wanted to snatch Permatang Pauh."
He defended his claims that petrol prices could be lowered to RM2, saying that Abdullah "has not read my economic agenda and knowing him, I don't think he will. I think he does not realise that it can be done without affecting our revenue."
The former deputy prime minister, who seeks to take over the federal government on Sept 16, called the continuous deficit budgets an exception among oil-producing countries and said the lack of competitiveness in our country would not attract foreign direct investment.
Abdullah also announced a raft of public-friendly measures such as extending welfare aid to some 110,000 poor households, raising the threshold for taxable incomes to exempt 100,000 workers and handing higher pensions and bonuses to civil servants equivalent to a month's salary.
Other goodies included large allocations to upgrade electricity, water and rural road facilities in two eastern states on Borneo island where government lawmakers are rumoured to be considering defections to the opposition.
The Finance Ministry said in a report released separately that development expenditure is projected to rise to RM51.7 billion in 2009, up 11.8 percent from RM46.3 billion this year.
Development spending – a quarter of the RM208 billion budget – includes poverty reduction programmes, educational training, health care and housing projects.
The Finance Ministry's report said Malaysia's economy is expected to expand by 5.7 percent this year and 5.4 percent in 2009, slowing from 6.3 percent growth in 2007.
The fiscal deficit was forecast to widen to 4.8 percent of gross domestic product in 2008 and 3.6 percent next year after achieving a low of 3.2 percent in 2007.
Fuel subsidies to keep the retail price of gasoline affordable are expected to soar by 142 percent on year to RM18.1 billion this year, the ministry's report said.
Inflation spiked to 8.5 percent in July, the highest level in decades, after the government hiked gasoline prices by 41 percent in June to slash the runaway subsidy bill. Officials rolled back gasoline prices 5.6 percent last week and said further cuts are likely to quell anger. — AP
Show/Hide comments
Show/Hide comment form
Indeed the competitiveness of Malaysia remains an issue. The PM has lost his credibility not entirely on his own doing. It is the acts of the likes of Puspakom which are being uncovered now which brough BN's downfall. The people were angry due to their disposable income declining due to global inflation. To add insult to injury, they have to pay bribes for fundamental services. The PM didn't break the camel's back, the grassroot corruption did. Crackdown on that and the BN might just swing marginal voters back to their side.
In response to S Abdullah, I do not think the budget policies are PR policies. It is simply a situation where a two party system is being played out. BN cannot afford to be complacent because of the stronger opposition.