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news without borders
by Husna Yusop
newsdesk@thesundaily.com
KUALA LUMPUR: Finance Minister Datuk Seri Najib
Abdul Razak yesterday announced in the Dewan
Rakyat a stimulus package worth RM7 billion, the
result of savings in the government’s fuel subsidy
brought on by plummeting world crude prices.
In a winding-up speech on the debate on 2009
Budget, which was frequently disrupted by the
opposition members who later staged a walk-out,
Najib said the stimulus package will reinforce
the economy, strengthen national resilience and
maintain economic growth momentum to face the
increasingly challenging global economic climate.
Najib, who is also deputy prime minister, said
the government will pursue an expansionary policy
instead of the “contractionary” proposals by the
Opposition, adding that the measures proposed will
have a multiplier effect on the economy, aside from
taking care of the people’s welfare.
He said the RM7 billion saved will be channelled
into 15 projects.
This is how the money will be spent:
» RM1.2 billion to build 25,000 units of low-and
medium-cost houses
» RM500 million to upgrade, repair and maintain
police stations, living quarters, army camps and
quarters
» RM600 million on minor projects under the public
and basic infrastructure project maintenance pro-
gramme. These include maintaining village roads,
building community halls and small bridges. This
would help small-time contractors address the
problem of shortage of construction projects
» RM500 million to repair and maintain public facili-
ties such as roads, schools and hospitals
» RM500 million to build and upgrade roads in rural
areas, villages and agriculture roads, including in
Sabah and Sarawak
» RM200 million to government-aided religious
schools, mission schools, Chinese and Tamil schools
(shared equally)
» RM300 million to start a fund to run skills train-
ing programmes, with focus on tourism, health,
construction and business process outsourcing
sectors.
» RM500 million to bolster the public transport
system (LRT, Komuter and city bus systems)
» RM1.5 billion to set up an Investment Fund to
attract more private sector investments in strategic
sectors, like solar panels, aerospace industry, and
aeroplane components
» RM400 million to move the High Speed Broadband
Project
» RM200 million to fund programmes by private
training institutions, with participation of all races
» RM100 million for youth programmes at various
RM7b to stimulate the economy
SHARIL AMIN/THESUN
Najib speaking to the
press after announcing
the stimulus package.
levels and involving all races
» RM200 million to revive abandoned housing
projects in strategic areas
» RM100 million to increase number of business
premises in selected small towns
» RM200 million on early educational programmes
for children aged one to six years.
A project management unit will be set up to
monitor the implementation of these projects, he
said.
Najib’s speech was a unique situation in that
the budget was tabled by Prime Minister Datuk
Seri Abdullah Ahmad Badawi but wound up by him,
due to their portfolio switch, as a result of a power
transition plan.
Earlier, Najib said the government had revised its
projected gross domestic product (GDP) growth for
2009 from 5.4% to 3.5%, in view of the global eco-
nomic situation that would have an impact on the
Malaysian economy.
He said the budget deficit is projected to rise to
4.8% from 3.6% earlier and that estimated revenues
are expected to go down from RM176.22 billion
to RM168.73 billion. He said the inflation rate is
expected to be around 3-4%.
During his speech, the Opposition kept interrupt-
ing him causing Speaker Tan Sr Pandikar Amin Mulia
to order Batu MP Tian Chua to leave for ignoring
his instructions. This caused the Opposition MPs to
stage a walkout.
Other measures and initiatives announced by
Najib were:
» Employees can reduce EPF contributions by 3%
on a voluntary basis for up to two years starting
from Jan 1.
This measure can place RM4.8 billion in the hands
of consumers if all EPF contributors opt for it.
» Abolishing the 5% import duties on seven types
of fertilisers. The fertiliser manufacturing industry
has also agreed to cut down fertiliser prices by at
least 15% immediately.
» Abolishing import duties on cement and long
iron and steel products, and the scrapping of Ap-
proved Permits for the latter;
» Allowing hypermarkets to close late (weekdays
11pm; weekends 1am);
» Beginning February, biodiesel will be used as
fuel, starting with government vehicles, followed
by the industrial and transport sectors. It is es-
timated that 500,000 tonnes of palm oil a year
is needed when it is fully implemented in early
2010, he said.
» Plan to generate extra revenue and kickstart
local economic activities by making full use of
government land in strategic locations like the
Lembaga Getah Malaysia land at Sungai Buloh and
government land in Jalan Cochrane and in Jalan
Ampang Hilir, Kuala Lumpur.
» To widen the Social Security Net to improve
spending power of the poor and low income
earners, the income eligibility for monthly welfare
aid raised from RM400 to RM720 in Peninsular,
RM830 in Sarawak and RM960 in Sabah. This
will widen the net to cover 110,000 people from
55,000 now.
» Higher car loan ceiling for government serv-
ants in several categories, and the permission for
Opposition walkout an
irresponsible act: Najib
by Giam Say Khoon
newsdesk@thesundaily.com
KUALA LUMPUR: Deputy Prime Minister Datuk Seri
Najib Abdul Razak described the walkout by the
Opposition in the parliament during his wrap-up for
the Finance Ministry as an irresponsible act.
Speaking to reporters after winding up 2009
Budget yesterday, Najib said what he presented
in his wrap-up are additional measures that are
very important for the nation’s future and the
well-being of the people.
“As a responsible Opposition, they should have
remained in the House. I had promised that they
would be given the chance to ask questions. I did
not deny them (their rights), I was just exercising
my rights to finish all presentation before opening
up for questions,” he said.
Opposition members had claimed Najib did
not give them opportunities to interject to get
clarifications.
Najib said he intended to give a clear picture
to those who were confused about the additional
measures, and they could ask for explanation later.
“Since they were so impatient, it is up to them
(to walk out) as it is easier for me. The people must
realise the Opposition had neglected its responsibil-
ity as a constructive Opposition,” he said.
Najib explained that the additional measures
were not a new budget as the operating expen-
ditures remained unchanged and there were only
some amendments as a result of the RM7 billion
saving from fuel subsidy.
Asked whether the government can still get the
RM7 billion saving if the crude oil price increases
next year, Najib said: “We are expecting the crude
oil price (to remain) at US$70 per barrel.
“We will still get it (the RM7 billion saving) with
some adjustments in terms of government deficit
but we will manage that by trying to ensure that it
does not go beyond 4.8% and it also means some
flexibility by postponing some projects,” he said.
Najib rebutted the allegation by Opposition
Leader Datuk Seri Anwar Ibrahim that he was lying
about the Opposition’s proposed budget which he
described as “a contractionary budget”.
“I did not lie as I have the figures of the
operating budget proposed by the Opposition
– RM130.345 billion compared with BN govern-
ment’s budget of RM154.137 billion.
“There is a difference of RM24 billion. How can
he accuse me of lying when I have the figures?”
On speculation that his earlier announcement
of an injection of RM5 billion into ValueCap Sdn
Bhd was meant to bail out the company from its
RM5.1 billion bond debt due February, Najib said
the shareholders are happy with the company’s
theSun | WEDNESDAY NOVEMBER 5 2008
government servants to buy houses on secondary
market where strata titles not given yet
» All civil servants can opt to extend housing
mortgage repayment period to 30 years instead
of 25. Earlier, the government only allowed new
borrowers to do so.
Najib said the 2009 Budget took into account
and projected the challenging global scenario for
next year.
Nevertheless, sudden changes in the global
economic scene of late have warranted the gov-
ernment to take proactive measures to insulate
the economy from the global economic turmoil
and financial meltdown.
“This extraordinary time requires extraordinary
measures,” he said.
“It must be stressed that the total expenditure
amount mentioned in the 2009 Budget has not
changed. The fund used for the additional meas-
ures is money saved from the fuel subsidy,” he
said.
Under the strategy to implement expansionary
fiscal policy, Najib said the government would
review all projects with a view to giving priority
to projects that can be implemented immediately
and have high multiplier effects and low import
content.
This will be implemented without affecting the
development expenditure allocated for 2009, he
said.
For instance, the government has deferred
the procurement of helicopters for the Defence
Ministry and Home Ministry so that the money
can be used for other development projects, he
said.
performance.
“The money (RM5 billion injection) from Employ-
ees Provident Fund is guaranteed by the govern-
ment, so I do not see any problem with that.
“ValueCap has performed and the value of
shares has increased. We are monitoring it and
we are quite happy with its progress,” he said.
Asked how ValueCap would get the money to
pay off the debt, Najib said the shareholders will
decide the best way to settle the debt as they will
ensure that their interests are protected.
On the tendered price of RM1.6 billion by the
Eurocopter for selling 12 Cougar helicopters to
the government which will be due in February,
Najib said the government will decide when the
time comes as the deal has been suspended at
the moment.
“We cannot have it both ways, if the current
situation requires us to postpone, we postpone,
but eventually if we are going to buy, it is going to
be much higher than that,” he said.
Earlier, Tony Pua (DAP-Petaling Jaya Utara) urged
the government to explain the RM5 billion injection
into ValueCap, alleging the money would be used to
bail the company out of a RM5.1 billion debt.
Pua said after a news portal, The Malaysian
Insider, reported that the injection was not in-
tended as “additional” investment to support the
failing stock market but to rescue the company
to repay its debt due in February, DAP obtained
evidence from the Securities Commission that
ValueCap had issued a RM5.1 billion bond in
February 2003.
“As the bonds shall be renewable for up to
three years at the discretion of the bondholders
and the latest audited report of ValueCap in 2007
also confirmed that there is an existing long-term
deferred liability amounting to RM5.1 billion, the
company is required to return the monies to the
three bondholders – the EPF, Khazanah Nasional
Bhd and Permodalan Nasional Bhd come Febru-
ary,” he told a press conference in Parliament.
“The expose (by The Malaysian Insider) clearly
provides the real rationale behind the sudden
RM5 billion loan from the EPF to ValueCap. It’s a
mega bailout of the company whose investment
lifespan actually ended nearly three years ago.
“We also demand full and immediate account-
ability and transparency of ValueCap investments
since 2003, as per all international investment
funds, to explain its inability to ‘repay’ the initial
loans from the three bondholders,” he said.
Pua said the RM5 billion injection into Value-
Cap serves only to deal with the symptoms of
the global financial crisis and does not in any way
serve to increase the country’s ability to face the
challenges brought about by the crisis.