Sugar-coated election budget

(Speech by Parliamentary Opposition Leader, DAP Secretary- General and MP for Petaling, Lim Kit Siang, in the Dewan Rakyat on Tuesday, 27th Oct. 1981 on the 1982 Budget)

1982 Budget- a sugar-coated election budget which gives away $167 million in reduced taxes on consumer items in return for a blank cheque to spend $80.95 million nest year

The 1982 budget is clearly an election budget- sugar-coated to win votes in the next general elections expected early next year. Those who have doubts about the general elections being held next year need doubt no more with such a budget, especially with the way fears of the people were created and manipulated that there would be a tough budget, followed by the relief of a soft budget.

With the euphoria generated in the country post-Budget, one could be forgiven for thinking that Malaysia’s economy today is at its most buoyant period, instead of going through its most difficult times since the launching of the New Economic Policy in 1970.

The DAP welcomes the review and reduction of import duty, surtax and sales tax on consumer items to increase local supplies and help restrain price increases of these goods, which are of course subject to the caveat that these tax reductions filter down to the consumers and not blocked and siphoned off by the manufacturers, agents or dealers half-way.

The review and reduction of import duty, surtax and sales tax on consumer items amount to a total tax reduction of some $167 million comprising:

Review of import duty on essential consumer items $53 million
Abolition of import duty on cameras, watches, pens and lighters $4.2 mil
Review of surtax on essential consumer items $68 mil
Abolition of surtax on cameras, watches, pens and lighters $2.0 mil
Exemption of excise duties on consumer items $30 mil
Review of sales tax on essential consumer items $7 mil
Abolition of sales tax on cameras, watches, pens and lighters $2.8 mil
Total $167 million

The 1982 Budget can be described as a sugar-coated election budget which gives away $167 million in reduced taxes on consumer items in return for a blank cheque to spend $31.95 billion in operating and development expenditures, without anybody inquiring too closely as to how the money is going to be raised or how they are going to be spent.

The Finance Minister appears to have tried to gloss over the difficult economic conditions, faced by the country, especially:

  1. That Malaysia is having a merchandise account deficit, estimated to be at $127 million in 1981, increasing to $820 million in 1982. The current accounts of the Balance of Payments also show a deficit of $542 million in 1980, an estimated deficit of $5,578 million in 1981 and an estimated deficit of $6,476 million in 1982.
  2. That the overall balance of Malaysia’s Balance of Payments is expected to show a deficit of $780 million compared with a surplus of $1,002 million in 1980, leading to the rundown of Malaysia’s net international reserves from $10.3 billion to $10.1 billion at the end of 1981, sufficient to finance about 4 ½ month of retained imports at the current level as compared to the international reserves in the 1960s which were sufficient to finance an average of eight months’ retained imports. In 1982, Malaysia’s balance of payments is expected to deteriorate further by $350 million, and our net external reserves would decline by that amount to about $9.8 billion or equivalent to 4 months of retained imports at the current level.
  3. That in the Balance of Payments, there is an unusually large amount of short-term private capital outflow for 1981 and 1982, respectively at $1,846 million and $1,174 million, totaling 2, $3,020 million, when under the Fourth Malaysia Plan, 1981-1985, (Table 11-6), a total of $6,000 million was extimated for the “Short-term private capital and errors and commission” (Modal kewangan swasta jangka pendek dan kesilapan dan ketinggalan) for the five years from 1981-1985. Clearly, this calls for a government explanation for the substantial short-term private capital outflow, which at this juncture of the country’s economic development is highly detrimental; whether this reflects inadequate confidence in the country’s investment future, ect.
  4. That to meet Malaysia’s budget deficit, we are embarking on a scale of internal and external borrowing unprecedented in Malaysia’s history. For instance, for 1981, Malaysia will borrow $2,891 million externally and $3,300 million from domestic sources, totaling a net borrowing of $6,191 million, the single largest borrowing in a year so far.

    When we take into account the 1982 budget, with a revenue expected at $17,497 million (after taking into account the 1982 revenue proposals), and a budget of $17,319, million (leaving a puny current account surplus of $178 million), the bulk virtually the entirety of the development budget of $14.6 million will have to come from internal and external borrowings. This means that 1981 rate of external and internal borrowings would be exceeded!

    The Fourth Malaysia Plan estimates that it would need to borrow from external Plan estimates that it would need to borrow from external sources, both market and project loans, an amount of $1,000 million. At the rate of Treasury’s external borrowing in 1981 and 1982, it is likely that this FMP’s target of $4,000 million external borrowing would be exceeded in 1982 itself, may be as high as 50%!

  5. According to the Fourth Malaysia Plan (Para 599), with the amount of external borrowing targeted, namely $4,000 million during the five year period, the average external debt service ratio would be 2.4%, which is already exceeded in 1981 itself, with the foreign debt service ration standing at2.6%.

The FMP target of a foreign debt service ratio of 2.6 may be doubled at the present rate of external borrowings.

It is fortunate that Malaysia’s oil finds and productions have been able to help considerably in tiding Malaysia over her economic difficuties.

Malaysia’s revenue from petroleum production has increased from $3,458 million or 22.67% of total revenue in 1981 to an expected $4,073 million or 23.23% of total revenue in 1982, comprising:

1981 1982
Income Tax- Petroleum 1,854 mil. 2,387 mil.
Petroleum Royalties 398 mil. 418 mil.
Export Duties- Petroleum 1,216 mil. 1,268 mil.
3,458 mil. 4,073 mil.

From 1975- 1981, the total revenue which Malaysia had netted from petroleum production reached the sum of $8,845 million, which would exceed the ten billion-dollar mark to total $13 billion including next year’s petroleum revenues.

However, the question that is being urgently asked by thinking Malaysians is whether we are conserving our petroleum resources, which is expected to run out by the end of 1990 in the absence of new discoveries, in the best interest of the nation and our future generations.

Although the government has announced a National Policy on oil Depletion, which fixed the average production rate at 260,000 barrels per day for 1981, there is no doubt that production rate for 1981 would have exceed 275,000 barrels per day if not for the world oil glut forcing down the price of petroleum. In the first half of 1981, despite the National Oil Depletion Policy, the Government directed Petronas to increase its output to 270,000 barrels per day in order make up for the loss of revenue arising from the poor prices for the country’s primary commodities.

However, oil process declined, and the government directed Petronas to cut down production to an estimated rate of between 220,000 and 230,000 barrels per day in the second half of 1981, after Petronas had difficult in disposing of the increased output t a period of international oil glut.

This shows that it is not the National Oil Depletion Policy which determines the rate of output of Malaysia’s Petroleum resources, but the needs of the government of the day for more revenue.

The present stewardship of the petroleum resources by Petronas and by the Government, away from public scrutiny and accountability, is most unsatisfactory, especially as petroleum has become the mainstay of Malaysia’s revenue, bringing in export revenue of $1,268 million for 1982 as compared to rubber’s $804 million and palm oil’s $208 million, and tin one’s $329 million.

Ever since its establishment in 1974, Petronas had made profits aver tax totaling $4.55 billion, comprising:

1976 $250.7 mil.
1977 $662.6 mil.
1978 $674.7 mil.
1979 $761.4 mil.
1980 $2,203.3 mil.
$4,552.7 mil.

In view of Petroleum’s critical role I the Malaysian economy, especially in the Eighties, it is essential that Parliament exercises meaningful control and responsibility over Petronas.

The present arrangement whereby the Prime Minister is answerable to Parliament on Petronas, and where he offers minimal information even when asked, is not conducive to the government’s profession of wanting to have a government which is ‘Bersih, cekap and lichin’ which upholds public accountability.

I therefore call on the Prime Minister to review the present situation, where Parliament’s understanding control and responsibility over Petronas is so insatisfactory as to be non-existent, and to take action to institute meaningful Parliamentary supervision of Petronas. For a start, Petronas, though a company registered under the Companies Act, should be required to submit a annual report of its activities to Parliament which could serve as a basis for Parliamentary debate if circumstances warrant it.

The Finance Minister, Tengku Razaleigh, in his budget speech, said the government would further improve project management and accountability, and the overall implementation capacity of the government’s development plans.

At one time, the idea of ‘public accountability’ of public servants and organisaitons was virtually regarded as a dirty word. I am glad that this concept has become more acceptable, but the test of its acceptance must be seen in action rather than lip-service. This is why I hope that a right start to ensure ‘public accountability’ of such a key institution as Petronas could be made by none other than of such a key institution as Petronas could be made by none other than the Prime Minister himself to set an example to all his other subordinates.

Malaysia has still a long way to go to hold public servants and institutions fully accountable to the people and country. The Auditor-General’s reports both on the Federal and State Government Accounts are ample testimony of the large number of cases involving top government leaders and officials who are most alien to the concept of accountability.

In fact, one reason for the delays in the State Governments, and sometimes the Federal Government, to submit their accounts to the Auditor-General on time for his examination, audit and report stems from the inadequate understanding of top government officers concerned of their responsibility to the concept of accountability.

The breakdown of the concept and system of accountability has led to public institutions- the best example are the State Development Corporations and their subsidiaries- running wild incurring huge government losses.

Although the State Development Corporations and their subsidiary companies are technically directly the responsibility of the State Government – although they are eventually funded by the Federal Government through loans to the State Governments concerned, – the system of holding them to account by the respective State Assemblies have completely broken down.

Firstly, most State Economic Development Corporations do not present their annual reports, as they required statutorily, to their respective State Assemblies.

According to the Auditor-General, Tan Sri Dato Ahmad Noordin bin Haji Zakaria , in his 1978 Report on the Johore State Accounts, the Johore State SEDC had never presented its annual reports to the Johore State Assembly. In Malacca, as a resulted DAP pressures, the Malacca SEDC finally presented, in one combined version, the annual reports from 1975 to 1975 in 1978, and after that, the Malacca SEC lapsed into inertia, and is now in arrears with its annual reports since 1976!

Secondly, the system of holding the State Government to account through the Auditor-General’s Report and the examination of the State Public Accounts Committee have virtually become an exercise in history, as, for instance, the Malacca Public Accounts Committee is now currently examining the Auditor-General’s Report on the 1972 Accounts- which has clearly a big waste of time: and unless the Federal and State Governments and public enterprises could be held to account for their irregularities, malpractices and improprieties of contemporaneous, where there is chance of requiring the officers concerned to answer directly for their misdeeds, then the whole system of accountability takes on an air of a historical search involving personalities long passed away from the scene, either because of transfer, resignation or retirement.

In this regard, the Federal Government and the Parliamentary Public Accounts Committee must set a good example for all the state governments and assemblies to follow. At present, the PAC’s Report for the Auditor- General’s Report for the 1975 and 1976 Federal Government Accounts had not yet been tabled in Parliament, although I understand they are ready. The PAC recently completed its examinations into the 1977 Federal Government Accounts Report by the Auditor-General, but if the PAC’s Report on the 1977 Accounts are to wait its turn until its 1975 and 1976 Reports are printed and tabled in Parliament, it would probably have to wait for another one or two years.

If the government is sincere in wanting t pull up the government machinery by its boot-straps and expose it to the concept of public accountability, then I call on the Prime Minister to direct that the tabling of the PAC’s 1975, 1976 and 1977 Reports should be given the topmost priority, and that they should all be tabled in the present meeting of Parliament. Time should then be allocated by the government for a fullscale parliamentary debate on the PAC reports to give public accountability to Parliament of government departments full flesh and substance.

Otherwise, there are government departments which still take a most indifferent attitude to the Auditor-General’s queries and the PAC examinations. A good example is in connection with the Auditor-General’s 1977 Federal Government Report on the ‘instant mee’ scandal, where the contract price of ‘instant mee’ in Sabah and Sarawak for the armed forces in 1977 and 1978 was fixed at $4.90 and $3.90 a packet respectively compared with the average contract price of about 14 cents a packet in Peninsular Malaysia, involving a loss of $962,000 to the pubic coffer.

What is shocking is that it was after the PAC had its examination o that item that the Ministry of Defence announced that it was setting up a board of inquiry into the ‘instant mee’ scandal. Clearly, before that, despite the queries by the Auditor-General from 1978 onwards, the Ministry of Defence just ignored or disregarded the matter as irrelevant.

What is equally shocking is that despite the fact that the matter was reported to the NBI as far back as 1978, no action has yet been taken by the NBI on the matter. This does not speak well for an effective, fearless and competent anti-corruption agency as promised by the new Mahathir-Musa administration.

Johore Bahru Customs holding the public to ransom

Despite Dr. Mahathir’s Hundred Days as Prime Minister, I do not think that the concept of public accountability has sufficiently speeded down and permeated the thinking and approach of all government servants and departments.

What happened at the Johore Bahru customs last week, causing over a mile long traffic foul-up on the eve of Deepavali, is a good illustration.

As a result of NBI action against two Customs officials who were found to have cash of a few hundred dollars on their persons, contrary to service regulations, and the NBI search of a tourist bus, the Johore Bahru customs retaliated by virtually conducting a ‘go slow’ – on the ground of conducting a thorough search of every passenger or car entering the Johore Bahru customs complex. According to the New Straits Times, apples were being counted and lychee tins taxes.

It is clear to everyone that this is a Customs retaliation for the NBI action to arrest Customs officers who are corrupt, despite the attempt by Customs officers to camouflage it as an act of special conscientiousness by customs personnel.

In holding the public to ransom, the Customs in Johore Bahru have shown that they care not a hoot for ‘public accountability’ of their actions, but merely to carry out a departmental war with the NBI.

What is surprising is that the Johore Bahru customs were allowed to get away with such a shameless demonstration of their power of inconveniencing the public if they are nor allowed the franchise to have their takings from the public.

Customs officers who were responsible, either directly or indirectly in allowing the Johore Bahru customs foul-up to take place last week should be disciplined publicly, for they have put the interest of individuals in their department above the interests of the public.

This is why the mere clock-in and clock-out of government servants will not bring about a more ‘bersih, cekap, licin’ government service without a reorientation of the attitude, mentality and philosophy of government servants. Otherwise, forced to be in office punctually from 8 a.m. to 4.30 p.m., the government servants would take out their resentment on the helpless public, as happened most blatantly in Johore Bahru customs last week.

Call on Prime Minister to require Ministers and top government servants to declare their foreign incomes and property.

I welcome the Prime Minister’s statement in his interview on his Hundred Days in office that his government would wage a serious campaign against corruption, and the proposal to revert the NBI into an Anti-Corruption Agency.

The Prime Minister’s pledge to root out corruption is still to be matched with deeds, and time will only show whether the Fourth Prime Minister of Malaysia is any different from the other three Prime Ministers as far as the battle against corruption is concerned.

In this connection, I note that in the form distributed to Ministers, Deputy Ministers, Parliamentary Secretaries, Mentri-Mentri Besar, Chief Ministers, State Executive Councillors and senior government officers to declare their assets to the Prime Minister, there are loop-holes for evasion.

For instance, the Prime Minister’s Declaration of Assets from require the declarant to declare the fixed assets, like land and houses, and also their shares in companies and banking accounts.

However, the way the Declaration of Assets Form was drawn up, there are various loopholes which would allow for evasion of a proper declaration arising from:

  1. A declarant required to declare the assets of house and land, owned Locally or abroad, and also of wife, husband, and children under age charge. This excludes assets of houses and land held by children who are of age, which will provide a escape clause for the deposit of ill-gotten gains.
  2. Although a declarant is required to declare the company and corporate shares owned, this applies only to local shares and not foreign shares.
  3. Although a declarant is required to declare the cash and banking accounts held, including savings and fixed deposits, there is no need for declaration of such banking accounts in foreign countries. This would give legitimacy to Ministers, Deputy Ministers, Parliamentary Secretaries, Mentri-Mentri Besar, Chief Ministers, State Exco Members and Senior Government servants to stash away their ill-gotten gains not only in unnumbered Swiss accounts, but in any foreign account, for they need not declare. Although it is not possible to check the veracity of foreign accounts kept by a declarant, such a declaration is needed to provide fullness by a declarant, such a declaration is needed to provide fullness of declaration. Otherwise, all that a declarant need to do is to dispose his property and transfer them abroad either in foreign banking accounts or in the acquisition of foreign shares.
  4. But the biggest loophole of all is that the declaration does not backdate for any period of time. This means that before a declarant makes the declaration of asset to the Prime Minister, he or she could dispose of whatever assets and put them in the names of grown-up children, or other relatives expect for spouses and under-aged children, and they would be able to escape ant truthful declaration. Clearly, such a Declaration of Assets must be required to be backdated for two or three years, I order to provide a proper picture of a declarant’s state of assets.

The greatest weakness of the Declaration of Assets as announced by the Prime Minister is that it is made only to the Prime Minister himself. The Prime Minister said that he would not be able to stamp out corruption, but that he would ‘put the fear of God in those people who are corrupt”.

I am not very convinced that such “fear of God” could go a long way to combat corruption, for up till now, top political and government leaders who are known by all and sundry to be corrupt, as they had assets and income grossly disproportionate to their known sources of income, strut around freely in impunity.

It is not that there is lack of knowledge that they had acquired their wealth and assets by corrupt means, but the lack of the political will-power to clean up the Augean’s Stable of corruption, for it would shake up the whole system of political power in the Federal and state government levels.

However, we wish the Prime Minister’s efforts to combat corruption well, for corruption rampant and unchecked can only lead to the ruination of the moral fibre and political will of the country.

The Finance Minister had said that improve the Government machinery, the Cabinet Committee on Implementation had introduced a whole range of measured to streamline administrative procedures and to haste the process and quality of decision-making. But this does not seem to be reflected by this year’s development performance.

The Treasury Economic Report 1981/82 (p. 57) said that of the total; appropriation of $14,627 million for development for 1981, the first year of the Fourth Malaysian Plan, actual development expenditure is estimated to reach $9,190 million, an increase of 23% over the 1980 actual development expenditure of $7,463 million.

But in the Finance Minister’s budget speech, which could not have been separated in time with the Economic Report by more than a month, a downward revised estimate of actual expenditure was given for development at $8,611 – a difference of $579 million. This means that implementation capacity of development projects by the Government for 1981 is merely 58.8% of the total development allocations.

This puts the Federal Government almost on par with the State Governments’ development implementation capacity, which had been the constant subject of criticism by the Auditor-General in his reports. It is clear therefore that the Cabinet Committee on Implementation’s measures had still to make an impact to upgrade the development implementation capacity of the government.

The need to upgrade implementation capacity of development projects, however, should not be an excuse to justify the wanton waste of public funds in projects through bad planning, inadequate feasibility study or downright inefficiency or incompetence.

The announcement by the Deputy Prime Minister, Datuk Musa Hitam, when he visited Ngeri Sembilan in early Sept. that the Federal Government has decided to write-off the $23 million Federal Government loan to the Ngeri Sembilan State Government over the losses of Gula N.S. is one good example.

Datuk Musa had said that the write-off of $23 million to the N.S. State Government should not be seen as the Federal Government condoning the losses, but should serve as a warning to all other SEDCs that they should conduct proper studies before venturing in any projects.

I was so concerned by Datuk Musa’s statement that I wrote to him urging him to reconsider the write-off as the circumstance it was announced would set a most unhealthy precedent for other state governments and public enterprises.

I would dare say that Datuk Musa’s ‘warning’ to all other SEDCs that they debts derived from the Federal Government would be written off if they flop, would be welcome by most if not all SEDCs in the country, which would probably compete with each other to be administered the biggest ‘warning’ in having the biggest Federal ‘write-off’ of their debts!

A write-off by the Federal Government of such a vast sum of money without a public a public accounting of the reasons for the failure of the Gula N.S., a government enterprise, will have no instructive effect to prevent future Gula N.S. disasters from recurring in Ngeri Sembilan or other states.

There clearly must be a proper criteria for the write-off of Federal government loans to state governments as it involves the taxpayers’ money. At the minimum, there mist be a public accounting of the reasons for the failure of the public enterprises, what lessons should be learnt from all government agencies and officials, and whether those responsible for the failure of the enterprise and the loss of vast sums of taxpayers’ money have been brought to book because of their negligence or incompetence.

The financial position of some SEDC companies are in a very bad state. According to the Auditor-General’s 1978 Report on the Johore State Government accounts, the Johore State Government invested $3.95 million in five fully-owned subsidiary companies, advancing $4.26 million to two of these five companies for their operating expenses. As at 31st Dec. 1978, the ‘asset backing’ of these five companies were merely $1.25 million!

A firm proper set of criteria must therefore be worked out, incorporating the element of public accountability, before any Federal loans to SEDCs, through State Governments, are written off, to ensure a higher standard of competence and performance, and that SEDCs do not become ‘bottomless pits’ where more and more public money must be dumped without returns.

At this period of economic and financial stringency, the Government should ensure that public expenditures are spent productively, that the people get the value of every dollar spent.

In this regard, wasteful and unproductive expenditures, like the $5 million Arch separating the Federal Territory and Selangor (financed from the Federal Government’s compensation money to Selangor) is a colossal monument of public money misspent and all the other Boundary Arches in various parts of the country should be halted.

The Government should launch an austerity drive to cut down on non-essential expenditures and increase productivity by workers both in the public and private sectors.

Tengku Razaleigh said in his budget speech that the 1982 Budget will not slacken in the government’s efforts to achieve the socio-economic objectives of the New Economic Policy.

The recent inflationary spiral has gravely affected the poverty groups, especially in areas of essential consumer items and housing.

There is dispute between economists and government officials about the actual rate of inflation, with university dons claiming that inflation is some three points above the Consumer Price Index figure, which would bring Malaysia into double-digit inflation in the second quarter of the year.

Apart from the reduction of import, surtax and sales tax on consumer items, the Government must ensure that the measures would reduce the inflation which had reduced the purchasing power of the poor and the low-income, especially through the establishment of an effective Consumers’ Department with the task of ensuring that the reduction in the import, surtax and sales tax on various consumer items are reflected in retail prices.

In view of the Prime Minister’s Hundred Day in Office interview today, I think it is necessary for the DAP to reiterate our stand on the New Economic Policy.

The DAP, and the large number of Malaysians who support the DAP, agree with the New Economic Policy objectives of achieving national unity through the two-pronged process of eliminating poverty regardless of race, and the restructuring of the Malaysian society to eliminate the identification of race with occupation, vocation, location.

We also accept the NEP pledge that in its implementation, ‘no particular group experiences any loss or feels any sense of deprivation of its rights, privileges income, job or opportunity.”

When the Second Malaysia Plan was debated in Parliament over 10 years ago, I said on behalf of the DAP in this House on July 14, 1971 that the DAP supported both prongs of the NEP to reduce and eventually eradicate poverty by raising income levels and increasing employment opportunities, for all Malaysians irrespective of race, and the acceleration of the process of restructuring of Malaysian society to correct economic imbalances, so as to reduce and eventually eliminate the identification of race with economic function.

What we do not support however, is any attempt at selective restructuring, or the repudiation of the NEP pledge that there would ne no discrimination against any racial group.

A review of the NEP shows that there had been selective restructuring, as illustrated by the refusal of the Government to restructure FELDA scheme participation to reflect the population, and to reduce and eliminate FELDA’s identification with any one race.

During the Second and Third Malaysia Plan, FEDDA resettled 42,000 families predominantly of one racial group, flying in the teeth of the restructuring objective of the NEP.

Every year, there had been new attempts to disregard the NEP Pledge of ‘no loss or deprivation’ for any racial group. In 1980, it was the Bintulu affair, where the Bintulu Development Authority introduced an regulation that before applications for the development of land in Bintulu would ne considered, there must be 50% bumiputra equity share-holding of the land concerned.

The Bintulu regulation is a gross violation of the New Economic Policy pledge of ‘no loss or development’ for any racial group, apart from a violation of the Constitution of the right to property and protection from ‘back door’ expropriation.

This year, 1981, the further breach of the NEP pledge comes from the Sungai Abong and Tanjong Agas affair in Muar.

In 1972, the State Government served notice that it intended to acquire land in 1976. A scheme for low-cost housing was planned for the area, and in 1979, the are was gazetted as Malay Reservation area. As a result, when the public were invited to apply for the 578 low-cost housing units there, the non-Malay were turned away on the ground that the Sungai Abong low-cost housing scheme stood on Malay reservation area. The same applies to Tanjong Agas low-cost housing scheme involving 542 low-cost housing units.

By this expedient, non-Malays are denied allocation for public low-cost housing, and this is clearly a breach of the New Economic Policy that there would be no ‘loss or deprivation’ of their legitimate rights and opportunities to public low-cost housing.

In fact, the Sungai Abong and Tanjong Agas affair violate also the second prong objective of the New Economic Policy to restructure society to reduce and eliminate the identification of race with location. Surely, if the objective of the Government is to create a multi-racial living environment, then it should case to create housing schemes or estates which are reserved exclusively to one particular race.

Furthermore, if the rights of the other races to fair allocation of low-cost housing could be deprived by this expedient of declaring a piece of land, originally acquired by from non-Malay owners, as Malay reservation, then similarly the rights of the other races on other socio-economic fields could similarly be deprived.

This is why the DAP demands that there should ne established a Commission on the New Economic Policy which could receive and adjudicate on complaints of violation of the NEP pledge of ‘no loss or deprivation’ for any racial group in the implementation of the NEP, to ensure that national unity, which is the overriding objectives of the NEP, is not defeated.

If there is such a NEP Commission to hear and adjudicate on NEP complaints, then the Bintulu violation in 1980 and the Sungai Abong and Tanjong Agas violations in 1981 could be referred to it for proper resolution.

Defence Spending- Call for a fundamental review of Malaysia’s Defence Policy

The increase of defence expenditures by leaps and bounds these past few years is a matter of great concern.

From the 1975 owners, the defence expenditures in each budget had been:

Operating Expenditure Development Expenditure (in Million) Total Percentage of Total Budget
1975 939 116 1,055 15%
1976 780 338 1,118 13.6%
1977 973 351 1,324 12.5%
1978 1,090 316 1,406 11.9%
1979 1,174 530 1,704 11.9%
1980 1,443 812 2,255 10.7%
1981 1,700 1,619 3,319 13.8%
1982 2,150 2,700 4,850 15.57%

On the Prime Minister’s assumption of office, he said the Government does not regard Vietnam as a direct threat to Malaysia. If this is he Government’s defence perception and policy, then clearly it must ne accompanied by a great reduction of defence expenditures to concentrate on the socio-economic development of the country, which is itself an important element in building up the defence resilience of the people and country.

The Government’s proposed $9.3 billion defence expenditures on defence hardwares under the Fourth Malaysia Plan, like A4 Skyhawks or Corsairs, tanks, Armoured Personnel Carries and Fire Support Vehicles, 155mm howitzers, are arsenals meant not to fight the traditional guerrilla and jungle warfare, but for a conventional battle.

At this moment of time, the only likely enemy object is Vietnam, with her Russian-supplied armaments and the vast arsenal left behind by the Americans.

Even if the Malaysia Government perceives Vietnam as a likely threat in a conventional military battle, the question that must receive the consideration of policy makers and Parliament is whether Malaysia on her own could stand up to a possible Vietnamse onslaught on her own resources of the ASEAN nations for a start, which will also reduce the defense costs to be born by each ASEAN country.

Malaysia must also consider the dangers of growing militarization is the country, which could lead to a military coup de tat as had happened in other countries which have taken the road of ever increasing military expenditures.

Furthermore, the role of an expanded military in nation building must be given proper perspecgive, for surely the military services should be used as important crucible to make Malaysians out of all Malaysian soldiers, sailors and airman. Towards this end, a deliberate policy to restructure the armed services to reduce and eliminate its identification with any one particular race must be embarked upon.

Caution against abuses in an election budget

Being an election budget, I must caution the government not to misuse public just for the purpose of catching votes.

We have seen in the past how the pre-election year witness the great expenditure of public funds on a variety of projects in the hope of getting the vote.

National and governmental resources are used by the various political party leaders in the government as if part of their party property, for disbursements to the people.

I understand that beginning with June this year, the minor development funds for each constituency had been increased from $100,000 to $100,000 a year, which are spent on the recommendation of the incumbent Barisan MP.

I would like to ask the Prime Minister what happened to the minor development funds allocated each year for the Opposition constituencies, as to whether he would be prepared to set an example of fair play by allowing Opposition MPs to make use of this minor development fund for each constituency.

After all, the votes in Opposition areas are also taxpayers, and are entitled to development funds in the same way as voters in other areas. If the $200,000 development fund comes from the Barisan treasury, then of course, there is no cause to complain. But since these funds come from the Federal treasury, the people have a right to expect even-handed approach and fairplay. I hope the Prime Minister would be able to give a satisfactory reply to this long-standing grievance of the electorate in Opposition areas.

Call on government to look after interest of trawler fisherman

At the end of July, the Minister of Agriculture, Datuk Haji Abdul Manan bin Haji Othman, granted a three month extension till Nov. 1, 1981, for the enforcement of the new Fisheries Regulations 1980 which prohibit the use of net whose mush size is less than 1.5 inches, as compared to the existing I inch mesh size, by trawler fishermen.

This followed the demonstration by the over 1,000 trawler fishermen in the Pantai Ramis and Dindings area who refused to go out to sea as they would have very poor catches and suffer grave economic hardships.

The other regulation prohibited trawler boats of 40 tons and below from fishing within five miles of the shore as compared to the three-mile limit previously.

The Nov.1 deadline expires in another four days, and the trawler fisherman in the Dindings area and elsewhere in the country are in the grip of a panic.

Fisheries Officials in Perak had gone out to sea with the trawler fishermen and have found out what the trawler had been complaining, that the 1.5 inch mesh size net would easily slash their catch by half or more, making it uneconomic for them to continue their livelihood.

The present trawler fisherman were encouraged by the Fisheries Department to convert from traditional fishing methods to trawler fishing in the min-1960s, and now with the new Fisheries Regulations, the trawler fishermen are left high and fry, and literally placed between ‘the devil and the deep blue sea’.

This is because their boats and gear would be too uneconomic for use for traditional fishing inshore, and would also be too small and inadequate for deep-sea trawling, or even for trawling five-mile and beyond.

As the government had in the first instance encouraged them to convert to trawling, the government has a moral duty and obligation to them to ensure that they are not placed in a position where they suffer great financial losses and hardships, as many of them are still in the process of trying to complete their payments for their trawler boats and gears. Furthermore, the expected life span of such trawler boats are about 8 to 10 years, and to abandon them now, as would be the case with the strict enforcement of the new Regulations, would mean a total loss of their investments without hope of recoupment.

If it is the policy of the Government the phase out small-scale trawler fishing from the three-mile to five-mile zone, as permitted previously, then the government must work out a comprehensive scheme and provide a reasonable time for the phasing out, and not to impose and implement Regulations without regard for the hardships caused to the trawler fishermen, who had contributed to the fishing industry and export earnings of the country.

The trawler fishermen should be given at least three years to phase out, and with government help, convert to larger and highly capitalized trawler fishing in the deep seas, or be given other forms of government assistance to seek alternative employment, as taking up freshwater breeding or other forms of aquaculture.

It is most unfair on the part of the Ministry of Agriculture and Fisheries Department telling the trawler fishermen to either go for deep sea fishing or revert to traditional methods of fishing, especially as deep-sea fishing is still a very new thing in Malaysia.

According to the Treasury Report, MAJUIKAN is only now planning to study the possibility of deep-sea fishing, and towards this end, a research ship capable of operating in waters more than 60 miles offshore is expected to be ready in 1982.

I would therefore urge the Minister of Agriculture to extend the Nov.1 deadline for implementation of the Fisheries Regulations to allow time for the Government to phase out trawler fishing from 3 mile to 5 miles of shore, so as to be able to draw up a comprehensive scheme to look after the economic interests of trawler fishermen who would be badly affected by it. The Government should be ready to offer the trawler fishermen with incentives and convert to bigger-scale trawler fishing in terms of financial assistance, or concrete schemes to switch to alternative employment as in aquaculture or even land settlement scheme.

To pass and carry out a death sentence on a group of Malaysians who had been lawfully carrying out their economic pursuits contributing to the national economy without giving them assistance and an opportunity to switch to other forms of economic pursuits is most inhumane and cruel, and most out of keeping with a government committed to the welfare of the people.