Chart : How has the government managed the budget surplus in the last 16 years?

Taken from PoliTweet.Org

This graph shows the budget surplus trend as a percentage of GDP from 1996 – 2012. Since 1998 there has been a budget deficit.

A budget deficit occurs when the government spends more than it receives in revenue. Deficits are financed by borrowing, which increases public sector debt. This is not necessarily a bad thing, as government spending can help stimulate economic growth and benefit society through welfare, healthcare and measures dealing with job loss and owning property. This can become necessary during a recession.

What is important for voters is ensuring that the government works to reduce the deficit, so it does not remain high or increase over a sustained period. This can be seen from 2000 – 2007. The original budget deficit estimated for 2009 was 3.6%. It ultimately turned out to be 7.0%. Why?

In 2008/2009 there was a global recession and Malaysia experienced negative GDP growth and lower projected revenue. The export-focused manufacturing sector was the hardest hit. The government implemented stimulus packages (RM 67 billion) and other measures to help the economy. This brought the economy from a negative GDP growth of -1.6% in 2009 to a positive growth of 7.2% in 2010 (5.4% when compared to 2008 GDP figure).

Barisan Nasional has allocated RM 232.8 billion for Budget 2012, and aims to bring the deficit down to -4.7% of GDP.

Pakatan Rakyat has allocated RM 220.5 billion for Budget 2012, and aims to bring the deficit down to -4.4% of GDP.

Ahmed Kamal
12 October 2011

——

Figures used in this graph:

Format: Year – Deficit (% of GDP)

1996 : 0.7
1997 : 2.3
1998 : -1.8
1999 : -3.2
2000 : -5.8
2001 : -5.5
2002 : -5.6
2003 : -5.3
2004 : -4.3
2005 : -3.6
2006 : -3.3
2007 : -3.2
2008 : -4.8
2009 : -7.0
2010 : -5.6
2011 : -5.4
2012 : -4.7

Chart : Budget 2012, Pakatan Rakyat Vs Barisan Nasional

Taken from PoliTweet.Org

(NOTE: Chart on the left is the Barisan Nasional budget, chart on the right is the Pakatan Rakyat budget)

How does the Pakatan Rakyat Budget compare with the Barisan Nasional Budget for 2012?

This graph shows the allocation in spending in both budgets across 7 different areas.

Barisan Nasional (BN) allocated RM 232.8 billion.
Pakatan Rakyat (PR) allocated RM 220.5 billion.
The previous 2011 Budget was 213.9 billion.

The percentage gap in spending priorities is greatest in National and International Affairs, Education, Talent and Employment and Community Wellbeing.

Pakatan Rakyat’s spending priorities are:

1. Education, Talent and Employment (25%)
2. National and International Affairs (21%)
3. Economics and Finance (16%)
4. Community Wellbeing (15%)
5. Security (11%)
6. Agriculture and Regional Development (8%)
7. Infrastructure, Resource Management and Environment (4%)

Barisan Nasional’s spending priorities are:

1. National and International Affairs (26%)
2. Education, Talent and Employment (22%)
3. Economics and Finance (16%)
4. Community Wellbeing (12%)
5. Security (11%)
6. Agriculture and Regional Development (8%)
7. Infrastructure, Resource Management and Environment (5%)

Despite similar priorities and a 5.57% smaller budget, Pakatan Rakyat has allocated more spending than Barisan Nasional in the following areas:

1. Education, Talent and Employment (54.3 billion vs 51.4 billion)
2. Community Wellbeing (32.8 billion vs 28.1 billion)

This was achieved by reducing the allocation in other areas, primarily National and International Affairs.

Ahmed Kamal
11th October 2011

——
Government agencies for each area:

National and International Affairs
——
Tanggungan
Parlimen
Pejabat Penyimpan Mohor Besar Raja-Raja
Jabatan Audit
Suruhanjaya Pilihan Raya
Suruhanjaya Perkhidmatan Awam
Jabatan Perdana Menteri
Jabatan Perkhidmatan Awam
Jabatan Peguam Negara
Suruhanjaya Pencegahan Rasuah Malaysia (SPRM)
Kementerian Luar Negeri
Kementerian Wilayah Persekutuan dan Kesejahteraan Bandar
Suruhanjaya Perkhidmatan Pendidikan
Kementerian Penerangan, Komunikasi dan Kebudayaan
Simpanan Luar Jangka
Kementerian Pembangunan Usahawan dan Koperasi
Kementerian Perpaduan, Kebudayaan, Kesenian dan Warisan
Kementerian Hal Ehwal Dalam Negeri

Education, Talent and Employment
——
Kementerian Pelajaran
Kementerian Sumber Manusia
Kementerian Pengajian Tinggi

Economics and Finance
——
Kementerian Kewangan
Kementerian Perdagangan Antarabangsa dan Industri
Kementerian Perdagangan Dalam Koperasi dan Kepenggunaan
Kementerian Pelancongan

Community Wellbeing
——
Kementerian Pengangkutan
Kementerian Kesihatan
Kementerian Perumahan dan Kerajaan Tempatan
Kementerian Belia dan Sukan
Kementerian Pembangunan Wanita, Keluarga dan Masyarakat

Security
——
Kementerian Pertahanan
Kementerian Dalam Negeri

Agriculture and Regional Development
——
Kementerian Perusahaan Perladangan dan Komoditi
Kementerian Pertanian dan Industri Asas Tani
Kementerian Kemajuan Luar Bandar dan Wilayah

Infrastructure, Resource Management and Environment
——
Kementerian Sumber Asli dan Alam Sekitar
Kementerian Kerja Raya
Kementerian Tenaga, Teknologi Hijau dan Air
Kementerian Sains, Teknologi dan Inovasi

Chart : How does the Pakatan Rakyat Budget compare with the Barisan Nasional Budget for 2012?

Taken from PoliTweet.Org

This graph shows the trend in spending by the Barisan Nasional government across 7 different areas from 2008 – 2012. The dotted lines indicate how the budget would be spent if Pakatan Rakyat was in control of the Federal Government.

Barisan Nasional (BN) allocated RM 232.8 billion.
Pakatan Rakyat (PR) allocated RM 220.5 billion.
The previous 2011 Budget was 213.9 billion.

The gap in spending priorities is greatest in National and International Affairs, Education, Talent and Employment, Economics and Finance and Community Wellbeing.

Pakatan Rakyat focused spending on increased Education, Talent and Employment and Community Wellbeing and a 20% reduction on National and International Affairs.

Barisan Nasional focused spending on increased Economics and Finance, Agriculture and Regional Development and Infrastructure, Resource Management and Environment.

Ahmed Kamal
10th October 2011

——
Government agencies for each area:

National and International Affairs
——
Tanggungan
Parlimen
Pejabat Penyimpan Mohor Besar Raja-Raja
Jabatan Audit
Suruhanjaya Pilihan Raya
Suruhanjaya Perkhidmatan Awam
Jabatan Perdana Menteri
Jabatan Perkhidmatan Awam
Jabatan Peguam Negara
Suruhanjaya Pencegahan Rasuah Malaysia (SPRM)
Kementerian Luar Negeri
Kementerian Wilayah Persekutuan dan Kesejahteraan Bandar
Suruhanjaya Perkhidmatan Pendidikan
Kementerian Penerangan, Komunikasi dan Kebudayaan
Simpanan Luar Jangka
Kementerian Pembangunan Usahawan dan Koperasi
Kementerian Perpaduan, Kebudayaan, Kesenian dan Warisan
Kementerian Hal Ehwal Dalam Negeri

Education, Talent and Employment
——
Kementerian Pelajaran
Kementerian Sumber Manusia
Kementerian Pengajian Tinggi

Economics and Finance
——
Kementerian Kewangan
Kementerian Perdagangan Antarabangsa dan Industri
Kementerian Perdagangan Dalam Koperasi dan Kepenggunaan
Kementerian Pelancongan

Community Wellbeing
——
Kementerian Pengangkutan
Kementerian Kesihatan
Kementerian Perumahan dan Kerajaan Tempatan
Kementerian Belia dan Sukan
Kementerian Pembangunan Wanita, Keluarga dan Masyarakat

Security
——
Kementerian Pertahanan
Kementerian Dalam Negeri

Agriculture and Regional Development
——
Kementerian Perusahaan Perladangan dan Komoditi
Kementerian Pertanian dan Industri Asas Tani
Kementerian Kemajuan Luar Bandar dan Wilayah

Infrastructure, Resource Management and Environment
——
Kementerian Sumber Asli dan Alam Sekitar
Kementerian Kerja Raya
Kementerian Tenaga, Teknologi Hijau dan Air
Kementerian Sains, Teknologi dan Inovasi

Chart : How have government spending priorities changed for 2012?

Taken from PoliTweet.Org

The 2012 Budget of RM 232.8 billion shows increased spending across most Federal government agencies. However, when compared with the 2011 Budget of RM 213.9 billion, it becomes apparent that some agencies received a reduced share of the budget despite an increase in spending.

For some allocations (e.g. Simpanan Luar Jangka/Contingencies Reserve) that is to be expected. But this visualisation helps analysts see which agencies experienced the biggest shifts in spending. It also serves to highlight any incongruity between the increases in dollar figures versus the proportional change in spending. Take Education and Security for example.

For Education, the total increase for the Ministry of Education (Kementerian Pelajaran) and Ministry of Higher Education (Kementerian Pengajian Tinggi) is RM 1.8 billion.

For Security, the total increase for the Ministry of Defence (Kementerian Pertahanan) and Ministry of Home Affairs (Kementerian Dalam Negeri) is RM 1.03 billion.

Looking at the dollar figures, it would seem that both spending areas have received substantial increases. While that is true, from the chart it is clear they have a lower priority.

How was this calculated?

For Education:

1) The Ministry of Education received an increase of 1.5 billion
2) The Ministry of Higher Education received an increase of 290 million.
3) The total increase is 1.8 billion.
4) In 2011 they took up 22.6% of the budget. For 2012 they have been given 21.55%.
5) Despite the increase of 1.8 billion, it’s a loss of -1.05% since 2011.

For Security:

1) The Ministry of Defence received a decrease of 108.9 million
2) The Ministry of Home Affairs received an increase of 1.1358 billion.
3) In 2011 they took up 10.92% of the budget. For 2012 they have been given 10.47%.
4) That is a loss of -0.45% since 2011.
5) Individually the Ministry of Defence has reduced -0.57%, whereas the Ministry of Home Affairs increased by 0.12%.

In summary, both areas have received a reduced share of the budget, and the allocation share for Education has reduced at a greater rate than the allocation for Security.

Ahmed Kamal
———
Summary of the figures used in this chart:

(Agency – % change from 2011 to 2012)
Kementerian Kewangan – 1.243464
Kementerian Wilayah Persekutuan dan Kesejahteraan Bandar – 0.652124
Kementerian Kerja Raya – 0.56324
Kementerian Pertanian dan Industri Asas Tani – 0.50238
Kementerian Perusahaan Perladangan dan Komoditi – 0.442796
Kementerian Tenaga, Teknologi Hijau dan Air – 0.285943
Kementerian Pembangunan Wanita, Keluarga dan Masyarakat – 0.262252
Kementerian Perdagangan Antarabangsa dan Industri – 0.176616
Kementerian Kesihatan – 0.13168
Kementerian Dalam Negeri – 0.127052
Kementerian Sumber Manusia – 0.08036
Jabatan Perkhidmatan Awam – 0.019177
Kementerian Pelancongan – 0.015936
Kementerian Luar Negeri – 0.009734
Pejabat Penyimpan Mohor Besar Raja-Raja – (0.000024375)
Suruhanjaya Perkhidmatan Pendidikan – (0.00045)
Jabatan Audit – (0.00089)
Parlimen – (0.00115)
Jabatan Peguam Negara – (0.0014)
Suruhanjaya Perkhidmatan Awam – (0.00149)
Suruhanjaya Pilihan Raya – (0.00156)
Suruhanjaya Pencegahan Rasuah Malaysia (SPRM) – (0.00378)
Kementerian Penerangan, Komunikasi dan Kebudayaan – (0.00384)
Kementerian Perumahan dan Kerajaan Tempatan – (0.02464)
Kementerian Sains, Teknologi dan Inovasi – (0.02704)
Kementerian Belia dan Sukan – (0.03375)
Kementerian Sumber Asli dan Alam Sekitar – (0.03676)
Kementerian Perdagangan Dalam Koperasi dan Kepenggunaan – (0.05891)
Simpanan Luar Jangka – (0.07565)
Kementerian Pengangkutan – (0.09692)
Kementerian Pengajian Tinggi – (0.35214)
Tanggungan – (0.41076)
Kementerian Kemajuan Luar Bandar dan Wilayah – (0.50461)
Kementerian Pertahanan – (0.56966)
Kementerian Pelajaran – (0.70084)
Jabatan Perdana Menteri – (1.60688)

Chart: The size of Malaysia’s public debt

Taken from PoliTweet.Org

The public debt is the total amount owed by the Federal Government, both domestic and external. Since 1997 the Federal Government debt (public debt) has steadily increased. The latest figure for June 2011 places the debt at RM 437 billion.

Not only has the total debt been increasing, but the rate of growth has for the most part remained high. It crossed RM100 billion in 1998. It crossed 200 billion in 2004. It crossed 300 billion in 2008. It crossed 400 billion in 2010.

In other words, the time taken for the debt to grow has been:

100 billion to 200 billion = 6 years
200 billion to 300 billion = 4 years
300 billion to 400 billion = 2 years

That is an exponential growth rate. The average growth rate from 2005 – 2010 was 10.6%/year. If the current growth rate holds steady at 10%, the public debt will cross RM 1 trillion by 2020.

Ahmed Kamal
19th October 2011

(*) Domestic debt is debt owed to creditors within the country (citizens). Examples are treasury bills, securities (e.g. EPF), and other borrowings by the government.

(*) External debt is debt owed to creditors outside the country. Examples are external market loans in foreign currencies, and external bilateral and multilateral project loans.

——
Data used in this graph:

Format : Year – Amount

Domestic Debt (RM million)
1995 – 78038
1996 – 79211
1997 – 76968
1998 – 88197
1999 – 93750
2000 – 106805
2001 – 121396
2002 – 128680
2003 – 151483
2004 – 181970
2005 – 198670
2006 – 217220
2007 – 247120
2008 – 286121
2009 – 348600
2010 – 390356
June 2011 – 421016

External Debt (RM million)
1995 – 13331
1996 – 10470
1997 – 12952
1998 – 14924
1999 – 18368
2000 – 18821
2001 – 24328
2002 – 36283
2003 – 37284
2004 – 34654
2005 – 30000
2006 – 25005
2007 – 19602
2008 – 20316
2009 – 13786
2010 – 16745
June 2011 – 16166

Chart: The growth rate of public debt

Taken from Poliweet.Org

The public debt is the total amount owed by the Federal Government, both domestic and external. Since 1997 the Federal Government debt (public debt) has steadily increased. The latest figure for June 2011 places the debt at RM 437 billion.

This chart shows the growth rate on a yearly basis from 1996 – June 2011. It is helpful for analysts to identify our worst and best years. From this it is easy to see that the 2008 – 2009 recession was the worst period, where the debt increased by 18.26%.

A lower growth rate can be achieved by the government either by increasing revenue or lowering expenses.

Not only has the total debt been increasing, but the rate of growth has for the most part remained high. It crossed RM100 billion in 1998. It crossed 200 billion in 2004. It crossed 300 billion in 2008. It crossed 400 billion in 2010.

In other words, the time taken for the debt to grow has been:

100 billion to 200 billion = 6 years
200 billion to 300 billion = 4 years
300 billion to 400 billion = 2 years

That is an exponential growth rate. The average growth rate from 2005 – 2010 was 10.6%/year. If the current growth rate holds steady at 10%, the public debt will cross RM 1 trillion by 2020.

Ahmed Kamal
19th October 2011

——
Data used in this graph:

Format – Year : Percentage change from previous year

1996 : -1.847453732
1997 : 0.266500151
1998 : 14.6808274
1999: 8.724702049
2000 : 12.04802084
2001 : 15.99828061
2002 : 13.20235514
2003 : 14.42990246
2004 : 14.75734636
2005 : 5.560787355
2006 : 5.927756155
2007 : 10.11332439
2008 : 14.89003532
2009 : 18.25791272
2010 : 12.33905283
June 2011 :7.389075438

Chart: The possible future of public debt- RM1 trillion

Taken from Poliweet.Org

The public debt is the total amount owed by the Federal Government, both domestic and external. Since 1997 the Federal Government debt (public debt) has steadily increased. The latest figure for June 2011 places the debt at RM 437 billion.

Not only has the total debt been increasing, but the rate of growth has for the most part remained high. It crossed RM100 billion in 1998. It crossed 200 billion in 2004. It crossed 300 billion in 2008. It crossed 400 billion in 2010.

In other words, the time taken for the debt to grow has been:

100 billion to 200 billion = 6 years
200 billion to 300 billion = 4 years
300 billion to 400 billion = 2 years

That is an exponential growth rate. The average growth rate from 2005 – 2010 was 10.6%/year. If the current growth rate holds steady at 10%, the public debt will cross RM 1 trillion by 2020.

This chart shows the size of the public debt from 1995 – 2020, based on an estimated growth rate of 10% per year from June 2011 onwards. This serves as an illustration of the possible future of the public debt based on recent trends.

While the debt ceiling ensures this will not happen easily, this chart should make it clear that recent trends are not sustainable for the future. Economic reforms are needed to drive up revenue, lower expenditure or both.

Ahmed Kamal
19th October 2011

——
Data used in this graph:

Format : Year – Amount

Public Debt (RM million)

1995 – 91369
1996 – 89681
1997 – 89920
1998 – 103121
1999 – 112118
2000 – 125626
2001 – 145724
2002 – 164963
2003 – 188767
2004 – 216624
2005 – 228670
2006 – 242225
2007 – 266722
2008 – 306437
2009 – 362386
2010 – 407101
June 2011 – 437182
2012 – 480900.2
2013 – 528990.22
2014 – 581889.242
2015 – 640078.1662
2016 – 704085.9828
2017 – 774494.5811
2018 – 851944.0392
2019 – 937138.4431
2020 – 1030852.287

Najib unveils ‘feel good’ Budget

Taken from Free Malaysia Today

KUALA LUMPUR: Prime Minister Najib Tun Razak today unveiled Budget 2012 in the Dewan Rakyat, which offered incentives and goodies for the lower and middle-income groups.

In his televised speech, Najib said the total revenue for 2012 is forecast to increase 1.9% to RM186.9 billion and the deficit to decrease to 4.7% of GDP from 5.4%.

Last year, Najib said the FDI (foreign direct investment) growth was the strongest in Asia and in the first six months of this year, it had already reached RM21.2 billion.

Below are some of the salient points from the budget, themed: “National Transformation Policy: Welfare for the Rakyat, Well-Being of the Nation.”

• Senior citizens aged 60 years and above will be exempted from outpatient registration fees at government hospitals and health clinics.
• RM15 million will be allocated to build 150 futsal courts to achieve the “One Court for One Mukim” target.
• RM200 million will be allocated to train youths who have left school through the SAY 1Malaysia programme.
• The government will establish MyCreative Venture Capital with an initial fund of RM200 million.
• To prevent cervical cancer, the government will provide free Human Papilloma Virus immunisation nationwide.
• A training allocation of RM10 million will be provided for women to develop leadership and managerial skills.
• To assist the homeless, the government established a social assistance centre known as Anjung Singgah.
• The National Legal Aid Foundation will ensure that every individual who is charged in court will be given free legal aid.
• To assist taxi owners facing increased operating costs, measures will be introduced including tax exemptions on taxis.
• Teraju will coordinate and drive the transformation and strengthen Bumiputera’s participation in business.
• Hospital Kuala Lumpur – the oldest in Malaysia – will be upgraded to be the country’s premier hospital.
• Hospitals will be upgraded and constructed as well as 81 rural health clinics upgraded and 50 new 1Malaysia clinics will be launched.
• Healthcare will be allocated RM15 billion operating expenditure and RM1.8 billion development expenditure.
• The government will establish the Special Housing Fund for fishermen to build and refurbish houses.
• The Rumah Mesra Rakyat (SPNB) programme will be continued. SPNB will be asked to build 10,000 units next year.
• The government will continue to implement the Program Perumahan Rakyat by building 75,000 units of affordable houses.
• The government will identify areas in the vicinity of MRT, LRT and other public transport to be developed by PR1MA.
• The My First Home Scheme will be expanded to increase the limit of house prices from a maximum of RM220,000 to RM400,000.
• Some 500,000 will benefit from KAR1SMA, which provides assistance to poor senior citizens and children and disabled people.
• In the spirit of “People First,” all subsidies, incentives and assistance totalling RM33.2 billion will be continued.
• The government is mindful of the plight of the rakyat due to rising food prices and will take measures to address this.
• A sum of RM3,000 will be given to ex-members of the special constable and auxiliary police as well as widows and widowers.
• A special programme will be introduced for 175,000 army personnel who are not eligible for pensions.
• Civil servants will be offered tuition fee assistance for part-time studies, including 5,000 masters and 500 doctoral scholarships.
• Starting next year, the annual increment for civil servants will be increased between RM80 and RM320 according to grades.
• Budget 2012 will transform the civil service to be dynamic and responsive, introducing changes to remuneration and recruitment.
• About 600,000 government pensioners will benefit from an additional annual pension increment of 2%.
• The government will extend the compulsory retirement age from 58 to 60 to optimise civil servants’ contribution.
• Private schools registered with the Education Ministry will be given incentives including an Investment Tax Allowance.
• The government will expedite tax exemption approvals for educational institutions and all places of worship.
• To encourage private sector human capital development incentives including a double deduction on scholarships will be offered.
• A Rural Transformation Programme will be introduced so that rural areas can attract private investment and create employment.
• The government will expand the programme to supply clean water to the rural community in Sabah by RM50 million.
• Some RM400 million will be provided to upgrade the water supply infrastructure in selected Felda areas.
• To provide greater access to bank services for the rural population, Bank Simpanan Nasional will appoint agents in rural areas.
• Felda GVH will be listed on Bursa Malaysia by mid-2012 to raise funds for the company to become a global conglomerate.
• Felda settlers are expected to receive a windfall and the amount will be announced before listing.
• A RM2 billion syariah-compliant SME Financing Fund managed by selected Islamic banks will be established in 2012.
• A RM100 million SME Revitalisation Fund offering loans up to a maximum of RM1 million for entrepreneurs will be available from January 2012.
• Full exemption of import duty and excise duty on hybrid cars and electric cars will continue to be given until 2013.
• RM1 billion will be provided through a special fund for the construction, improvement and maintenance of schools.
• RM50.2 billion will be allocated to the education sector so that it can continue to develop talented, creative and innovative people.
• Payments for primary and secondary education will be abolished.
• In 2012, private investment is forecast to climb 15.9%, supported by foreign and domestic investment.
• GDP in the first six months of 2011 was 4.4%, driven by strong domestic consumption.
• In 2011, the economy is forecast to grow by 5-5.5%.
• The Kuala Lumpur International Financial District will be developed, with incentives including income tax exemptions for firms.
• The Treasury Management Centre will be established and offer incentives to develop Malaysia as a competitive financial centre.
• RM978 million will be allocated to accelerate the development in five regional corridors.
• RM13.6 billion has been allocated for the social sector, including education and training, welfare, housing and community development.