PUTRAJAYA’S three-year plan to repair the country’s finances is on track, said Finance Minister Lim Guan Eng, who hoped the public will be patient with the cost-cutting efforts in this trying period. 

Whatever savings the government gets from reviewing supply contracts and plugging leakages left over from the Barisan National era will be immediately channelled to the people, Lim said.

His statement comes as the Pakatan Harapan government nears its first year in office and the ministry’s three-year plan to pay off massive government debts of more than RM1 trillion that had been left by the BN administration.

Lim added that as of April, his ministry had allocated an extra RM3.5 billion for aid programmes under various ministries. These extra funds were savings from renegotiating supply contracts and extra tax collections.

For instance, when the ministry saved about RM805 million in the latter half of 2018, the funds were used to increase monsoon aid for fishermen and living allowance aid for bachelors in early January this year.

Putrajaya was also able to collect an extra RM1.4 billion from the new sales and services tax (SST) from September last year till January this year.   

But on the whole, Lim said, the government has to be very thrifty with how it spends public money because it has to pay off loans by scandal-ridden state fund 1Malaysia Development Bhd (1MDB) and rescue ailing agencies like Felda and Tabung Haji. 

“I hope the people will be patient with us because 1MDB caused us huge losses. It is the same with Felda and Tabung Haji.

“We need to bear with this so that we can hopefully heal in a short time span.

“When we can, we will increase allocations to the people; when we have a little extra money, we will share it with the public.

“We are on track to fix our (financial) situation by 2022. We hope that in 2022, our financial health will be back on track,” Lim told reporters in a recent media briefing.

The new PH government received an extra RM3.5 billion in savings and increased collections because it was clean and not corrupt, unlike the BN regime it replaced, he said. 

The additional funds were above the original allocations in Budget 2019 for aid programmes such as cost of living aid and monsoon aid for fishermen.

“People were surprised as to how the extra money came about, as the ministry announced these allocations after Budget 2019,” said Lim.

“Where did the money come from? It’s because since the government is clean and isn’t corrupt, we will see savings. 

“But when we did the budget, we could not estimate how much we will save.

“When we get extra funds, we will share with the people. That is how we added more money for fishermen and bachelors.

“Last year, we thought we could collect RM4 billion from SST, but we collected RM1.4 billion more, totalling RM5.4 billion. When people have more confidence in the government, they are more willing to pay taxes,” he said.

After PH won federal power in the 14th general election last year, it set a plan to clean up all government departments and agencies as part of its pledge to stamp out corruption.

A big part of that effort involved taking an honest look at government debt that had swelled under the Najib Razak administration. 

In his first few days as finance minister, Lim revealed that the total government debt, which included money that the previous administration borrowed directly and money that it owed as guarantor, had reached more than RM1 trillion.

Lim revealed that he had hoped to shave off some of that debt with the money the government saved from reviewing contracts for mega-projects such as the East Coast Railway Link, the Singapore-KL High Speed Rail and the LRT extensions.

He had hoped to use the RM15.02 billion saved from renegotiating the LRT 3 project to pay off some of the debt but those funds had to be eventually used to save Felda and Tabung Haji, he said. 

The administration is spending RM6.26 billion to rescue Felda and RM17.8 billion to bring the pilgrim’s fund back into black. 

“I’ve been criticised. Why did I use the money to save these institutions? Why did we not share all these savings with the Malaysian people?

“I had to explain that Felda is important – it has 120,000 settler families while Tabung Haji has RM75 billion in deposits.

“So the government has to support these institutions in order to maintain (market) confidence,” Lim said. – May 5, 2019.