THE government is not cash-strapped, it is just wasteful in its spending, economist Muhammed Abdul Khalid said.

He told The Malaysian Insight that money has been squandered on things that are not beneficial to the people.

“We have the ability to give out assistance. The problem is not the lack of funds, but the poor management of funds,” Muhammed said.

“We’ve been told that we have no money but then they are spending millions to renovate the prime minister’s residence? And they have money to pay the salaries of the bloated ministers and advisers?” he asked.

He was referring to the more than RM30 million spent on renovation works on Seri Perdana, which the government said was necessary as the prime minister’s official residence had become dilapidated over the years.

Muhammed said if the money was instead spent on the lower income group, it would create a positive spill over effect on the economy and, in turn, the people’s overall wellbeing, as they would spend on important items or in their businesses.

“The problem is that the (government) is spendthrift, and, at the same time, does not know how to collect revenue (through new taxes or the auctioning of spectrums),” the DM Analytics managing director said.

On increasing national debt levels, he said even developed countries such as Japan and the United Kingdom have high national debts, but what sets them apart is strong fiscal discipline.

“The problem with us is the lack of transparency. We do not know what the government is borrowing for, how the money will be spent. All we know is that the rakyat has to pay for it,” he said.

“There are perceived to be lots of leakages and corruption.”

He said borrowing is not an issue as long as it is used as an investment to generate returns and is beneficial for the country.

“To eradicate corruption, we need transparency. We do not even know how much the vaccines (Covid-19) cost and what the Covid-19 fund is being used for,” Muhammed said.

As for the upcoming Budget 2022, which will be tabled in Parliament on October 29, he said the focus should be on assisting the people and spurring economic recovery.

“First of all, it should not be like last year’s budget. Little aid was given and the priorities were misplaced,” Muhammed said.

Bonuses were given to civil servants during the pandemic and JASA (Special Affairs Department) was given an allocation of RM80 million.”

The government should instead focus on alleviating the burdens of low-income groups, the self-employed and struggling employers.

He said Putrajaya should not be frugal when it comes to spending on the people as it would generate good economic returns.

“Being wasteful will only benefit certain people but not the needy,” Muhammed added. – October 15, 2021.