PAKATAN Harapan has proposed an alternative budget that allocates slightly more for development and less deficit than Barisan Nasional’s previous budget.

The opposition pact has proposed a budget of RM258.52 billion for 2018, less than the RM260.80 billion in the ruling BN budget for this year.

It also has, among others, promised to abolish the goods and services tax collection (GST), end highway tolls and save RM20 billion by cutting wastage and corruption.

It also proposed raising the minimum wage rate to RM1,500 and providing free education at public universities.

About 23% of the proposed budget is being allocated to development while 77% is for operating costs. In comparison, BN sets aside 20% for development and 80% for operating expenditure.

PH’s proposed budget projects a deficit to gross domestic product (GDP) of 2%, lower than the 3% of BN’s Budget 2017.

In terms of revenue, PH expects to collect less taxes from individuals but more from companies in 2018. PH will collect RM32.79 billion while BN is projected to collect RM35.88 billion in personal income tax.

However, PH estimates that it will collect RM85.96 billion in taxes from firms compared with BN, which is projected to collect RM83.15 billion.

PH’s budget document states that the higher collection in corporate tax is expected to be one of the results of a consumption boom after GST is eliminated.

“We will direct the Inland Revenue Board (IRB) to ease up on raids on the rakyat, thus resulting in a smaller income tax revenue of RM3.09 billion,” the document said.

“We are aware that in these difficult economic times, it would be heartless and unconscionable to squeeze more money from individual taxpayers.”

PH also expects to make less money from foreign worker levies due to its plan to reduce the intake of migrant labourers in the manufacturing, services and construction sectors.

During a press conference, Kelana Jaya MP Wong Chen, who headed PH’s budget drafting committee, said the proposals in the budget will form the core of the coalition’s economic manifesto for the 14th general election.

Other proposals of the alternative budget include:

* Making payments under the People’s Aid Scheme (BR1M) conditional on doing something positive and ensuring that the funds are not spent on frivolous items.

* Higher Education Loan Fund (PTPTN) borrowers only need to start paying back their loans once they earn above RM4,000 a month.

* Slashing the budget for the Prime Minister’s Department from the current RM20 billion to RM8 billion.

* Bringing back fuel subsidies from cars and motorcycles below 1,000cc.

* Giving 20% oil royalty to Sabah, Sarawak, Kelantan and Terengganu.

* Incentives for small and medium enterprises that want to develop technologies that are part of the fourth industrial revolution, such as robotics and artificial intelligence.

* Making it illegal to discriminate against female job applicants due to their marital status or pregnancy. Maternity leave to be increased to 120 days from the current 90 days.

* Passing laws to institute equal pay for men and women.

* Creating a two-tier government contracts programme for Bumiputera entrepreneurs to encourage competition and prevent opportunities from being hoarded by a few.

* A special fund to increase the equity share of Indian Malaysians and a separate fund to nurture Indian entrepreneurs. 

With these increases, PH expects to further reduce the loss of revenue from scrapping GST from RM25.50 billion to RM14 billion.

If it comes into federal power, PH says it can save RM20 billion in operating costs by cutting down wastage and corruption.

From its calculations, about RM160 billion spent in the government’s budget each year is susceptible to wastage and misappropriation, said Wong Chen.

“Based on the Auditor-General’s report every year, the amount of wastage and mismanagement totals between 10% to 15%, or an average of RM20 billion,” said Wong Chen.

“By carrying this out, we will not only be able to completely cover the revenue loss from the elimination of GST, we will, in fact, record a surplus of RM6 billion.” – October 25, 2017.