PUTRAJAYA has issued sweeping measures to save costs in a Treasury circular to all government departments, state governments, statutory agencies and subsidiaries.

These range from ensuring procurements are sourced locally, economy-class travel for official business, and rules to cut costs when organising official functions.

The circular, Garis Panduan Penjimatan Perbelanjaan Awam, is dated July 14 and was issued by the Finance Ministry’s Treasury Secretary-General Asri Hamidon to the secretaries-general of all ministries.

“The controlling officer (secretary-general) must closely monitor every expenditure and must always remind officers that a surcharge can be imposed on them if they do not abide by the guidelines and conditions stated in this Treasury Circular, and with other existing regulations on financial management.

“State governments, state government agencies, federal statutory bodies and local authorities are also to use these cost-saving guidelines as listed in this circular,” Asri said in the document sighted by The Malaysian Insight.

Explaining the rationale, Asri said the government has spent RM530 billion on Covid-19 recovery measures to stimulate the economy throughout the pandemic.

Although this is beginning to bear fruit, with 3.1% economic growth in 2021 and 5% growth in the first quarter of this year, there is still plenty of uncertainty and geopolitical instability that will affect inflation and future economic prospects.

The government has also been spending more on subsidies for fuel, cooking oil and chicken, and has recently decided not to raise electricity tariffs, which adds to the federal subsidy bill.

“(All this) contributes to the increase in government expenditure. Spending on assistance and subsidies is projected to be RM77.7 billion (this year) compared with the RM31 billion that was approved in the national budget for 2022.

“As such, the government has to implement cost-saving measures to support part of the increased expenditure on subsidies, for the sake of the people,” said Asri. – July 15, 2022.