Thailand
Malaysia: Cost-cutting measures welcomed but more needs to be done
PETALING JAYA: The Government has embarked on a cost-cutting spree following its latest move to disband several agencies and cut the salaries of ministers by 10%.
Apart from these measures, the new administration will also review the country’s mega-projects, with the possibility of them being scrapped.
Experts have hailed the move intended to reform the federal government expenditure, but added that more needed to be done.
At a press conference yesterday, Prime Minister Tun Dr Mahathir Mohamad announced the dissolution of a number of government bodies – the Special Affairs Department, Land Public Transport Commission, National Council of Professors, as well as the Federal Village Development and Security Committee.
Speaking with StarBiz, Sunway University Business School professor of economics Yeah Kim Leng described the cost-cutting measures as “the right move”.
According to him, there is much room for reduction in unnecessary government expenditure, particularly operating expenditure. He added that it was timely to streamline the federal government structure.
“The measures announced by the Prime Minister are essentially part of the fiscal consolidation move. Given the improvement in Malaysia’s economic growth currently, particularly the expansion in private-sector activities, the Government may start to cut back on its expenditure.
“With its move to scrap the goods and services tax and at the same time reduce government expenditure, the new government can be seen as shifting towards reducing the tax burden and alleviating the rising cost of living faced by Malaysians,” said Yeah.
Meanwhile, Asian Strategy and Leadership Institute research and business development director Lau Zheng Zhou said the Government must restructure the country’s public agencies, on top of cutting ministers’ salaries and disbanding agencies.
“Cutting ministerial pay is setting a good example and a clear signal of what is to be expected. However, it is too early to comment on the effectiveness of the new government’s measures, as we have yet to see clarity in policy direction.
“It is worth noting that the Pakatan Harapan manifesto shows a shift to the left, which usually entails higher public spending, not the other way round,” he said.
Source: https://www.thestar.com.my/business/business-news/2018/05/24/costcutting-measures-welcomed-but-more-needs-to-be-done/#vG4RDyHyBeYzELx2.99