Pakatan Harapan releases first 100 days fiscal reforms

PETALING JAYA: Pakatan Harapan will embark on fiscal reforms in its first 100 days in office to achieve sustainable investment climate and economic growth, should it come to power after tomorrow's polls.
The opposition coalition's president council said in a joint statement that it is fully committed to undertaking responsible and progressive fiscal reforms which is to be implemented in an orderly, transparent and systematic manner to enhance fiscal equity, transparency and accountability, as well as to support accelerated productive investments and economic growth.
"Pakatan Harapan is mindful of the dire state of the federal government's fiscal situation and will undertake an evaluation of the responsibilities, commitments, expenditures and liabilities in relation to its revenue, assets and income of the government in the first 100 days of its administration in order to achieve greater fiscal responsibility," it said.
Subsequent reforms will seek to ensure fiscal conduct that is more sustainable, inclusive and growth enhancing. This will, in turn, seek to improve the investment climate, reduce the cost of living and doing business, raise national competitiveness and promote greater economic prosperity," it added.
The three key areas of review will be the federal government budget and finances comprising of both expenditure and revenue; accrual accounting and asset-liability management and outstanding government debt obligations, including government guaranteed debt, especially foreign obligations.
Pakatan Harapan added that it will also come up with a comprehensive reform plan which will put the country back "on a path of sustained prosperity for all Malaysians" at the end of the first 100 days.
Some of the touch points of the fiscal reforms are as per the following:
Expenditure:
i. Review all major public projects, especially those financed outside of the development budget, and related contingent liabilities.
ii. Review incurred future debt-related operating expenditure commitments.
iii. Reprioritise publicly funded projects responsibly.
iv. Shift expenditure allocations to prioritise general well-being, including social protection for the disadvantaged.
iv. Ensure government procurement by open tender.
Revenue:
i. Assess the entire revenue base of the federal government to improve its breadth, responsiveness and progressiveness.
ii. Improve accountability of state-owned enterprises and other public assets to enhance efficiency, accountability and revenue contribution.
Deficit and liabilities:
i. Reduce borrowing and restructure liabilities to ensure greater fiscal sustainability.
ii. Fully account for federal government liabilities – both direct and contingent liabilities incurred via government guarantees.
Inter-governmental (federal-state-local) fiscal relations:
i. Restructure federal-state-local government relations to more equitably share revenues and costs of providing public infrastructure and services. In this regard, special consideration will be given in the spirit of the constitutional commitments made in the 1963 Malaysia Agreement to Sabah and Sarawak.
Accrual accounting and asset-liability management:
i. Adopt accrual accounting to better take stock of federal government's assets and improve the asset-liability management framework that would identify mismatches and risk.
Sovereign risk and capital market management:
i. Evaluate and consider better market instruments to manage liquidity and price sovereign risks more effectively. The treasury function of the federal treasury will be enhanced and the pricing of government-guaranteed liability improved.
In addition to that, Pakatan Harapan said that it will be guided by "captains of the industry", which includes a former president of Petronas, a successful Hong Kong-based tycoon, respected former senior civil servants, and economists — for the formulation and execution of the reform plan.
"Malaysia is blessed with a hard-working and talented workforce, good infrastructure and abundant resources. Irresponsible fiscal policy conduct since 2009, and steady erosion of the quality of our institutions have set the country back. The time for progressive change, not a witch hunt or retribution, is long overdue," it noted.