Of the 10 election pledges that it promised to fulfil in its first 100 days, the Pakatan Harapan government tick off two items on the list while six others are in progress. Two promises have not been met yet, after discovering that more time, funds and assessments are needed to ensure their feasibility. In the run-up to the 100 days on Friday, let’s take a look at how the government is faring in keeping its 10 promises.
Abolish GST was fulfilled. GST was zero rated on June 1, fulfilling this key promise, and the bill to repeal the GST Act was passed in the Dewan Rakyat last week. The sales and services tax (SST) comes into force on September 1 at 6% for services and 10% for sales. It was unclear at first whether the prices of goods and food at popular eateries like Indian-Muslim restaurants would increase due to SST. This was until Finance Minister Lim Guan Eng said the earning threshold for restaurants and eateries would be raised from RM500,000 a year to RM1 million before they could charge SST. There are still concerns that the SST allows profiteering by unscrupulous businesses as it is a less transparent tax than the GST, despite theoretically benefiting the consumer by being a single-stage tax instead of a multi-stage one like the latter.
Putrajaya said SST effectively “returns” RM23 billion to the people in uncollected tax – a little more than half the revenue it would have collected with GST. This also means the government will have less revenue, a point raised by the opposition to warn of a widening budget deficit and the unreliability of oil prices. On the other hand, Stabilise price of petrol was also fulfilled. Putrajaya has fixed the pump price for RON95 and diesel at RM2.20 and RM2.18 per litre, while RON97 is floated on a weekly basis. This has been done by setting aside RM3 billion until year-end to finance the subsidy and fix the price for the first two fuels. Meanwhile, Abolish Felda settlers’ unnecessary debts has yet to be fulfilled. Putrajaya said on July 30 it was still looking at revising interest rates on the debts. Economic Affairs Minister Mohamed Azmin Ali said Felda faced a critical cash flow problem and the government would present a white paper in the next parliamentary session to explain Felda’s real debt situation and its rehabilitation plan.
Before settlers’ debts can be address, the government would have to focus on improving cash flow by restructuring Felda’s loans, which stand at RM8 billion, Azmin said. The agency may also look at selling certain non-strategic assets, such as properties abroad. As for the EPF for homemakers, it is still in progress. Housewives without a fixed income would get 2% of their husband’s 11% contribution to the Employees Provident Fund. The government would contribute RM50 but only for first wives of Muslim men. The implementation of the policy is now being fine-tuned by EPF and the Social Security Organisation (Socso), as it involved amending certain existing laws and policies, Deputy Prime Minister Dr Wan Azizah Wan Ismail said recently. Meantime, equalise minimum wage and increment is in progress. The minimum wage will be increased in stages, Human Resources Minister M. Kulasegaran said.
The government was supposed to have finalised the rate for the initial stage of increase at the cabinet meeting on August 10 but, to date, no announcement has been made. Postpone repayment of PTPTN loans for graduates earning below RM4,000, abolish blacklisting policy is also in progress. The government has fulfilled one part of the promise, which is to abolish the immigration travel blacklist, removing the names of more than 400,000 defaulters. However, Putrajaya is still looking for ways to defer loan repayments for those earning below RM4,000. One of its first steps has been to identify those in this category and it recently concluded an information updating exercise on borrowers’ income levels. The pledge is controversial and highly debated, with critics saying deferring the loan repayments would harm the National Higher Education Fund Corporation’s finances and ability to give loans to new students.
In the meantime, Royal Commissions of Inquiry into 1MDB, Felda, Mara and Tabung Haji was already partially fulfilled. The government did not form a RCIs for these cases but where 1Malaysia Development Bhd is concerned, has charged former prime minister Najib Razak with a total of seven counts – three for criminal breach of trust, three for money laundering, and one for abusing his position. All charges pertain to receiving RM42 million from a former 1MDB unit, SRC International Sdn Bhd, between 2014 and 2015. Also related to 1MDB is the government’s seizure of the RM1 billion superyacht, Equanimity, owned by Najib’s associate Low Taek Jho. Low allegedly bought the yacht with funds stolen from the state investment firm. The government is restructuring Mara, looking to spread out its different roles under separate ministries, and is probing Felda’s debts. Another promise which is still in progress is the Cabinet committee to enforce Malaysia Agreement 1963. Putrajaya has formed a special cabinet committee on MA63 tasked with producing a report in six months on various matters pertaining to the rights of Sabah and Sarawak. These include administrative matters of devolving federal powers to allow for greater state autonomy, the amount of federal money granted to them and their rights to returns from oil and gas resources.
De facto law minister Liew Vui Keong said the committee will include members of the opposition. The issue of oil royalty returns to Sabah and Sarawak is particularly contentious, as the PH manifesto had promised “20% or of its value equivalent”, but there is now dispute whether this should be calculated based on net profit instead of gross production. Under the Petroleum Development Act, calculations are based on gross profit, not net profit. Paying 20% would have serious implications for Petronas’ financial status and the federal government, said Azmin. With regards to the promise of RM500 health scheme for B40 group, it has not been fulfilled yet. The promise is to roll out the scheme, successful in PKR-run Selangor, nationwide. It would put RM500 in the hands of the lower-income group to get basic medical treatment at private clinics. So far, the Health Ministry has formed a task force to set the steps in place for a nationwide rollout. Health Minister Dr Dzulkefly Ahmad said the task force consists of experts who managed the scheme for Selangor.
Lastly, review of mega-projects awarded to foreign countries is currently in progress. Among the projects shelved pending a review to lower costs are the East Coast Rail Link (ECRL), Kuala Lumpur-Singapore high speed rail (HSR), Mass Rapid Transit circle line project (MRT3) and the LRT Line 3. These projects are also mentioned under Pakatan Harapan’s promise No. 29 in its manifesto on enhancing transparency and integrity in the national budget and the budgeting process. Pakatan Harapan accused Barisan Nasional and Umno of setting up various special purpose vehicles (SPVs) to hide certain expenditures and prevent the public from knowing the country’s real financial status. With its announcement that the national debt stands at RM1 trillion, the government is trying to renegotiate terms and costs with China and Singapore on the mega-projects. In the case of the ECRL, RM20 billion had already been paid to Chinese companies.
The Finance Ministry also suspended the Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP) projects which were being built by Chinese state-owned company China Petroleum Pipeline Bureau. This follows the discovery of lopsided terms that saw more than 80% of the total projects value of RM9.4 billion being paid out, even though only 13% of the work was completed.