KL Budget seeks to woo BN voters with giveaways

Malaysian Prime Minister Najib Abdul Razak (right) speaks to members of the Parliament during the 2017 Budget presentation at the Parliament House in Kuala Lumpur, Malaysia, on Oct 21, 2016.
Malaysian Prime Minister Najib Abdul Razak (right) speaks to members of the Parliament during the 2017 Budget presentation at the Parliament House in Kuala Lumpur, Malaysia, on Oct 21, 2016.PHOTO: EPA

Given strain on coffers, measures are targeted at boosting ruling coalition's odds at the polls

Cabby Kamarudin Zubir will be getting more cash from the government and possibly will not have to pay rent for his taxi, thanks to a discount on a new car under Budget 2017, unveiled on Friday. 

"At least now I can breathe," said Mr Kamarudin, 69, who plies the roads of Petaling Jaya, Selangor.

Like many other Malaysians, Mr Kamarudin has been complaining about a slowing economy and the rising cost of living.

With Malaysia heading for a general election, grateful voters - especially in a country still used to patronage - are always a boon to the incumbent government.

Still, given the strain on government coffers, Friday's Budget was not littered with freebies for all and sundry like previous ones.

SWEETENERS FOR VOTERS

The Budget aims mainly to hit the right button in terms of ameliorating suffering. The government still exerts a heavy hand in the economy. Paternalism and lingering feudalism would dictate that many people, especially civil servants and rural folk, would thereby be thankful to the incumbent government and vote accordingly.

DR OH EI SUN, a senior fellow at the S. Rajaratnam School of International Studies, on the Budget measures being aimed at boosting PM Najib's chances in the next general election.

Instead, Prime Minister Najib Razak, who is also Finance Minister, announced a slew of giveaways and incentives aimed at sweetening the traditional vote banks of the ruling Barisan Nasional (BN) coalition.

Analysts believe the targeted measures will boost Datuk Seri Najib's chances in a general election due by August 2018, but widely expected to be held next year.

"The Budget aims mainly to hit the right button in terms of ameliorating suffering. The government still exerts a heavy hand in the economy. Paternalism and lingering feudalism would dictate that many people, especially civil servants and rural folk, would thereby be thankful to the incumbent government and vote accordingly," Dr Oh Ei Sun, a senior fellow at the S. Rajaratnam School of International Studies, told The Sunday Times yesterday.

From civil servants - who number over 1.6 million - to taxi drivers, preachers and planters, these demographics are largely made up of Muslim Malays. Their influence on national elections far outweighs their share of the population, thanks to a bias in electoral maps towards rural areas dominated by the ethnic majority.

Winning more of the bumiputera (a term encompassing Malays and aborigines) vote was key to Mr Najib controlling nearly 60 per cent of Parliament despite taking only 47 per cent of the popular vote.

Moreover, critics say, new electoral boundaries, unveiled last month and due to be gazetted early next year, will pave the way for Malay voters to swing even more seats.

Malaysia has seen decades of expansionary budgets, thanks to oil-related revenues, which made up nearly half the treasury a decade ago. But the 2014-2015 oil price crash sent the net petroleum exporter reeling, forcing both last year's and this year's Budgets to be revised downwards.

While 2008 and 2013 - the two years that elections were held - saw spending increase by 11 per cent and 8 per cent respectively, 2017 will see only a modest 3.4 per cent rise. The 2008 and 2013 Budgets also included broader measures, such as the easing of income tax, free schooling and even the suspension of property gains tax, which benefits wealthier Malaysians.

The giveaways this time are far more specific. Civil servants will get loans to buy smartphones and bigger loans for motorcycles and homes. Financing aid for bumiputera entrepreneurs will see an injection of over RM1 billion (S$333 million) from the government, while Islamic preachers, mosque workers and Islamic education are also receiving more. 

Cabbies can get RM5,000 grants to buy their own cars instead of shelling out close to RM1,000 annually to rent a taxi. Rubber tappers and padi farmers, too, can look forward to allowances and subsidies worth nearly RM2 billion. 

Even infrastructure is now targeted at rural areas, including RM55 billion for a new East Coast Rail that will connect the Klang Valley to states with up to 90 per cent Malay populations.

All these are aside from the up to 20 per cent increase in cash handouts via the BR1M, or 1Malaysia People's Aid scheme, for over seven million recipients, most of them Malays who make up most of the lower-income groups. This will cost the government RM6.8 billion.

A version of this article appeared in the print edition of The Sunday Times on October 23, 2016, with the headline 'KL Budget seeks to woo BN voters with giveaways'. Print Edition | Subscribe