The newly installed Malaysian Cabinet announced a slew of cost-cutting measures yesterday to curb government spending, as it grapples with a huge debt left behind by the previous administration. Ministers will take a salary cut and several non-essential and political government agencies will be shuttered.
"Our total debt is RM1 trillion (S$338 billion). We want to find ways to reduce this. We want to downsize," Prime Minister Mahathir Mohamad told a news conference. Earlier, he chaired his first weekly Cabinet meeting since returning to office 15 years after his 2003 retirement.
The ministers would also take a pay cut of 10 per cent, said Tun Dr Mahathir, though this will not be the first time for the Cabinet.
"We are concerned about the country's financial problems. We find that ministers' salaries are lower than (that of) high-ranking civil servants. (But) we will reduce ministers' salaries by 10 per cent," he said.
"When I was first appointed PM way back in 1981, the first thing I did was to cut the salaries of ministers and senior civil servants."
The Prime Minister of Malaysia makes RM22,826.65 a month, while a minister earns a monthly salary of RM14,907.20.
Dr Mahathir said he would be shutting down the Land Public Transport Commission, which led negotiations with Singapore for the high-speed rail project under the previous government, among other roles, with its tasks handed over to the Transport Ministry.
The government is also shutting down other bodies that played political roles for the previous Barisan Nasional (BN) administration.
They include the government's propaganda unit called Special Affairs Department (Jasa), the National Council of Professors that groups academicians, the Federal Village Development and Security Committee, Residents' Representatives Committee and the Malaysian External Intelligence Organisation.
Jasa was allocated a generous RM30 million in the 2018 Budget and has often been criticised by Dr Mahathir's Pakatan Harapan coalition as being the attack dog of BN.
Dr Mahathir was also asked about the roles played by Pemandu (Performance Management and Delivery Unit), the National Innovation Agency and MaGIC (Malaysian Global Innovation and Creativity Centre).
"Most of these institutions are not actually part of the government and are supposed to 'advise' the government. All these will be disbanded," he said.
Dr Mahathir's first actions as Premier are being watched closely by Malaysians as public expectations are high for the new Cabinet, especially with the revelation that the national debt totalled RM1 trillion, larger than what was previously reported by ousted prime minister Najib Razak.
The new government is expected to save around RM500 million annually following the closure of the government agencies, which affects an estimated 3,000 staff, reported the New Straits Times online news, quoting economic expert Barjoyai Bardai.
Analyst James Chin of the University of Tasmania's Asia Institute said the measures taken by Prime Minister Mahathir showed that he was serious in reducing the national debt.
However, he added that the government still needed to trim the civil service, which at 1.6 million employees is seen as bloated.
Dr Mahathir also addressed an issue that has been raised by BN leaders, with the new government terminating the contracts of some 17,000 contract workers appointed by the Najib administration.
Dr Mahathir said these were "political appointees" of the previous government, but added that those who work in essential services or are lowly paid will be retained.