Funds boost for BN MPs an act of desperation, says Anwar

 Source by: The Malaysian Insider

 By Shannon Teoh

June 12, 2012

KUALA LUMPUR, June 12 — Barisan Nasional’s (BN) latest allocation of over RM200 million for its MPs to plough into their constituencies despite Datuk Seri Najib Razak’s pledges to rein in the deficit betrays the prime minister’s desperation ahead of federal polls, says Datuk Seri Anwar Ibrahim.

With Putrajaya admitting it is unlikely to meet GDP growth projections this year, leading to a larger budget deficit, the opposition leader took aim at the Najib administration, saying the move to hand each BN federal lawmaker RM1.5 million was “not proper.”

“The PM also said they can spend in cash, giving up to RM5,000 to their constituents. This is not proper,” the PKR de facto leader told a press conference.

 “They are not concerned about financial regulations, they don’t care about finances,” Anwar (picture) said of the move, which comes on the back of Najib revealing a repeat of Bantuan Rakyat 1 Malaysia (BR1M) cash handouts to low-income families, which cost RM2.6 billion, was on the cards.

The Malaysian Insider reported earlier today that the BN MPs were handed the allocation at yesterday’s BN pre-council meeting for the current parliamentary sitting as the Najib administration looks ahead to polls after September’s budget announcement.

Although Najib was earlier speculated to dissolve Parliament this month for a July election, he announced that he would be tabling next year’s budget on September 28 and that there was a possibility of another handout to low-income families under BR1M.

The RM500 paid out to nearly five million families at a cost of RM2.6 billion earlier this year saw his approval ratings shoot up to 69 per cent, largely due to a surge among poorer households.

But the aftermath of violence that erupted between police and demonstrators at the April 28 Bersih rally for free and fair elections saw the BN chief’s popularity slide to 65 per cent last month.

The Umno president said late last month the government will ensure that Malaysia’s debt will not exceed the statutory ceiling under the Loan (Local) Act and Government Funding Act due to its prudent management of the nation’s finances.

Najib, who is also finance minister, said his administration has also taken steps to rein in the fiscal deficit, which dropped to 4.8 per cent last year from a 22-year high of over seven per cent in 2009.

But Malaysia’s slowing economy, which recorded a third consecutive quarterly dip in growth to 4.7 per cent in the first three months of the year, off-track from earlier projections of up to six per cent growth for the year, has raised doubts over Putrajaya’s ability to keep spending in check.

Analysts have warned Malaysia to brace for a significant slowdown here due to rising linkages with top trade partners including China, the world’s second-largest market, which economists say is headed for a sixth consecutive quarterly drop in growth with worse to come.

A Greek exit from the euro zone, which is a growing threat, would cause a second recession in as little as four years in Malaysia as the knock-on damage to Europe poses a threat to the global economy, Bloomberg reported analysts and economists as saying recently.