AUSTERITY DRIVE WON'T CURE THE DEFICIT

The Edge
16/2/2010

AS the 15% cut in the government's operating expenditure under Budget 2010 begins to bite, the groaning from those at the receiving end is becoming more audible. Cuepacs, the umbrella organisation of civil service unions, told an online news site last week it had learnt of cutbacks in overtime, the releasing of contract staff and a reduction of training activities and expenses, among other things.The pain is being felt in schools too, and here the austerity measures are more disturbing. Early this year, Deputy Education Minister Datuk Dr Wee Ka Siong said that as a result of a 20% reduction in his ministry's allocation, it had to slash subsidies to students. A blog on education matters recently sounded off about students in boarding schools being encouraged to go home during the weekends, cuts in food subsidies and in the supply of uniforms, while landscaping contracts remained unscathed.Multiplied across the social goods and essential services, including the food, health, housing and transport sectors, the impact of the budget cuts is by no means trifling. The question is, could these measures have been avoided?Surely, it would make more sense to scrutinise public expenditure to identify non-essential big ticket items, improve project management and plug leakages, which are the lessons the auditor-general repeats ad nauseum in his annual reports to parliament.The opportunity cost of national oil company Petronas' sponsorship of Malaysia's F1 ambitions is a case in point. Another classic is the award of the contract to build the RM628 million Matrade Exhibition and Convention Centre, which will be Malaysia's largest, in exchange for a 62.5-acre parcel of land in Mont'Kiara. That such a huge development can be awarded without an open tender being called is eyebrow-raising, to say the least, especially when the land was valued at RM197 million, several times lower than estimates by established real estate firms.The apparent disconnect between national projects such as these and the people's basic needs becomes resolved when it is remembered that the current political system is being driven by patronage, which means that leaders who cannot dispense contracts to their supporters will quickly find themselves out in the cold. This is now so widely acknowledged, including by Barisan Nasional leaders, that there is no point keeping up the appearance of denial any more.What is left is for the nation to begin anew, so that the culture of money politics is extinguished before it drains the economy of the vitality left in it. That would take an act of great political courage, since it would probably spark a revolt among the ranks. In other words, it would virtually amount to political suicide for whoever dares to bell the cat.However, such an act would surely amount to true service to the nation, wouldn't it?