Budget 2015: Are civil service bonuses justified?

By admin-s Last updated Oct 6, 2014

(TMI) – There were five counter workers that I saw but they were all glued to a television screen in their office.

The bonus for civil servants announced in the annual Malaysian federal budget no doubt brings cheer to the public sector, but raises questions on its validity and sustainability amid concerns that the government machinery needs to be trimmed.

If bonuses are a reward for good work, has the civil service on the whole done a good enough job? Could not more public funds be diverted to infrastructure, technology and research? And is the Malaysian civil service of 1.5 million workers, really as bloated as it is perceived to be?

In interviews with an economist, civil servants and those who have left the service, The Malaysian Insider discovered that the more important question was not how much, but which areas to trim, and also whether people will be willing to bear the consequences of a leaner public sector.

More on operations, less on development

The numbers say it all. More and more public funds are going to the business of maintaining government machinery and services than to development.

According to Universiti Malaya (UM) economist Dr Lee Hwok Aun, Malaysia spent 33% of its budget on development just over a decade ago. Today, it is spending 20% on development.

It was 33% between 1998 and 2001 before dropping to 26% in 2002-2008, to 23% (2009-2011) and finally to 20% (2012-2014).

“Less and less of our public spending is going toward new infrastructure, capacity and technology,” Lee said.

For the past three years, the amount of money spent on paying salaries of civil servants equalled and then surpassed the amount spent on development, according to documents from the Finance Ministry.

In 2012, RM52 billion was spent on salaries and wages for civil service servants or “emolument”, versus RM51.2 billion spent on development. Emoluments made up 22% of the budget.

In 2013, RM58.6 billion, or 23% of the budget, was spent on emoluments but only RM49.7 billion was spent on development.

The amount for emoluments jumped to RM63.6 billion in 2014, or 24% of the budget. The money for development has shrunk to RM46.5 billion.

The growth in emoluments seems to coincide with a growth in the number of public sector employees.

According to UM’s Lee, from 2004 to 2012, employment in federal government per total employment grew slightly, from 9.86% to 10.04%.

“Over this period, my estimates show that federal government employment grew by 3.31% per year, while private sector employment grew by 3.05% per year.”

Public or privatised service?

So has the civil service machinery grown too big?

Stall owner Zainal Ahmad of Shah Alam thinks so. In a recent trip to a government agency counter, the businessman was left fuming when he was made to wait.

“There were five counter workers that I saw but they were all glued to a television screen in their office. No one was manning the counter. I had to call out to them to get service. I was really upset.

“Is this what the public pays for? For civil servants to watch television?”