“Unity” government has to show that it means business

Another take by Lim Teck Ghee

THE end of the year has seen speeches and promises of action providing a mixed and unclear picture of the reform policies and measures likely to be pursued by the unity government during its stint as the ruling government.

On the plus side, Pakatan Harapan (PH) chief and Prime Minister Datuk Seri Anwar Ibrahim has reiterated that his main responsibility as prime minister is taking care of the people’s welfare, not constructing grand mega buildings.

Hence, his first order of business is to help the urban poor, as well as hawkers and small traders. Well and good.

This much-neglected constituency, although sceptical from past experience with politicians, awaits with bated breath the follow-up actions to the promise.

We have also seen two measures to indicate that the new government is not planning to drag its feet on the numerous reform issues that the PH and East Malaysia parties have repeatedly drawn attention to when in the political wilderness.

Baby steps in Reformasi

The dismissal of all chairmen and board members of government-linked companies, statutory bodies and state-investment funds appointed politically with immediate effect is a positive but really very small step in curbing the patronage, corruption, mismanagement and issues of conflict of interest known to be widely prevalent in undermining the economy.

Replacement appointees should be vetted not only on their integrity and performance record, they should also be subject to greater oversight than their compatriots in the private sector.

How can the government reform the existing GLCs (government-linked companies) to ensure that they become a major contributor to the national economy rather than being an economic deadweight and fiscal drag that needs immediate cabinet review and action?

GLC governance, economic costs, financial viability and sustainability, and a host of other issues have largely been hidden from policy attention and public scrutiny.

The divestment by the government of non-performing GLCs and those that provide little value added but have instead crowded out private sector players can be a follow-up action after the removal of political appointees.

Another positive development is the announcement that the Federal Territories Ministry is being downgraded to departmental status.

Critics of the bloat in the cabinet size – in 1969 Malaysia had 19 ministers and five assistant ministers, Datuk Seri Ismail Sabri Yaakob’s cabinet had 32 ministers and 38 deputy ministers – have long complained that the large increase in the number of ministers is not unjustified and simply reflected the inclination to reward leaders of parties in the Barisan Nasional coalition.

The Federal Territories reassignment, with the reduction in the size of his cabinet to a total of 28 ministers and 27 deputy ministers, gives hope that the new prime minister and his colleagues may be prepared to tackle perhaps the biggest elephant in the treasury room – the nation’s civil service.

Can the civil service be reformed?

Currently, the emoluments of the 1.6 million civil servants together with the pensions and gratuities bill come up to nearly half of the federal government’s annual revenue. It is also the total of all personal and company tax collected.

Rightsizing the massive civil service and cutting back on operating expenditures have been advocated by the World Bank and every reputable financial service consultancy organisation that has done business in Malaysia.

Implementing a downsizing programme may be seen as too hard a political mountain to climb for some leaders.

However, the new government should not be held hostage by 1.6 million civil service workers, whose size is outnumbered by the 13.4 million worker voters in the private sector.

The latter have had their financial security needs made secondary far too long to the interests of their public sector counterparts.

It is not only the size and cost of the civil service that matters.

Just as or more important, is the quality of performance as the country’s public sector has generally received poor marks for its efficiency, accountability, transparency and impartiality, and the absence of meritocracy in its recruitment and senior management.

These concerns can be addressed and corrected with less collateral political damage than cutting back on staff numbers.

Together, the progressive and forward-looking parliamentarians of the unity government with its two-thirds majority and nationwide legitimacy can take the lead on this game-changing subject by introducing a resolution in the current or next parliamentary sitting on the establishment of a Royal Commission of Inquiry with the aim to ensure a world-class civil service by promoting its efficiency, integrity, responsiveness and morale.

Taking on inflation

Last but not least, among developments on the economic front is the call by Economy Minister Rafizi Ramli for a “collective” effort to rein in soaring inflation.

Given prominence in his speech is the disclosure that the public is partly responsible for the continued rise in food prices and rising inflation.

Hence, his advice to the lower income group is to change their consumption behaviour and avoid buying unreasonably priced goods to curb inflation.

Rafizi and his policy team are clearly not in the B40 group.

They also appear to be ignorant of how the prices of the cheapest items in the Malaysian basket of goods and services such as foodstuff and staples, manufactured goods, clothing, transportation, healthcare, etc, have increased during the last few years, many quite dramatically.

If stakeholders have been scrupulously monitoring prices or buying rice, milk, flour, cooking oil, eggs, meat, fish, vegetables, fruits and other daily necessities, they would not only be confronted by the phenomenon of recent rising prices.

They will also be mystified by the official Consumer Price Index (CPI) data, which consumers and analysts have found to be misleading in its underestimation of the pricing of goods purchased.

During the past year, the country’s CPI increased from 124 points in November 2021, to 129 points in November 2022, – a difficult-to-believe small figure.

The last four year’s CPI trend data from 2018 to 2022 – 121 points to 129 – is even less believable.

Even the economy minister is probably finding the official inflation figure of 3.3% difficult to defend, hence his concern.

However, putting the blame for the soaring inflation on consumers, small traders, kedai makanan and other voiceless or less influential groups – although making for good headlines and copy – is really scoring an own goal in dealing with this concern.

Although the critical sources of inflation need to be independently and rigorously identified, the government can take immediate action to ensure that the cost of the main food items for lower and middle-class Malaysians does not soar even higher. Some key initiatives have been contained in PH’s election manifesto, that is:

Elimination of cartels in the sectors of food and essential supplies;

Incentives to increase food and essential goods production;

Working closely with suppliers to ensure adequate food supply; and,

Tax cuts for investment in the farming sector and food production

Now the government has to show that it means business if it is to live up to its campaign promises.

Lim Teck Ghee’s Another Take is aimed at demystifying social orthodoxy.