Govt’s ETP shifts into high gear, nears GST reality

KUALA LUMPUR: Malaysia's Economic Transformation Programme shifted into higher gear with the government’s six Strategic Reform Initiatives (SRI) to boost its global competitiveness while also looking to boost the government’s revenue via the goods and services tax (GST).

The six SRIs are Public Finance Reform; Government's Role in Business; Human Capital Development ; Public Service Delivery ; International Standards & Liberalisation and Narrowing Disparities for Bumiputera SMEs.

Prime Minister Datuk Seri Najib Tun Razak will takr the lead for two SRIs -- Public Finance and Government’s Role in Business. In the Public Finance SRI, he will be assisted by Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah.

The Public Finance SRI aims to create RM13 billion in fiscal space and this would be realised via revenue generation and cost savings over five years when fully implemented. This would allow the government to manage contingencies, repay its debts and invest for the future.

Minister in the Prime Minister's Department Datuk Seri Idris Jala said to reform the public finance, the government was working on the implementation of the GST.

Based on the GST rate of 4%, he said the government would get additional revenue of RM6 billion and at 5%, the government would rake in RM10 billion.

“For all the essential items such as sugar and flour, we will make sure those things are exempted of GST," said Idris, who is Performance Management and Delivery Unit (Pemandu) chief executive officer.

He was speaking at the seventh Economic Transformation Programme (ETP) update here on Tuesday, July 5.

On the government's role in business, Idris said there was a view the government should stay true to just govern, instead of crowding out in the business sector.

Hence, the government would now play a facilitative role in business, as opposed to being a significant investor to ensure greater liquidity in the capital market.

For that purpose, the government had identified 24 GLCs to either be listed on the bourse, pared down or eventually be sold off.

"We have started this initiative with Malayan Sugar (MSM Holdings Bhd) and we will continue to list several other GLCs... The government has got the commitment from the ceos of glcs to pare down their holdings in the companies once it reaches certain market price," said Idris.

Deputy Prime Minister Tan Sri Muhyidddin Yassin and Minister of Human Resources Datuk Dr S. Subramaniam will lead the Human Capital Development SRI.

The Chief Secretary to the Government Tan Sri Sidek Hassan will lead the Public Service Delivery SRI, while International Standards & Liberalisation SRI will be led by three Ministers namely Datuk Seri Mustapa Mohamed, Datuk Seri Ismail Sabri Yaakob and Datuk Seri Dr Maximus Ongkili.

Tan Sri Nor Mohamed Yakcop will be in charge in the Narrowing Disparities focusing on Bumiputera SMEs.

According to Idris Jala: "A total of 500 lab members fron the public and private sectors took part in six SRI labs over six weeks. PEMANDU now have 13 reports amounted to 3,000 pages containing detailed recommendations and policy changes which are anchored on the economy coupled with fiscal discipline.”