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Did Pakatan Harapan overpromise?
Emmanuel Samarathisa 
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Promises are not meant to be broken, at least that’s what we tell our politicians. But for the new Pakatan Harapan (PH) government, the reality of delivering 10 promises within 100 days of taking power has begun to sink in – it’s not easy keeping promises.

As the Aug 17 deadline looms, it has fallen short on many of its promises.

Critics say PH should not have made such ambitious promises to be delivered in just 100 days after winning the 14th General Election (GE14) on May 9. Was it a case of overpromising just to topple the Barisan Nasional government that had been in power for 61 years?

To be fair, PH did not know how bad the country’s debts were or the magnitude of mismanagement and corruption. As Prime Minister Tun Dr Mahathir Mohamad put it: “The more we look into the previous administration, the more bad things we find.”

There is a certain degree of uncertainty as PH tries to juggle administering a nation while fulfilling its 10 promises.

To recap, two months before GE14, PH unveiled its 60-point election manifesto that set out its policies. Compiled in a booklet entitled Buku Harapan, these promises were divided into two broad categories. The first covered 10 promises within PH’s first 100 days in government while the second group spelled out the remaining pledges with a fulfilment deadline of five years.

When the election manifesto was launched, PH drew criticism not only from its rivals but also independent voices from both sides of the political divide.

Did the coalition miss out on the important details when drafting the manifesto?

Not so, contends Rais Hussin, a manifesto drafting committee member. He says it took the team seven months to craft the document while “engaging almost all stakeholders” and using “publicly available statistics and data”.

“Obviously, since then, forensics revealed many data are camouflaged within the realm of ‘accounting acrobatics’ like the national debt level,” he tells FocusM.

Rais, who also heads Parti Pribumi Bersatu Malaysia’s political and strategy bureau, notes recalibration will require “a little more time” as some of these promises require legal amendments.

“It is the intention of the PH administration to make good on its promises as stated in the manifesto,” he adds.

With more than 90 days gone, FocusM takes a look at the execution of its main 10 promises and benchmarks these against our own PH Promises Index to gauge how the coalition has performed so far. Out of a possible 100, PH achieved a total score of 50.5.

To be sure, PH began tackling its electoral promises in a matter of days of coming into power. On May 16, Mahathir directed the government to halt GST collection and imposed a freeze on the price of RON95 petrol.

Later, Finance Minister Lim Guan Eng said RM3 bil will be set aside to ensure the prices of RON 95 and diesel were fixed for the rest of the year while the price of RON97 will be floated on a weekly basis.

The Finance Ministry also directed that GST be zero-rated from 6% effective June 1.

So within a month, PH almost fulfilled one promise. It abolished the GST while reducing the cost of living provided mixed results, therefore scoring a 9 on the Index. However a 5 is given for the coalition’s pledge to stabilise petrol prices as it has yet to implement targeted subsidies.

The government’s debt burden is breaching the RM1 tril mark. Revenue is expected to drop by RM21 bil with the abolishment of the GST, said Lim on June 1. Replacing the GST will be the sales and service tax (SST) from Sept 1, with a 6% and 10% rate for services and sale of goods, respectively.

The new tax regime can only be implemented on Sept 1 provided the BN-dominated Dewan Negara passes the SST Bill. But the abolishment of the GST should have been deferred, says Ali Salman, chief executive officer of think-tank Institute for Democracy and Economic Affairs (IDEAS).

“If there is one electoral promise that could have been delayed due to the new-found level of debt, it was GST abolishment, which will bring down fiscal resources significantly,” Ali says.

This “new-found level of debt” refers to the RM1 tril in government liabilities that was revealed by Mahathir on May 22.

“However, the government has already withdrawn it (GST),” says Ali. “In comparison, settlement of Felda settlers’ debt may still be undertaken without a major dent to the fiscal situation.”

For example, the previous government estimated that RM300 mil was needed to write off extreme levels of debt owed by Felda settlers, adds Ali.

 

Delayed promises

But the pledge to write off settlers’ debt is, at the time of writing, the only promise with almost zero progress, thereby earning a score of just 1 on the Index.

According to the latest Felda data, overall settlers’ debt stood at RM4.98 bil with liabilities consisting of loans drawn out for various purchases such as shares of FGV Holdings Bhd, home renovation and replanting schemes.

In its manifesto, PH promised to help settlers write off debts such as “home-buying debt” and “debt repayment” by using dividends earned from Felda’s investments and those of its subsidiaries.

The government is considering various ways to ease the settlers’ debt burden, said the Economic Affairs Ministry, which is looking to revise the 6.25% interest rate on Felda loans. This is “to ensure that it is fair to settlers”, the ministry said in a July 30 parliamentary reply.

At the time of writing, the ministry had yet to reply to queries from FocusM for more details on how the government plans to tackle this issue.

The other promise that received a low score is the establishment of a Royal Commissions of Inquiry (RCI) on 1MDB, Felda, Mara and Lembaga Tabung Haji (LTH) and to reform the governance of these bodies.

On the Index, this gets a 1.5 simply because no RCI has been formed. To-date, only 1MDB has been making headlines due to the government’s aggressive push to investigate the scandal.

But not all of these cases would require an RCI, says Latheefa Koya, co-founder of Lawyers for Liberty. Scandals involving 1MDB, LTH and Mara fall under the purview of the Malaysian Anti-Corruption Commission (MACC) and the police and “there is no need for an RCI”, she says.

“But as far as Felda is concerned – this may need an RCI – with a proper full mandate and terms of reference,” Latheefa says. “This is because Felda has multi-financial irregularities and has far reaching implications involving years of misappropriation.”

 

School of hard knocks

There is no denying that PH has been struggling to fulfil its promises due to legal and financial setbacks. It initially delayed five promises – targeted petrol subsidies, EPF contributions for housewives, minimum wage raise, PTPTN deferment, and a subsidised healthcare scheme – citing the country’s RM1 tril debt.

But as PH inches closer to the 100-day mark, the coalition has chipped away at some of these five deferred promises.

The introduction of Employees’ Provident Fund (EPF) contributions for housewives only scored a 4 on the Index after it ran into a legal snag as the execution hinged on amendments to Section 51 of EPF Act.

Section 51 states that no amount may be assignable, transferable, liable to be attached, sequestered, levied upon, for, or in respect of, any debt or claim whatsoever. Even the “Official Assignee” was not entitled to or have any claim on any such sum or amount.

At the time of writing, Deputy Prime Minister Datuk Seri Dr Wan Azizah Wan Ismail has announced the first phase of the Suri Incentive, a pension scheme for housewives which starts on Aug 15. The caveat here is the scheme is only eligible for those under e-Kasih, a programme for poor families.

Under this phase, members are required to save a minimum of RM5 every month while the government will match that with a monthly contribution of RM40. But this scheme is voluntary.

The twin promises to equalise the minimum wage nationally and start the process to increase the minimum wage and introduce Skim Peduli Sihat with RM500 worth of funding for the B40 group for basic treatments in registered private clinics scored a 4 and 3, respectively, on the Index.

Human Resources Minister M Kulasegaran has so far affirmed that the government will raise the minimum wage to RM1,500, implement it in stages and equalising it nationwide. At the time of writing, Kulasegaran has said the government will finalise the rate increase on Aug 10.

As for the subsidised healthcare scheme Skim Peduli Sihat, Health Minister Dr Dzulkefly Ahmad formed a taskforce on July 5 to work on a framework to implement the scheme.

It is worth noting that Skim Peduli Sihat “fails to address the lack of access to primary health services in rural areas”, Azrul Mohd Khalib, CEO of Galen Centre for Health and Social Policy, says.

“There is a lack of private clinics available in these areas, making this a project which would largely benefit the urban poor,” he adds.

But the pledge to postpone the repayment of National Higher Education Fund Corporation (PTPTN) loans to all graduates whose salaries are below RM4,000 per month and abolish the blacklisting policy received a 10 on the Index.

While the implementation of the repayment mechanism is still being studied, PTPTN had removed 429,945 loan defaulters from the Immigration Department travel blacklist and urged all borrowers to update their information on the PTPTN website by the end of July 31. Those who fail to update their details will not be considered as a candidate who is seeking deferment.

PH received flak for this promise from the get-go, but the deferment is “good and well-intended”, says Voon Zhen Yi, manager of programme and research at the Centre for Public Policy Studies.

“This will increase a fresh graduate’s disposable income to build savings and, ultimately, to live more comfortably.”

However, according to Voon, the assessment of PTPTN loan repayments should be based on a case-by-case basis “instead of a flat RM4,000 threshold” as cost of living differs from one location to another and there might be extraordinary cases such as an illness or being a young parent that may affect a borrower’s cashflow despite earning RM4,000.

 

Borneo calling

PH’s commitment to Sabah and Sarawak comes through its promise to set up a Special Cabinet Committee to properly enforce the Malaysia Agreement 1963.

But this scores only a paltry 3 on the Index as someone familiar with the matters had said at the time of writing, there has yet to be a cabinet committee, despite the government appointing Minister in the Prime Minister’s Department Datuk Liew Vui Keong as committee head.

That said, the focus for this promise has to boil down to “outcomes and implementation”, says Tony Paridi Bagang, a senior lecturer in policy studies at Universiti Teknologi Mara Sabah.

“Perhaps the committee should involve the real experts on the subject matter, that is constitutional experts and economists, and also representatives from the opposition,” Bagang says. “Political ideologies should be put aside as far as MA63 rights are concerned.”

 

That silver lining amid uncertainty

But PH did hit a home run with one promise: to initiate a comprehensive review of all mega projects that have been awarded to foreign countries.

This has a perfect 10 on the Index for obvious reasons. Ever since the coalition took over, it has initiated reviews of mega projects such as the LRT3, MRT3, East Coast Rail Line and the High Speed Rail.

The government is also looking into local projects such as the Pan Borneo Highway and has exposed the dubious transactions of the Trans Sabah Gas Pipeline.

Yet uncertainty remains, according to Julia Goh, senior economist at United Overseas Bank Malaysia.

“From a broader macro perspective, investors are waiting for clarity on domestic policies and watching the political developments and changes in government-linked companies for business and market impact,” she says.

But risks have probably “tilted more to the external end, especially with rising US-China trade tensions,” she adds.

PH certainly did “overpromise” in its manifesto, says Ibrahim Suffian, director of Merdeka Centre for Opinion Research.

“But generally voters are satisfied with what it has done. Removing the GST and making a big attempt to reform has won it support and new political capital,” he says.

The good news for PH is it has earned enough political capital to win the next general election “if it preserves it or expands it through reforms or popular initiatives”, adds Ibrahim.

Indeed, in the Sungai Kandis state by-election on Aug 4, PH retained the seat with 6% more of the share of votes cast.FocusM




This article first appeared in Focus Malaysia Issue 294.