Pakatan flays government over GST delay

By Shazwan Mustafa Kamal and Clara Chooi - The Malaysian Insider

KUALA LUMPUR, March 15 — Pakatan Rakyat (PR) today slammed the Barisan Nasional (BN) government for its delay in implementing the Goods and Services Tax (GST) as it only increases cost and risks to the country’s business community.

PR de facto leader Datuk Seri Anwar Ibrahim said that the delay in the GST implementation proved the ineffectiveness of Prime Minister Datuk Seri Najib Razak’s administration.

“In light of the problems created by the economic crisis, any plans for the Malaysian economy has to be well-thought, well-researched, planned and executed.

“The major problem here is the example of the failure of the current leadership to implement a major economic initiative,” he said in a press conference after the PR pre-council meeting in Parliament here.

The GST Bill was to be tabled at this month’s Parliament sitting, but was delayed amid mounting objections from the public as well as from segments of Umno.

A mass rally was supposed to have taken place today outside Parliament House as part of a nationwide campaign against GST, which was put off after the government announced a delay over the weekend.

The protest has since been cancelled. Government leaders were forced today to defend the decision to put off the implementation of the unpopular GST.

Najib’s administration has been hit by a number of apparent policy U-turns, the latest being the delay in introducing GST.

The government was also forced to call off a complicated two-tier fuel subsidy system and last December it retracted an unpopular five per cent real property gains tax (RPGT), proposed in Budget 2010, for properties sold after five years.

Last Friday, Najib told his Umno party’s information chiefs to support his reforms, amid signs that some of his administration’s moves to free up the economy and reverse the budget deficit have been bogged down by a lack of public support.

Najib vowed last year to reform public finances in order to cut the budget deficit to 5.6 per cent of the Gross Domestic Product (GDP) in 2010 from 7.4 per cent in 2009 and pledged to tackle a subsidy regime that accounted for 15 per cent of all federal government spending in 2009.

In a joint statement by Anwar, PAS deputy president Nasharudin Mat Isa and DAP adviser Lim Kit Siang released during the press conference here, it was pointed out that the government had been sending mixed signals to the public on the issue of GST.

“Each time it announces its decision to roll out GST, companies have to spend in order to prepare for the implementation, only to be told that the implementation is put off until further announcement,” it said.

The leaders also claimed that the “flip-flopping” way of rolling out a new fiscal initiative, especially one that involved drastic changes to systems in the business community, only increases costs and risk to the community.

“They have spent considerably since the last one year and now they have to put all the preparations to shelf, yet again.

“This is bad for the country,” the PR leaders said. Penang Chief Minister Lim Guan Eng, who was also present at the press conference, said that this was not the first time the government had backtracked on its proposals.

He cited the example of how the government had scrapped the Real Property Gains Tax (RPGT) last year.

“In terms of economic policy making, does this serve a purpose or not? I think that (Finance Minister II Datuk Seri Ahmad) Husni (Hanadzlah) should answer that question.

“There is no proper mechanism here, there is absolutely no certainty for foreign investors when the decision-making process is done in an ad hoc and arbitrary manner.

“This is a triple flip-flop,” he said.

Kit Siang concurred with Guan Eng and added that Najib was even more of a “flip-flop Prime Minister” than former Prime Minister Tun Abdullah Ahmad Badawi was in his first year in office.