The government’s target for a reduction in fiscal deficit this year is on track, said Prime Minister Datuk Seri Najib Razak.
He said the details will be revealed during the presentation of the 2013 Budget in Parliament next month.
“Yes (I have briefed the council). I will give the full figures during the coming budget (presentation) but the reduction (fiscal deficit) is on track.
“It will be mentioned during the budget. I don’t want to steal the thunder from the budget,” he told reporters after the National Treasury Council’s meeting here today.
Najib said he also briefed the council members on the country’s economic and growth rate projection as well as the current global economic scenario.
Besides Barisan Nasional’s Menteris Besar and Chief Ministers, Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim and Penang Chief Minister Lim Guan Eng also attended the meeting.
The government believes that the Raya bonus for the civil servants will not expand the country’s budget deficit. Last month, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said that the bonus payout will not raise the country’s targeted fiscal deficit of 4.7 per cent for this year as the government expects to collect bigger revenue and will try to cut down on expenses.
Najib had on July 24 announced a half-month bonus with a minimum payment of RM500 for civil servants and a special payment of RM500 for pensioners to be paid on August 9. The total payout will involve some RM2.2 billion and benefit 1.27 million civil servants as well as 657,000 pensioners.
On the council meeting, he said the federal government will allocate RM287 million to the state funds for 2014, of which RM30 million will go to states facing acute shortage of management funds and the remaining RM257 million to be given to states based on the level of economic, infrastructure and livelihood of the people.
Najib, who is also Finance Minister, said the government will come out with a new improved and comprehensive guideline on management procedure and distribution of maintenance funds for state roads to ensure its full utilisation and efficiency.
In this regard, he said the Finance Ministry, with cooperation from all state governments, will convene a lab session in October to iron out the problems faced by states in managing and utilising the fund properly.
“They (state governments) have agreed on the draft of the comprehensive guideline on management procedure and utilisation of the maintenance fund for state roads,” Najib said.
He indicated that there is no timeframe for the lab to formulate the guideline, but said the government hopes to come out with the guideline by year-end.
“Thereafter, allocations for states, which fail to manage the fund efficiently and effectively will be very much reduced,” he said.
As a follow-up to the audit report on the maintenance trust fund for state roads and Malaysian road record information system, Najib said the Finance Ministry has identified several weaknesses that need to be rectified and improved.
He said although the federal government set aside a huge amount to states in the form of maintenance allocations for state roads, most states failed to fully utilise the allocations. “For instance, the government allocated RM2.6 billion in 2011 compared with RM1.1 billion in 2006, which was an increase of 138 per cent or an average of 27.6 per cent yearly.
“However, most of the states failed to fully utilise the allocations. So, we need to correct the situation,” Najib said. He also noted that the improved loan repayment by state governments to the federal government and the decline in loan applications from the state governments.
Najib said the amount of loans applied by state governments has gone down by 8.4 per cent or RM1.6 billion, from RM19.1 billion in 2010 to RM17.5 billion last year.
“The amount of loan repayment by the state governments has also improved, with the state governments paying some RM790.6 million in 2011 compared with RM434.1 million in 2010,” he said.
Najib attributed the improvement in payments to among others, the takeover of loans by Pengurusan Aset Air Bhd (PAAB) for the water supply projects in five states, namely Penang which amounted to RM655.2 million, Perlis (RM75.1 million), Negri Sembilan (RM1.1 billion), Malacca (RM764.2 million) and Johor (RM873.7 million).