KUALA LUMPUR, July 12 — The Pakatan Harapan government is confident in maintaining balanced accounts despite the populist pledges resulting in increased expenditure and lowered overall revenue, according to the Straits Times (ST).
Citing government sources, ST reported the government could stand to lose up to RM21 billion after the scrapping of the goods and services (GST) tax, albeit it being lower that the projected amount.
“They (the previous government) were withholding a fair amount of GST refunds. Collection could be RM10 billion less than stated,” a government official was quoted by the daily.
The report also quoted Finance Minister Lim Guan Eng, who said financial shortfalls brought from the scrapping of the GST would have the blow soften by the billions of ringgit saved from reviewing mega infrastructure projects.
It added that other deals, some handed out without an open tender would also be scrutinised, with many already re-negotiated with slimmed-down tender specifications, resulting in billions saved.
Among the projects mentioned was the cost of the Light Rail Transit (LRT3) in the Klang Valley where Lim was quoted saying the cost had ballooned to RM31.45 billion, more than triple its initial estimates.
“Certain news reports have indicated that the LRT3 cost can be reduced by RM6 billion.
“The Ministry of Finance wishes to state that much more than RM6 billion must be reduced if the LRT3 project is to proceed,” he was quoted saying in the report.
Construction and infrastructure firms have been among the hardest hit following announcements that mega infrastructure projects would be renegotiated.
The report also claimed the federal government held some leverage as these firms would prefer to trim their profit margins rather than face empty order books, according to industry experts.
“There's some willingness to cooperate but not fully. So (the question is) whether that's enough to match the target price to make it financially viable,” Lim was quoted saying in the report.
