.JPG "Lim Guan Eng speaks during the 'Malaysia: A New Dawn' economic forum in Kuala Lumpur October 9, 2018. u00e2u20acu201d Picture by Ahmad Zamzahuri")
KUALA LUMPUR, Oct 9 — The government must take a reduced role in the private sector to stop crowding out businesses that would otherwise have strong potential, said the finance minister.
In his speech at the “Malaysia: A New Dawn” investors conference, Lim Guan Eng expressed the Pakatan Harapan’s commitment to scaling back the government’s involvement in the local business arena.
The previous Barisan Nasional was regularly accused of allowing government-linked corporations to dominate the private sector, to the detriment of local firms that do not have the resources to compete with the state-backed behemoths.
“The previous administration only talked about a private sector-led market economy, but we will walk the talk instead,” he said.
Touching on the private sector’s complaints about the dominance of GLCs, he said the government planned to scale back its equity in such firms.
Lim said the move will encourage greater activity in the Malaysian stock exchange and higher overall liquidity in the economy.
He said this would also allow the government to realise the value of its assets currently held in the form of equity in GLCs.
The minister added that the new government’s cooperation with the private sector will be to facilitate the latter’s growth and not the “piratisation” exercises he claimed was undertaken previously.
Previous BN administrations were often accused of nationalising losses but privatising profits to a select few, hence the “piratisation” epithet.
“As an example previously an overwhelming majority of public-private partnership (PPP) projects were discovered to have been directly negotiated, where contracts for government projects were carried out for land instead of cash payment.
“This meant the projects’ real costs and the government lands’ values were unknown, and corruption, extraordinary profit for crony companies and poor investment returns were rife,” Lim said.
The government’s new PPP, model dubbed PPP 2.0, will be strictly transparent, with open tenders the rule rather than the exception, he said.
Putrajaya’s move is not entirely altruistic, Lim said when explaining it hoped to derive greater tax revenue as a result of encouraging businesses to grow and expand, which he said is the aim of establishing the Tax Reform Committee.
“It will undertake a comprehensive review and reform of the overall tax system and has the mandate to minimise the tax gap, diversify tax revenue and make the system more efficient, neutral and progressive.
“The committee will also explore ways to minimise tax leakages and evasions, and review all incentives given out previously to ensure they are still relevant to supporting high-quality economic growth,” he said, adding additional tax measures will be announced in the Budget 2019 speech on November 2.
