Public Sector Downsizing, Ministers’ Pay Cut Among Steps to Save Nation’s Coffers

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Dr Mahathir’s first official policy move was to reduce Cabinet members’ pay by 10 percent, replicating a similar step he took in 1981.

  • Dissolve JASA, National Council of Professors, SPAD
  • Abolish Federal Village Development and Security Committee (JKKP)
  • Review mega-projects

Malaysia’s public sector will undergo a downsizing process as part of the federal government’s plan to cut spending, amid increasing burden towards the nation’s financial health, said Prime Minister Tun Dr Mahathir Mohamad.

This was resolved at the first cabinet meeting held by the new Pakatan Harapan federal government earlier today, Dr Mahathir told reporters at the Prime Minister’s Office.

Bernama

“There was no [hidden] agenda discussed. We discussed administration matters, especially those which relate to our [nation’s] financial problems,” he said. “I made sure everyone [in the cabinet] contributed because otherwise, I will be a dictator.”

The Prime Minister revealed the name of three agencies – all answerable to the Prime Minister’s Department – which will be dissolved as a start.

They included Barisan Nasional’s controversial propaganda unit Special Affairs Department (JASA), as well as the National Council of Professors – the latter, because the council is increasingly affected by political factors, the prime minister said.

“Most institutions which are not part of the government but supposed to advise government…all these things will be disbanded,” Dr Mahathir added. “We don’t need their intelligence. I think we are intelligent enough.” 

Bernama

Also dissolved will be the Land Public Transport Commission (SPAD), which will have its functions taken over by the Ministry of Transport, Dr Mahathir said.

The government will also abolish the existing Federal Village Development and Security Committee (JKKP), a network spanning villages nationwide, originally set up to assist with development, but later manipulated for political purposes.

Additionally, the government will drop the names of those who “obtained positions within the government without being included in the list of public servants”, the prime minister added.

These contract officers number to 17,000, Dr Mahathir said.

“Some of the time, they become permanent officers. We do not want to repeat bad practices of the previous government,” he added.

“These include officers who were appointed as ‘political awards’. There are cases where the government spends money just to provide opportunities to its supporters,” he said.

Dr Mahathir also assured that the government will at the same time “pay more attention” to reduce the effect of this downsizing exercise towards those with low-paying positions within the public sector.

“What we will do is that we will terminate their contracts, but we will re-engage those who are essential and those of lower [income], because [the latter] is not really political,” he said.

As part of its the effort to reduce government spending, the ministers have also agreed for a 10% pay cut on their basic salary, he said, adding that senior civil servants are also welcome to participate.

“As you know, senior civil servants are better paid than the ministers,” Dr Mahathir said.

“It is up to them, if they feel they want to contribute towards lessening the costs of running this country, they can do so. But we are not forcing them,” he said.

He also reiterated that the government is still reviewing Malaysia’s many ongoing and approved mega-projects.

“We are studying which project to scrap, which to continue, which to defer… [we will announce in a] later day,” he said.

Earlier this week, the federal government revealed that Malaysia’s national debt – including off-balance sheet items – has breached RM1 trillion, or about 65% of the national GDP. – The Edge Markets