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Malaysia's najib seen delaying election, boosting spending by ferujkll sdff





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Malaysia's najib seen delaying election, boosting spending by
Article Posted: 05/18/2013
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Articles Written: 2023
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Malaysia's najib seen delaying election, boosting spending


 
KUALA LUMPUR - Malaysia is planning a fresh round of cash handoutsto poorer families in August, Deputy Prime Minister MuhiyuddinYassin said on Thursday, a move seen aimed at shoring up supportamong undecided voters. "I informed the prime minister that if we have the money, we shoulddistribute a second time," he said according to state news agencyBernama. Two senior officials earlier told Reuters the government isconsidering giving out payments to 5.2 million low-incomehouseholds ahead of a Muslim festival in August. Prime MinisterNajib Razak would then present a generous election budget inSeptember before announcing an election date, they said.



Speculation has been swirling for a year over the timing of what isexpected to be a fiercely fought election, which Najib must call bynext March as he seeks to improve on the ruling coalition's dismalshowing at the polls four years ago. A June or July poll had been the favourite, but Najib appears tohave calculated that he needs more time - and more handouts - tomaximise chances of regaining the two-thirds parliamentary majoritythat the government lost in 2008. "The window for October elections is wide open now. This is thenext window after July," said one senior government source whodeclined to be identified.



"This is a risky election and the prime minister does not want totake any chances. He has to prove to the people that the governmentwill be there for them. So he has to balance his reforms withsocial economic help," he said. Another government source said one of the suggested dates for theelection was Oct.



14, just two weeks after Najib, who is alsofinance minister, presents the 2013 budget in parliament. The decision to delay the election carries risks. A worseningglobal downturn could impact the trade-dependent economy in thecoming months, dampening the feel-good factor generated byhandouts. DEFICIT RISKS Uncertainty over the timing could also hit the economy as companieshold back on spending, while an overly generous budget wouldsharpen concerns over Malaysia's chronic budget deficit.



"After September is what we have been told for the timing of theelections," a senior official in the United Malay NationalOrganisation (UMNO), which dominates the Barisan Nasional (BN)ruling coalition, told Reuters on condition of anonymity. "We are on red alert but nothing is happening for now. Theleadership is looking at an election budget to sweeten the deal,"the source added. Fiscal sweeteners this year have included pay rises for civilservants and cash payments for students, adding to strains onfinances.



Cash handouts to low-income households earlier this yearaccounted for 2.6 billion ringgit (S$1.04 billion) alone. Fitch ratings agency said this year that Malaysia, which is heavilydependent on oil revenues and whose spending is bloated by food andfuel subsidies, needed structural reforms to narrow a budgetdeficit that hit about 5.4 per cent last year. The government had aimed to cut the deficit to 4.7 per cent thisyear, but that looks tough to reach as economic growth slows toaround 4 per cent from last year's 5.1 per cent. Najib aims to cutthe budget gap to about 3 per cent by 2015.



"If they continue dishing out generous handouts, I'm afraid thistarget will be delayed," said Azrul Azwar Ahmad Tajudin, chiefeconomist at Bank Islam.

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