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He has a lot of money and he is giving away money to everyone – Dr.Mahathir Mohamad

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KUALA LUMPUR – Tun Dr Mahathir Mohamad admitted today that the Najib administration’s penchant for handing out cash to Malaysians through its various people-centric policies was “very close” to vote buying.

But the former prime minister said the government was running out of time with polls drawing closer as the ruling Barisan Nasional (BN) coalition needed a bigger mandate to tighten its grasp on Putrajaya.

“I do not believe in giving money to the people. I believe in giving facilities. But I think when a government has no time and they are facing an election, they make a decision that is easy,” Dr Mahathir said in his keynote address at the Perdana Leadership Foundation’s CEO Forum 2012 here.

“If you give people money, then they should support (you). Maybe it is not vote-buying… but it is very close to that,” he said, to laughter from the audience.

The government is expected to announce a second round of RM500 cash handouts to lower-income households when Budget 2013 is tabled next week, in a move that is seen as giving Najib and his BN pact’s ratings a boost ahead of polls expected soon.

The first round of handouts under the Bantuan Rakyat 1 Malaysia (BR1M) programme, which involved some five million families and cost taxpayers RM2.6 billion, saw Najib’s approval ratings shoot up to 69 per cent, largely due to a surge of support from low-income households.

Throughout his address, Dr Mahathir repeatedly mentioned the Najib administration’s cash handouts, at one point even saying that “he (Najib) has a lot of money”.

“Now we have a new man as the head (of government),” he said when recalling the succession of prime ministers after he stepped down in 2003.

“I won’t say anything bad about him because I support BN.

“The only thing I’m going to say is that he has a lot of money and he is giving away money to everyone.

“During my time, I didn’t give away money. I could have even given money to myself but I didn’t. I think I made a mistake there,” he said in jest.

Najib will table the Budget on September 28 and besides the fresh BR1M handout, he is expected to announce other measures to boost domestic spending and the economy in a bid to head off a worsening economic outlook as he prepares to call his first general election.

The economy grew at a surprising pace of 5.4 per cent in the second quarter, blowing away economists’ expectations and potentially giving rise to a feel-good factor ahead of the general election.

But the good news is not expected to last, as the global outlook is likely to affect Malaysian exports.

Malaysia’s surprisingly strong second-quarter economic growth despite weakening exports was largely due to the buffer of ongoing construction projects and increased spending attributed to civil servant salary hikes and government cash handouts, say economists, which could point to uneven growth in the months ahead.

This means many ordinary Malaysians are not feeling the positive effects of economic growth, making the second BR1M handouts necessary to continue maintaining any economic momentum.

A number of international ratings agencies also say that Malaysia has yet to present a convincing plan to tackle the twin fiscal threats of its federal budget deficit and federal debt even though strains on its credit profile are increasing.

The ratio of federal government debt to GDP reached 51.8 per cent at end-2011 despite strong GDP growth but barring a further deterioration in the global economy, the government should be able to meet its 2012 deficit target of 4.7 per cent of GDP.

The opposition Pakatan Rakyat (PR) has criticised the Najib administration for what it says is vote buying by the BN government through public spending in the form of various handouts such as the BR1M. – TMI