THE government is not in austerity mode and will spend where necessary, said Lim Guan Eng.
The finance minister said the Pakatan Harapan government was curbing the excesses of the past.
“What we are calling for is not austerity but smarter spending,” Lim told the Khazanah Mega Trends Forum in Kuala Lumpur today.
Lim said the government wants to adopt a wider application of open tenders for government procurements and projects compared to the direct negotiations by the previous government, which had led to overspending.
“We are also more selective in making public investments,” he added.
He said the government has cut back on the LRT3 project by reducing the cost by 47% (RM31.65 billion to RM16.63 billion) by changing the design specifications.
“We have also shaved RM5.22 billion off the MRT2 cost of RM56.93 billion by rationalising the above ground portion of the project.”
But he stressed that the government will spend “when it leads to long-term sustainable growth”.
He said the government was also reviewing the public-private partnership (PPP) projects.
“At the moment, 45 out 67 PPP projects under review have been given the green light to proceed on the condition that it goes through an open tender process.
“This will not only generate additional economic growth but raise the quality of growth and leave no space for financial abuses that were prevalent in the past,” said Lim.
Meanwhile, Lim said Malaysia’s economic fundamentals are still robust.
“But our exports need to remain competitive to maintain our current account balances,” he said.
On fiscal consolidation, he said Malaysia is focused on prudence and cutting out excesses.
But he said the government will continue to be supportive of private sector-led economic growth.
“But we will focus on sectors and industries that are high-value added, externally oriented and have important links with the rest of the Malaysian economy.
“We will not simply support a new industry just because it is new,” said Lim.