Saturday, September 15, 2007

Finance Ministry Clarifies "Everything?"

DAP had raised the question why there were differing Development Expenditure numbers for 2008 being presented recently. This, according to the Star, is the Finance Ministry's explanation:

The Finance Ministry has clarified that the 2008 Development Expenditure allocation (RM48.1bil) and estimated Development Expenditure (RM40bil) shown in the Economic Report are not contradictory figures in achieving the Government’s targeted fiscal deficit of 3.1% for next year.

A statement released by the ministry explained that the fiscal target was based on the estimated development expenditure, which represented the Government’s best estimate of actual expenditure in 2008.

At the same time, however, the Government was also proposing an allocation of RM48.1bil for 2008, the statement added.
Some simple questions from a non-Ekornomics graduate:

Why is the Govt proposing an allocation which differs from it's best estimate?

Does the govt intend to allocate an additional amount which it was unable to (best) estimate?

If they weren't able to estimate the additional allocation, how then did the govt estimate(?) that it wanted to allocate 8.1bil more than the best estimate?

Or Why is the Govt making estimates which differs from what they want to spend (allocate)?

Does the govt feel that it is good governance to make spending estimates that are not based on spending intentions (allocation)? What's the point of the estimate then?

At the end of the day, answer this: WHAT is the govt actually going to spend? What the left arm estimates (40bil), or what the right arm allocates (48.1bil)?

Read my other postings on more govt financial double talk:
PKFZ bailout: The CRONYNOMIC / EKORNOMIC rationale
What's wrong with NEP's Par Value.

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