PAKATAN Harapan’s victory in the 14th General Election (GE14) is not just stunning but also historic.
The results went against the expectations as many pundits and analysts had predicted a victory for Barisan Nasional.
Similar to the last general election, the main issue in GE14 revolved around the economy.
The rise in the cost of living is, perhaps, the mother of all issues that caused the downfall of the previous coalition, which lost the general election for the first time since independence.
The other issue was corruption, which manifested in the 1Malay-sia Development Bhd (1MDB) saga.
One of the reforms undertaken by the new government is the separation of the prime ministership from the finance portfolio.
This is not just refreshing but also a crucial step to establish checks and balances, transparency and accountability.
The investigation into 1MDB is encouraging as corruption cannot be condoned.
The fight against corruption must be comprehensive as it will plug wastage and leakage, besides boosting investor confidence.
Another interesting move was the 10 per cent reduction of ministers’ salaries, which is an attempt to rationalise expenditure in the budget.
I think the more pertinent question is whether the new government can fulfil its election promises, especially its pledge to reduce the cost of living without jeopardising the country’s fiscal and macroeconomic management in the long run.
The government said it may not be able to fulfil its 10 promises within the first 100 days.
These include reintroducing targeted petrol subsidies for cars, delaying the payment of PTPTN loans, introducing EPF contributions for housewives, and increasing and standardising the minimum wage.
In the near future, all eyes will be on how the government will facilitate a transition from the Goods and Services Tax (GST) to the Sales and Services Tax (SST).
The GST rate has been reduced from 6 per cent to zero per cent, and SST is expected to be reintroduced in September.
What is more crucial is the people’s expectation that the prices of goods and services will go down once SST kicks in.
In my view, the issue always lies in the implementation of the policy rather than the policy itself.
Regardless, it is comforting to hear from the finance minister that our economic fundamentals remain solid.
A strong economic foundation will provide more room for the new government to conduct economic reforms in line with Pakatan Harapan’s manifesto to chart a new course for the economy in this new Malaysia.
DR IRWAN SHAH ZAINAL ABIDIN
Director, Asian research, Institute of Banking and Finance, Universiti Utara Malaysia