PM launches second part of NEM

STAR, 3 December 2010

PUTRAJAYA: The final part of the New Economic Model was launched Friday as the government seeks to push the country forward through a comprehensive transformation plan.

The National Economic Advisory Council (NEAC), which prepared the NEM, emphasised that the document was a long-term plan comprising a combination of new and existing initiatives.

Performance Management and Delivery Unit (Pemandu), which NEAC chairman Tan Sri Amirsham Aziz described as having done a “fabulous job” over the past year, will continue to be the coordinating agency to oversee the implementation of the transformation programme.

In addition, the NEM also included a recommendation for an independent evaluation board to review the pace of policy implementation and to monitor if the objectives of the NEM was achieved.

On the affordability of implementing the NEM, Amirsham said it was “the cheapest and most cost-effective transformation programme.”

On affirmative policy, the NEAC pointed out that it had to be transparent, market friendly and merit-based.

One of the council’s recommendation is to have a set of criteria for which exemptions can be granted from the 30% bumiputra equity and employment requirement, and eliminate case-by-case exemptions.

“In the future, with or without a 30% or higher target of bumiputra ownership of share capital, an overwhelming proportion of bumiputra household income growth will come from wages and salaries.

“Thus, both bumiputra and other communities would be better off if Malaysia is unencumbered by the never ending debates over wealth distribution. After all, before wealth is to be distributed it must first be sustainably generated,” said the NEM.

Among other recommendations included:
* A central oversight authority to collect financial data on all GLCs, monitor their expenses and hold GLCs accountable for their mandates and budgetary expenses incurred
* Govt to divest non-strategic companies and channel proceeds from divestment into a sovereign wealth fund
* To have a set of criteria for which exemptions can be granted from the 30% bumiputra equity and employment requirement, and eliminate case-by-case exemptions
* Consolidate and merge national enterprises to create scale to compete in global market, as had been done in the financial sector
* Establish new specialised courts and tribunals e.g. to hear environmental, fiscal and maritime issues
* To revive the National Development Planning Committee as the premier body for policy development, coordination and consultation
* Implement the Goods and Services Tax (GST), roll back some corporate tax incentives for selected industries and lowering corporate and personal tax rates
* Establishing a National Wage Consultative Council, formalise a productivity-linked wage system, consider a minimum wage policy and introduce unemployment insurance
* Adopting a single comprehensive database for social assistance programmes

Amirsham said the transformation journey would be tough, but was encouraged the government had taken up some of the recommendations proposed under the first part of the NEM, which was launched on March 30 this year.

These included the introduction of health insurance scheme for foreign workers, the setting up of Talent Corporation and more focus on vocational training.

“Government finances was affected by unpaid hospital bills. The healthcare of foreign workers should be looked after, and the employers should bear the cost,” he said.