Pakatan Rakyat has come up with a statement to show where it will get the money to finance its campaign promises.

Pakatan estimates that its promises will cost RM46bn to implement. This RM46bn includes a RM12bn reduction in oil revenue as a result of raising oil royalty payments (to oil-producing states) to 20 per cent from the present 5 per cent. Toll abolition will cost RM6bn. The plan to abolish study loans, provide free education and raise teachers’ allowances will cost a further RM8bn. An injection of RM5bn will also be made into the affordable housing programme.

Where will this RM46bn come from? Pakatan claims it is able to save 24 per cent of the Selangor state government’s expenditure by wiping out leakages and corruption and reviewing expenditure priorities. If this performance (24 per cent saving) is extrapolated to the federal operating and development expenditure totalling RM206bn, Pakatan claims that it will be able to save RM50bn. This, I believe, is eminently possible given the staggering corruption, wastage, cronyism, patronage and rent-seeking we have seen.

Other revenue will come from a reduction of subsidies to IPPs and the reallocation of the huge sum presently allocated to the Prime Minister’s Department to more pressing expenditure priorities.

My note: Tolls need not be completely abolished. They can be used to invest in public transport. That should provide a few additional billion ringgit.

Also, additional allocations need to be made to lift the government’s public health care spending to 6 per cent of GDP from the present meagre 2 per cent – though no doubt the government can also save plenty by re-nationalising drug procurement and health care support services. Of course, care must also be taken to retain skilled staff in the public health care system.