PUTRAJAYA: Malaysia will cut the salaries of its Cabinet ministers by 10 per cent with immediate effect, Prime Minister Mahathir Mohamad announced on Wednesday (May 23).
"This shows that we are paying attention to the financial problems of the country," he said.
Mahathir was speaking at a press conference after chairing his first Cabinet meeting at Putrajaya.
He said this measure comes as the new government looks to reduce the government's debt, which is in excess of RM1 trillion (US$250 billion) - about 65 per cent of the nation's Gross Domestic Product (GDP).
Ousted leader Najib Razak had previously said that the debt was below his government's self-imposed ceiling of 55 per cent of GDP.
According to the Malaysian parliament website, the monthly salaries before the pay cut were: Prime minister, RM22,827 (US$5,700); deputy prime minister, RM18,168; minister, RM14,907; deputy minister, RM10,848.
When asked if "higher ranking" civil servants would also receive a pay cut, Mahathir said: “When I was first appointed prime minister way back in in 1981, the first thing I did was to cut the salaries of ministers and the senior civil servants.
"As you know, the senior civil servants are better paid than the ministers, it is up to them if they feel that they want to contribute towards lessening the cost of running this country … they can do so, but we are not forcing them.”
Under the previous government led by the Barisan Nasional coalition, former prime minister Najib had promised civil servants a salary increase from Jul 1.
Mahathir said his government was looking into the matter.
"That is a promise made by the opposition now," he said. "They have not won the election; we are not bound to their promises.
"Nevertheless, we will look at it in a very positive way. Where they deserve to be given some extra allowance, we will do so."
The number of civil servants will also be reduced so as to cut government spending. Mahathir said the government would cease the recruitment of political appointees and re-engage those in critical posts and with low salaries.
He said it was unnecessary to have political appointees as they were appointed merely to accommodate the supporters of the previous government.
He explained that about 17,000 contract officers were political appointees and some among them had become permanent staff.
"Those with low income, we will engage them but first we will terminate (their service)," he said, giving an assurance that low income employees would not be victimised.
Mahathir added that some projects committed to by the old government may be dropped. Regarding the Singapore-Kuala Lumpur high-speed rail link, he said the government will decide “very soon” on whether to continue with the project.
Responding to questions from Channel NewsAsia on the private search contract for missing Malaysia Airlines flight MH370, Mahathir said the government will review the contract and cancel it if necessary.
The prime minister also added that the Goods and Service Tax (GST) will be removed no later Jun 1 as previously announced.
On transportation, Mahathir said petrol prices at the pump will remain the same even though global crude oil prices have reached more than US$70 per barrel.
Following his announcement, the price for RON95 petrol remained unchanged at RM2.20 per litre, with RON97 at RM2.47 per litre and diesel at RM2.18 per litre.
The fuel prices have remained unchanged for more than a month.
Mahathir said Pakatan Harapan had promised to stabilise fuel prices and reintroduce fuel subsidies to targeted groups.
"Our policy is not to have weekly changes in the price according to the market," he said.
He also announced that the Land Public Transport Commission (SPAD) will be absorbed into the Transport Ministry.
Mahathir also spoke about the disbandment of other government-linked agencies and institutions.
These include the Special Affairs Department (Jasa), Malaysian Global Innovation and Creativity Centre (MaGIC), National Council of Professors (MPN) and Federal Village Development and Security Committee (JKKKP).
"Most of these institutions are not actually part of the government, (they are) supposed to advise the government. All these things will be disbanded.
"We don't need their intelligence; I think we are quite intelligent ourselves," he said.