Prime Minister Abdullah Ahmad Badawi today appeared to be in the dark over the fact that almost all of the money allocated under the Eighth Malaysia Plan (2001-2005) has been spent well ahead of its deadline at the end of next year.

Asked to comment on Finance Ministry parliamentary secretary Hilmi Yahaya's revelation yesterday that almost 90 percent out of the RM160 billion given at the start of the plan has been spent, the premier replied: "90 percent? I have to check first what he (Hilmi) is talking about

Hilmi had said that ministries failed to stagger their financial allocation and were spending rapidly the money allocated under the five-year economic plan.

Out of the RM160 billion, he said only about RM17 billion was left until the end of 2005.

Private sector's turn

Meanwhile, Abdullah, who is also finance minister, stressed that the country needs to maintain its high growth rates for this year.

Speaking after opening the annual general meeting of the Associated Chinese Chambers of Commerce and Industry of Malaysia this morning, he said the growth must be spearheaded by the private sector as the government is bogged down by a deficit in need of trimming - presently hovering at 5.4 percent.

He said indications of this private-sector led growth is already showing in spite of an increasingly challenging global environment.

"Judging from the performance our economy has shown, we achieved a higher growth of 7.6 percent in first quarter. Even in April, our export figures improved over March figures.

"If this achievement in the first quarter was done without prime-priming, meaning that public expenditure was also not big in that the government did not spend a lot of money on various infrastructure projects, there is a good lesson to be learnt obviously. Even without pump-priming, the public sector is doing very well. We can still achieve growth," he added.

However, Abdullah declined to provide specifics when asked how much of government spending is expected to be reduced, or what would be an 'acceptable level' of deficit.

In his speech earlier, Abdullah noted that six years of strong government spending was enough, and that it was now time for the private sector "to assume its mantle as the engine of economic growth".

"A large deficit will benefit no one in the long run. This is why the government is committed to maintaining strong fiscal discipline with a view to balancing the budget," he said.

At the same time, the premier was quick to assure that the government will continue to finance 'socially beneficial' and 'development' projects.

Cutbacks ordered

During a budget consultation last month, Abdullah said the government plans to slash this year's budget deficit to less than 4.5 percent.

But the government may face problems meeting its target of conservative spending as the 4.5 percent figure was an upwards revision from the government's earlier plan to reduce the deficit to 3.9 percent.

On Tuesday, malaysiakini reported that the Treasury has ordered cutbacks in all sectors, including health.

The cuts will also allow the government to put a lid on its mounting debts, which have risen to 48 percent of gross domestic product in 2003 from a low of 20 percent in 1996, after six consecutive years of budget deficits.