Opinion

‘Bread-and-butter issues’ drive history-making change in Malaysia

The unpopular 6% GST, introduced in 2015, hit the poor- and the lower-middle classes hard. (Photo: Mahathir Mohamad/Facebook)

Malaysians will be closely watching the formation of their new government after voting for history-making change, writes the University of Canterbury’s Naimah Talib.

A new dawn in Malaysian politics began with the swearing-in of Mahathir Mohamad as the seventh Prime Minister last week. Mahathir, 92, led the historic election victory over the incumbent ruling coalition, Barisan Nasional, after six decades in power. Malaysia has never had an opposition party win power before last week and many Malaysians will be closely watching the next steps taken by Mahathir to form a new government.

Mahathir was the premier of Malaysia from 1981 to 2003, and his governance style has often been described as “dictatorial”. He emerged from retirement to join the ranks of an opposition united in its resolve to oust the former leader, Najib Razak, from power. Najib’s government was marred by allegations of abuse of power and corruption, including a money-laundering scandal involving state development fund 1MDB, which is currently being investigated internationally.

As leader of the opposition, Mahathir initially faced an uphill task convincing opposition members to work with him. Many in the coalition have had unpleasant experiences with Mahathir, including his erstwhile nemesis and former finance minister, Anwar Ibrahim. In previous elections, Anwar was not able to fully focus as the opposition leader due his long incarceration on trumped-up charges [Editor's note: Anwar was given a royal pardon and released from custody on 16 May 2018]. To his credit, Mahathir managed to resolve differences and broker a working alliance with opposition members, presenting a viable alternative to Barisan Nasional.

High on Mahathir’s agenda is the removal of the GST and replacing it with a more equitable sales and services tax.

Various polls before the election predicted the opposition would increase their gains, but would fall short of securing a simple majority. What turned the tide against BN in this election? What were the issues that pushed people to demand a change in government?

Many observers believe rather than the 1MDB scandal, it was bread-and-butter issues that drove people to vote Najib out of office. The unpopular six percent goods and services tax (GST), which was introduced in 2015 and aimed at decreasing over-reliance on oil revenue, hit the poor- and the lower-middle classes quite hard. Many also pointed to the removal of petrol subsidies as a contributor increased cost of living. 

One of the first priorities of Mahathir’s government is to fulfil a number of his campaign promises. High on his agenda is the removal of the GST and replacing it with a more equitable sales and services tax. This may prove challenging, given that GST yielded RM44 billion (NZ$16 billion) in 2017. However, it is likely that current higher oil prices will soften the impact of the GST removal. Before the election, the growth forecast for Malaysia was 5.5 percent to 6 percent for this year, and it remains to be seen if the economic strategy and fiscal policy of the new government will be able to sustain economic growth.

Perhaps a bigger challenge facing Mahathir is meeting the rising expectations that often accompany a major change in government. Malaysians have been buoyed with enthusiasm about their future and expect the new government to improve living standards and reduce the cost of living. 

Mahathir’s government has a long list of campaign promises to accomplish during its first 100 days in office. The test of Mahathir’s leadership will lie in his ability to manage the pace of change in order to keep up.

Naimah Talib is an adjunct senior fellow and part-time lecturer in political science at the University of Canterbury. Views expressed are personal to the author.

– Asia Media Centre