KUALA LUMPUR: The government is looking at the feasibility of privatising parts of the public sector in a bid to address its bloated size, says Prime Minister Tun Dr Mahathir Mohamad.
He said the government had introduced a similar drive in 1983 that touched on the functions of the private sector in the development of the nation and had reduced the financial burden while improving efficiency and quality of work, stimulating economic growth and improving the effective distribution of resources.
"This can be seen, for instance, in the success of privatising Telekom. Its employees were transferred to a private company, reducing the number working in the public sector. At the same time, the employees received better salary packages.
"We believe that this strategy is still relevant to address the issue of the size of civil service, that is seen to have huge financial implications and is a burden," he told Datuk Seri Ismail Mohamed (BN-Kuala Krau) during Minister's Question Time.
The government, Dr Mahathir said, would prepare a holistic plan to ensure the transition plan to cut the size of the public sector would not have an impact on the administration of the country.
He said the government currently stepping up its efforts to improve the productivity of the civil service and believed that it can be improved by reducing duplication, wastage and distributing resources more efficiently through the use of the latest information technology and computers.
"The government will ensure that those involved will be given working opportunities in other economic sectors before opting to reduce the size of the civil service," he said.
According to Dr Mahathir, the number of civil servants stood at about one million when he resigned in 2003 but the figures continued to rise to about 1.7 million people.
"The size of the civil service has grown too big and become worrisome for a very long time as it continue to increase the government's financial burden and at the same time, reduces the allocation for development purposes," he explained.
The Prime Minister said if the situation was not controlled, the high cost of management expenditure for the government will continue to take a big chunk from the country's national budget each year and will slow down economic growth.
This will then have an impact on the government's ability to spend on development projects that could give multiple effects to the economic and social growth of the country, said Dr Mahathir.
"The government believes that the size could be reduced without affecting the service delivery, performance and source of income for the officers involved.
"Cutting the size of the public sector does not mean there will be less working opportunities. This is especially true when privatisation takes place," he said.
The Prime Minister said the increase in government spending was due to the act of certain leaders from the previous government who often increased civil servant salaries in an efforts to buy their loyalty.
"We found that the increase in the salary of the civil service alone was among the factors that pushed the high cost of living. When the government increased the civil service's salary, the public sector will follow suit, and the cost of living will also continue to increase.
"We also noted that the previous government set up various bodies with huge salaries that could reach tens of thousands of ringgit a month.
"All that will be stopped as their services are not actually needed," he said.