Privatization Policy

Reduce Financial and Administrative Burden of the Government

Privatizations can be defined as the transfer of the functions and activities from the public into private sector. The privatizations policy that was introduced by Tun Dr. Mahathir is one of the mechanisms taken by the era of Tunku to achieve the national goals. Basically, privatization is the transfer of ownerships from the public into private sector. Privatizations will reduce the financial and administrative burden of the government and the government can allocated the budget wisely towards the community. Generally, privatizations policy is the process whereby the government change the status of business, industry or services from state government, federal to private ownerships

The process of human resources can be classified in term of recruitment, training or personnel and promotions into the highest levels. Huge of money are needed to develop the human resources within the government sector. The government can reduced the financial budget with the creations of privatizations policy and can used those money to develop the country or others purpose. For example since 1983, 96,756 employees or 11.4 per cent of the total public sector workforce were transferred to the private sector. This number excluded personnel of government-owned companies which were privatized. During the Plan period, 40,038 employees were transferred since 1983 (Tan, 2007). The recruitment and training will increase the government expenditures in term of the process of recruitment and selection the competent employees to work with the government and the training cost among personnel or workers can be reduced. Base on that, the government no need to pay the salaries or wages, promotions or bonus and others payment because the employees had already been transfer into the private sector and the responsibility of recruitment, promotions, salaries, wages and training are been put under private

The authorities to pay those debts are under the roles of private sector and the outstanding debts had been transferred to the private sector. For example, a further RM7.45 billion of the government’s outstanding debt is said to have been transferred to the private sector (New Straits Times, 10 August 1989). Furthermore, the government also can gain extra revenue through the corporate taxes as the company need to pay corporate taxes to the governments and all these can reduce the government borrowing and as well as allocated the money into the other sector. Privatizations will lead into the strengthening public sector finance and more balance