KUALA LUMPUR, June 2 — Tun Dr Mahathir Mohamad’s administration is not an austere government but is going through a rationalisation phase due to the excesses of the previous regime, said Finance Minister Lim Guan Eng.

Lim acknowledged that an austerity drive was not the best thing for a softening economy, but said the Pakatan Harapan administration was compelled to improve Malaysia’s fiscal health and spending discipline.

“Definitely not austerity. No,” he told Malay Mail in an interview at his office in Putrajaya.

Since taking power, Dr Mahathir’s government has announced the cancellation of the High Speed Rail (HSR) between Kuala Lumpur and Singapore as well as ordered a review of the East Coast Rail Link (ECRL) project.

Dr Mahathir also announced a ten per cent pay cut for his entire Cabinet.

“The first item that we did during our first Cabinet meeting was to cut salaries. I never expected that. Come for first meeting. Cut salary. I thought, ‘what kind of job is this?’

“But he (Dr Mahathir) told us the situation was bad. Then you realise this is bad and needs to be addressed,” said Lim.

Lim said the government expects increased public spending will help grow the economy and that was why the Goods and Services Tax (GST) was zero-rated from yesterday.

The finance minister said the government has returned RM22 billion to the people and the economy through the GST cut, the stabilisation of fuel prices, the coming Hari Raya bonus and Bantuan Sara Hidup (BSH) handouts.

“I think we are helping the economy to grow. Hopefully with the increased spending the economy will grow.

He urged the public to take advantage of the tax holiday — the period between June 1 and September 1 when the Sales and Service Tax (SST) will be reintroduced — by boosting consumption because of the cost savings and benefit to the economy.

However, he acknowledged that economic growth could not be dependent solely on domestic consumption.

“What we would like to see is private-led investment.

“Private-led is always more efficient. Public-led investment is very inefficient, and also there are a lot of leakages. Look what happened under the previous regime,” the finance minister said.

Genuine public-private partnerships were also needed, he said, instead of what he called the “rip-off” ventures of the previous Barisan Nasional government.

He said genuine partnerships would allow the government to save public funds while letting the private sector take the lead.