Malaysia PM expands handouts as delayed election nears

KUALA LUMPUR, April 2 Tue Apr 2, 2013 3:08am EDT

KUALA LUMPUR, April 2 (Reuters) - Malaysian Prime Minister Najib Razak announced bonuses for the 40,000 employees of national oil firm Petronas on Tuesday, signalling a long wait for a general election is nearly over as he seeks last-minute support from the middle class.

In recent days, Najib has expanded a slew of handouts to include thousands of workers at state-linked firms, underlining the government's ability to try to win support through its close control of Malaysia's biggest companies.

Najib, whose ruling National Front coalition could face the closest election battle in its 56-year rule, must call the polls by the end of April or parliament will automatically dissolve for the first time in the Southeast Asian country's history.

At a town hall-style meeting with Petronas staff in Kuala Lumpur, Najib said they would each get 1,000 ringgit ($320) bonuses for "contributing to nation-building". Media predicted he would dissolve parliament on Wednesday.

The government-controlled New Straits Times newspaper reported that ministers had been ordered to wear a suit and tie for Wednesday's regular cabinet meeting for an official photograph. Wednesday marks exactly four years since Najib took power after the coalition's worst-ever election result.

Najib appeared to be getting ready for battle as he told the Petronas staff, who make up a part of Malaysia's urban middle class that has swung to the opposition in recent elections, to keep the government in power, according to company officials.

"He told us that we had to vote wisely or Petronas, which has always been independent under the current government, will lose its independence if the opposition came into power," said a Petronas employee who attended the meeting.

The board of Petronas answers only to Najib, who approved the one-off bonuses amounting to 40 million ringgit. Petronas, often described as Malaysia's piggy bank, accounts for up to 45 percent of the government budget.

LATE APRIL POLLS?

If Najib dissolves parliament on Wednesday, it would signal an election by around the end of the month or in early May, raising doubt over Najib's participation in a Southeast Asian leaders' summit in Brunei on April 24-25.

Over the past two years, Najib's government has handed out about $2 billion in one-off payments to poorer families, in what the opposition has called thinly disguised vote-buying. Other handouts have included free wheels for taxi drivers, pay rises for civil servants and allocations to schools run by minority Chinese and Indians.

In recent days, the government have announced one-off bonuses of 500 ringgit to more than 40,000 employees of Telekom Malaysia and Pos Malaysia.

Lower income workers make up a large part of Telekom Malaysia and Pos Malaysia and analysts expect state power firm Tenaga to pay out a similar bonus.

"In the past, there would be salary increments and the giving out of election goodies. Now, with these bonuses, it has gone to a new level," said Ibrahim Suffian, head of the Merdeka Centre polling firm.

Political opponents have said Najib's delay in calling the polls is a sign of his indecisiveness and concern in the face of a strong challenge by the opposition following its best-ever election performance in 2008.

Najib's coalition is expected to win the vote but a failure to improve on its last performance could cost him his job.

In recent days, Najib has huddled with senior members of his party to decide on candidates. The ruling coalition has yet to publish its election manifesto.

Najib has repeatedly defended the polls delay, saying he wants time to show Malaysians how they have benefited from his ambitious Economic Transformation Programme, which aims to double per-capita incomes by 2020.

"Election dates are not for announcement until they actually happen. That's a fact," Najib told Reuters in an interview last week, laughing off a question on whether the election would be held in April.

Najib remains popular, polling significantly higher than his coalition in surveys. An opinion poll by the respected Merdeka centre gave him a 61 percent approval rating in February, but that is down 10 points from the end of 2011. (Editing by Stuart Grudgings and Robert Birsel)