Bold and Sexy Budget?

Barjoyai Bardai of Universiti Tun Abdul Razak suggested that the Finance Minister, Lim Guan Eng announce a “bold and sexy” budget. And what was his idea?

Basically, announce plans on flexible hours, work from home arrangement and tax foreign remittance. That’s mildly sexy but not bold!

If you want to be bold then address the concerns or, issues at hand, and introduce measures to alleviate it.

·       debts of Government-owned entities [e.g. PTPTN (RM40b) and Prasarana (RM30b?)]

·       royalties to Sabah and Sarawak (20%)

·       civil service emoluments/pension

·       education malaise – UEC; English; Malay; private and public education

                                          – unemployment of graduates

·       research & development efforts – primary industries; digital technologies

·       renewable energy initiatives – solar, hydro, others

·       infrastructure projects – implementation and costs

·       tax base/reforms – new taxes/reforms of existing ones

                            – incentives for FDIs

                            – income re-distribution policies

·       environmental challenges – plastics, haze and other pollutants

There are many more on race and religion which need another political forum. Meanwhile, the narrative on what has been achieved has to be told.

The “shared prosperity” concept entails pain for some – who (actually) can afford it. So look at tax reforms that may introduce higher graduated tax for corporates/individuals; transaction/foreign exchange tax on banks; revised incentives for FDIs relocating from China; and congestion or “pollution” tax to subsidize public transport and renewables.

On the “expenditure” side, emphasis should be on infrastructure for greater connectivity; 3-4% of GDP on R&D; re-education programs for unemployed graduates; approve UEC recognition; reform education curriculum to suit future needs, including English and Mandarin; gradually (over 5 years) increase petroleum royalties to Sabah and Sarawak; devise better income re-distribution policies; examine/review civil service manning levels and create voluntary schemes for contract employment; support renewables with subsidies for “roof-top” panels, electric/hybrid cars; work-out debts of PTPTN and Prasarana, amongst others; divest entities that are best-run by the private sector.

Be less focused on fiscal deficit and more on value-added steps to generate revenue. Getting infrastructure, health and education right is the way forward for a more prosperous and just society.

Reference:

1. Bold and sexy budget please, but economist not holding his breath, 2 Oct 2019, FreeMalaysiaToday

2. What can we expect from Budget 2020, 30 Sept 2019, Malaysiakini