Sunday, May 16

Finance Minister: Budget 2021 to be bigger than Budget 2020, govt will not reduce projects but will spend more to ‘restart’ Malaysia’s economy


Tengku Datuk Seri Zafrul Tengku Abdul Aziz

KUALA LUMPUR (Nov 1): The Malaysian government intends to spend more money next year with Budget 2021 expected to have a bigger allocation than Budget 2020, in order to create more jobs and to “restart” Malaysia’s economy, Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz has said.

In an interview with Malay-language paper Sinar Harian, Tengku Zafrul said he could not reveal the figure for Budget 2021 which will be tabled in Parliament next Friday, but confirmed that the expected government expenditure amount for the year 2021 would be more than the amount allocated in Budget 2020.

When asked if the government would cut back on spending for development projects under Budget 2021, Tengku Zafrul said the government instead intends to spend more on such development projects next year, while saving money on operation costs.

“No, that’s why Budget 2021 this time is an expansionary Budget. Our development expenditure, we have to increase it as much of the impact of this development expenditure is for the long term.

“Let’s say to build a hospital or any construction project, it is very good as it creates job opportunities and big economic spillovers. We need to spend more but reduce wastage.

“As an example, we see the government’s operating expenditure now reducing as we no longer spend for events. Many savings can be made and reused to help the public and the economy,” he was quoted as saying in the interview.

In Budget 2020 tabled last October, the government had given an estimate of RM297 billion in government spending, with RM241 billion for operating expenditure and RM56 billion for development expenditure. Government revenue for 2020 was at that time predicted to be RM244.5 billion.

Tengku Zafrul also highlighted how more spending by governments had aided economic recovery based on the experience in other countries, but also spoke of the need to be ready if things take a turn for the worse or if there is a new spike in Covid-19 cases.

“Some Malaysians say we do not spend enough, there are also those who said we have spent a lot. But for us, we need time.

“If we see the years 2008 and 2009, in developed countries in Europe, the way they got out of the global financial crisis is by spending. Countries that do not spend would take a longer time to recover. Therefore, in difficult times, we have to spend and help.

“The thing that we have to be prepared for is we have to expect worse situations. If there is another Covid-19 wave, we have to be prepared. We cannot spend all the money. We will see and implement what is best in the budget this time,” he added.

Noting that many Malaysians were desperate and pinning their hopes on the government, Tengku Zafrul said despite the government’s revenues taking a hit this year, it has to spend more.

“I predict in the next year, the economic situation will recover but it will not return to a normal trajectory and we will restart the economy from the most foundational level.

“So in this budget, we will not compromise in the efforts of saving public lives and also ensuring the country’s economic continuity,” he said, adding that there was currently a third wave of Covid-19 cases and that the country could not burden both the Covid-19 frontliners and the country’s healthcare system.

Tengku Zafrul noted that the government has so far helped 10.6 million people by putting RM18 billion directly into their pockets via the Bantuan Prihatin Nasional (BPN) cash aid programme, with the government’s RM13 billion wage subsidy programme helping some 320,000 employers and 2.8 million workers.

“Such things we will continue. We have to spend to restart the economy. So the budget this time is an expansionary budget and must be targeted at sectors that can have economic multipliers,” he said.

Emphasising the government’s message to save both Malaysians’ lives and ensure economic continuity, Tengku Zafrul said both Malaysians and their businesses have to be saved to prevent Malaysia from facing difficult times in the long term.

“Businesses and certain industries are very important. If we don’t save them now, and want to rebuild such industries later, it will need more funds and take a longer time,” he said.

While saying that the government would help as much as possible in developing the economy and show its willingness to spend as seen in the four economic stimulus packages already announced this year, Tengku Zafrul at the same time said: “But another message that the public has to understand is that we have to be more targeted as we want to help those who truly need it. We cannot give to all as the government’s revenue has reduced.” – MalayMail