Dollars, cents and sense

THE Malaysian Budget, presented by the Prime Minister wearing the Finance Minister’s hat on Friday, Feb 24, 2023, has certain features that I find both curious and interesting.

While the total amount of the proposed expenditure (RM388.1 billion) for the whole country for the year is highlighted, the estimated national income for the same period leaves plenty of room for speculation.

At a glance, therefore, a non-economist cannot tell straight away whether or not this budget is a deficit, a balanced or a surplus one.

I might have missed the specific mention of this. If I did, it is only human frailty. The experienced financial analysist will discern from the various proposals (taxes, exports, returns to investments, etc) and will come up with the estimated total annual income.

This budget, prepared and presented by the previous government, was not debated and approved before the dissolution of Parliament. It has been fine-tuned by the present government. The objective is to drive the national economy whilst ensuring basic utilities for all.

However, the devil is in the details.

Beneficiaries 

The list of beneficiaries of the budget range from the investors in ASB/ASB2 to Employees Provident Fund (EPF) members to Social Security Organisation (Socso) contributors; from the civil servants to housewives and children; from sports, culture and arts to tourism; from the borrowers of National Higher Education Fund (PTPTN) to people facing bankruptcies.

Almost everybody has something to look forward to.

The budget looks like an election budget, even though a general election (GE) was only held hardly three months ago. Might be aimed at the states elections in the peninsula within the next six months.

Although several Sarawakian politicians are not enthusiastic about the budget, there are a few good points. There is provision for the oft-promised repairs to dilapidated schools and clinics, in addition to funds for a new school and clinics.

On the whole, the spirit behind the budget is admirable indeed, meeting the immediate needs of the target groups.

Except for a couple of curiosities.

Development expenditure

It is not clear to the ordinary folks whether or not the development expenditure (RM99 billion) is inclusive of money earmarked for government’s investments capable of bringing good returns to the national coffers.

I do hope that some MPs would raise this matter in Parliament.

Bloated civil service

It is obvious that there is less money for development purposes than for other services. While we do not begrudge expenditure on the administrative services, security and defence, we wish the government would do something about trimming the government-linked companies (GLSc) which are not making money.

The bloated Malaysian civil service is like a heritage that no Malaysian government can reject. If our leaders rely on the civil servants for votes, they can hardly afford to institute a reform that will cut funds used to pamper the government servants with.

What about the non-government servants? I do not really know the exact number of these servants; some people say it’s about one million.

But I do know that every time salaries of government servants are increased, the prices of goods and services shoot up! And they never come down!

The ‘dozen measures’

Interestingly, encapsulated in the national budget are the practical measures intended to achieve the following objectives of the ‘Unity Government’:

• sustainability of the national economy;
• directly meeting the daily needs of the people;
• allocating adequate funds with which to handle national disasters whenever or wherever they occur;
• luring high-impact investments;
• public sector reforms;
• empowering public- private partnership;
• prioritising digital agenda;
• strengthening roles of agencies and GLCs;
• eradicating hardcore poverty;
• minimising cost of living;
• ensuring racial harmony and unity, and;
• providing basic amenities.

These are all noble aims, which the people expect the government to carry out as part of its fiduciary duty.

‘Look East Policy’

It is significant that the needs of Sabah and Sarawak are finally recognised by the federal economic planners. Although there are complaints about inadequacy, there is allocated money for the following projects this year:

1. Seven new schools for Sarawak costing RM560 million;
2. RM255 million for Sarawak to spend on basic necessities;
3. *Sarawak’s special grant increased from RM16 million to RM300 million*;
4. RM1 billion for the development of Kalabakan in Sabah and Ba Kelalan in Sarawak;
5. RM2.5 billion for public infrastructure and utilities projects in Sabah and Sarawak;
6. RM30 million for new clinics, banks and mobile court rooms in the rural areas in Sabah and Sarawak;
7. Federal government is committed to expediting implementation of Pan Borneo Highway and Sarawak- Sabah link road, costing RM20 billion;
8. The Premier of Sarawak and the Chief Minister of Sabah have each agreed to use money due to them from Petronas to support the federal government’s programme for the eradication of hardcore poverty.

I have no quarrel with the above, except No 3. However, I need some clarification with regard to the increase in the special grant from RM16 million to RM300 million of the special grants as marked by the asterisks.

I would like an MP from Sarawak to clarify with the Finance Minister himself if there is a link between this particular allocation in this year’s budget with the special grants to Sarawak, as provided for in Part IV of the Tenth Schedule to the Federal Constitution.

Is the allocation one that is over and above the ‘Special Grants’?

Just asking.

RM6.5 billion for Sabah

In November 2022, the Sabah Law Society went to court to ascertain whether or not Sabah could claim 40 per cent of the revenue derived from the state every year. This reference to court arose out of concern that the federal government had allegedly failed to conduct the review required under Article 112D of the Federal Constitution, resulting in Sabah not enjoying the funds promised at the formation of the Federation of Malaysia, though the promise has been enshrined in the Constitution.

The judicial review was scheduled for Dec 16, 2022. Does anybody know about the outcome

In this year’s budget, Sabah is being allocated RM6.5 billion. Again the same question is asked of the ministry: is this allocation one that is over and above the Special Grants under Article 112d of the Federal Constitution as it applies to Sabah?

An answer given in Parliament would help us understand what these figures stand for and it would clear any curiosity.