Written by: Averroes
(1.0) Introduction
Spectacular as it seems, Malaysia is in a positive track as one of the leading countries with high Foreign Direct Investments (FDI) and domestic investments, totaled up to RM 107.5 billion for the first half of 2021 (mostly from the manufacturing services and primary sectors at 69.8%). FDI has increased by 223.1%, similarly as of last year.
Malaysia's GDP is also seen to have improved significantly. Surely, if more efforts and measures are taken to improve Malaysia's economy, we would be a high-income nation soon and more investors are attracted to initiate businesses in our country.
If you are curious on what is FDI, you may read a previous article here. However, it will take a long way and arduous journey still for Malaysia to reach there, as there would definitely be many hurdles and obstructions along the way.
Malaysia is at stake due to debt. As of writing this article, our national debt is at 56.8% of our GDP, which is below 60%. Hopefully, with the Budget 2022, we are able to ramp up our tax collection or state revenue via higher compliance.
The people's confidence and trust in politics must be improved, that as long as corruption, incompetency, abuse of power and toxic politics prevail, Malaysians would not have good favourable impression of our country's political arena.
For today, we shall uncover next year's Budget 2022.
(2.0) Sheila Danker
We will coin some opinion from Sheila Danker on this matter. She said that our country is no longer inundated with talks from politicians attempting to party-hop or switch camps. Now, all politicians are focusing on improving the general welfare and well-being of the rakyat.
She praised Khairy Jamaluddin as the Health Minister in handling the Covid-19 pandemic in our country and managed to steer us back into track. However, there is still the impasse of many businesses trying to struggle with the MCO, which has become less restrictive after the rakyat has received their doses of vaccines.
Moreover, she highlighted that the Minister of Finance, Tengku Zafrul Aziz invited the public to provide suggestions for the Budget 2022 which encompasses these four main points;
(i) Improvement of Government Procurement
(ii) Enhancing Cash Assistance Programmes
(iii) Review of Tax Incentives
(iv) Drafting the Fiscal Responsibility Act or Bill
Moreover, she welcomed the Ministry of Finance (MOF) calls for Development Financial Institutions (DFIs) to assist the rakyat, particularly business owners in financial means, such as loans, credit facilities, as well as financial aid to their employees. This in turn could at least revitalise local business under the spike of the pandemic.
The Pre-Budget Statement (PBS) for the Budget 2022 was also introduced with a preliminary overview of what direction are we motioning toward. She summarily state that, the PBS allows for observing important metrics such as economic outlook, tax revenue performance status and public expenditure.
This comes together with a package that the government is being more direct and transparent.
(3.0) The Pre-Budget Statement (PBS)
Interestingly enough, this is the first time in Malaysian history that we have a PBS. It will be presented in Parliament on 29th October 2021, with the hopes of anticipating what the country would engage with next year.
As mentioned, the PBS would improve our country's transparency in terms of financing the nation, how well-informed are the rakyat are in terms of public resources and expenditure, by having the rakyat participate and expressing their concerns, as it is one of the tenets of good governance and building trust or confidence to the nation's administrators. This would escalate Malaysia's position in the Open Budget Index (OBI).
According to the International Budget Partnership (IBP) statistics in 2019, currently, Malaysia stands relatively low at a rank of 47 out of all the ASEAN countries. The Philippines is ranked at (76), Indonesia at (70) while Thailand is at (61).
(3.1) Budget 2022 is formulated with the objectives of;
The PBS itself concluded itself to espouse the following objectives. Though inconsistent with what Tengku Zafrul mentioned with the four main points, perhaps the following objectives are general in nature and may influence the said four points.
(i) Protect and drive recovery of lives and livelihoods of the people (those in the tourism and retail sectors)
(ii) Rebuild resilience for the economy (bridging the gaps between healthcare providers in the private and public sectors, enhance digital infrastructure in education and businesses. This would increase higher skill workers and more automated technology.)
(iii) Catalyse socio-economic reforms (to drive toward achieving the Sustainable Development Goals, 12th Malaysia Plan and the Shared Prosperity Vision 2030.
(3.2) Extraneous auspices of Budget 2022
The PBS is also aligned with already running governmental programmes to spur and encourage economic growth, gradually to say the least, under the National Recovery Plan. It will also ensure the continuity of policies toward people and businesses. More people would have job opportunities as a result.
It is also said to reform post-pandemic structures to augment the country's competitive levels, as well as to encapsulate greater sustainability and inclusiveness. Those marginalised and disenfranchised would also be afforded the assistance they deserve, such as women, the indigenous and the impaired.
Since the government is intending to increase taxes, one way is that there should be voluntary disclosure of plans related to indirect taxes from individuals who have not paid, underestimated it or was erroneously reported.
One consideration was the Special Voluntary Disclosure Programme for indirect taxes, administered by the Royal Malaysian Customs Department and the Tax Compliance Certificate and Tax Identification Number.
(4.0) Conclusion
To conclude, whatever the outcome of the PBS and the upcoming Budget 2022, hopefully it would address the imperative issues outlined and bring for a better and prosperous Malaysia, in spite of this dreadful pandemic. Parliament from both sides should debate with civility and due respect on this topic, as it involves the livelihood of the rakyat at stake.
(5.0) References;
Sheila Danker. (September, 2021) https://www.freemalaysiatoday.com/category/opinion/2021/09/13/transparency-in-budget-2022-planning-sign-of-better-things-to-come/
Ganeshwaran Kana. (September, 2021) Budget 2022 to rebuild economic resilience. Retrieved from, https://www.thestar.com.my/business/business-news/2021/09/01/budget-2022-to-rebuild-economic-resilience
Yantoultra Ngui. (August, 2021) Malaysia’s 2022 Budget to Focus on Recovery, Economic Reforms. Retrieved from, https://www.bloomberg.com/news/articles/2021-08-31/malaysia-s-2022-budget-to-focus-on-recovery-economic-reforms
The Edge Markets. (September, 2021) MoF seeks ideas from public for Budget 2022. Retrieved from, https://www.theedgemarkets.com/article/public-invited-share-ideas-mof-budget-2022
Ida Lim. (September, 2021) In a first for Malaysia, Finance Ministry releases pre-Budget statement to show govt spending plan for next year. Retrieved from, https://www.malaymail.com/news/malaysia/2021/08/31/in-a-first-for-malaysia-finance-ministry-releases-pre-budget-statement-to-s/2001843
Danial Dzulkifly. (September, 2021) Miti: RM107b investments in first half of 2021 show investors bullish on Malaysian economy. Retrieved from, https://www.malaymail.com/news/malaysia/2021/09/13/miti-rm107b-investments-in-first-half-of-2021-show-investors-bullish-on-mal/2005129
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