2023 Budget dilemma: An election budget or crisis-proof?

06 Oct 2022 10:33am
The 2023 Budget to be tabled tomorrow is now the centre of attention of 32 million Malaysians.
The 2023 Budget to be tabled tomorrow is now the centre of attention of 32 million Malaysians.

SHAH ALAM - The Umno Supreme Working Council (MKT) including the Prime Minister Datuk Seri Ismail Sabri Yaakob who aim to hold the 15th General Election (GE15) this year is bringing back the main focus of the people towards the 2023 Budget that is being tabled tomorrow.

Although there were some concerns that GE15 would be held during the flood season following the Malaysian Meteorology Department’s (MetMalaysia) projection on the transitional phase of the monsoon started on Oct 3, it seemed like election would be hold soon.

Due to this, political watchdogs and economists who observed the landscape in the country were of the opinion that the ‘Malaysian Family’ government was in dilemma whether the content of the budget would be skewed towards election or crisis-proof.

This was because the International Monetary Fund (IMF) and World Bank had projected the world’s economic scenario in 2023 to be gloomy and uncertain with its growth expected to decrease from 6.1 per cent (2021), 3.2 per cent (2022) and 2.9 per cent (2023).

The issue was agreed upon by Bank Islam Chief Economist Firdaos Ismail who explained that world economic growth would become slower in 2023 with the aggressive rise of inflation and interest rates throughout the world other than uncertain geopolitical issues.

His view was supported by Malaysian Inclusivity, Development and Advancement Institute Universiti Kebangsaan Malaysia (Minda-UKM) Director Professor Tan Sri Dr Noor Azlan Ghazali that revealed the recent World Bank reports that looked into Malaysia’s Gross Domestic Product (GDP) for 2023 to 4.2 per cent from 4.5 per cent.

Noor Azlan.
Noor Azlan.

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The challenges Malaysia faced in the country’s economic development actually relied on the reputation of developed countries such as Europe and United States (USA).

Behind all the possibilities, Azlan believed that the essence of the 2023 Budget must be in line with the plans for long-term developments in line with the 12th Malaysia Plan (12MP).

It has become a norm practiced by all governments worldwide to make the proposal as a platform to offer more budget for elections when the dates are nearing.

Taking the example of the 2018 Budget during BN’s government, then Prime Minister Datuk Seri Najib Razak had tabled a budget of RM282.25 billion which was among the highest in the country’s history, focused to gain support of civil servants and pensioners.

Among what was offered by Najib were an annual salary increase for 1.6 million civil servants, a time-based promotion and the establishment of a DG56 grade.

Also announced was the yearly contribution to Cuepacs of at least RM3 million a year, retirement benefits, and special grants of RM1 million towards each government retirement association for haj starting from 2018.

The proposition for the 2018 Budget was attributed by then deputy prime minister Datuk Seri Ahmad Zahid Hamidi as the GE14 Budget made sweet promises but did not guarantee BN’s victory in GE14.

Azlan voiced his major concern about the sufficiency of the government’s income to accommodate to manage Operation Expenses (OE) if a similar initiative was implemented in the 2023 Budget.

“There are five components of main expenditures that represented 87 per cent of the OE that must be given attention to that is emoluments (37 per cent in 2021), retirement pay (13 per cent), debt service payment (16 per cent), services and supplies (11 per cent) as well as subsidies and social assistance (10 per cent).

“Touching on the question of civil servants and government pensioners for 2021, the emolument for 1.6 million civil servants totalled to RM85.9 billion while the retirement pay was RM29.1 billion.

“Looking at both matters representing the biggest component covering 50 per cent in the OE we must be clear and have a specific strategy towards the size of civil servants.

“Don't rush towards making a decision to give bonuses for civil servants or take a drastic action reducing their size for the government's savings, ensure what is necessary and justified and is the right sizing," he told Sinar Premium.

Another main question ahead of the 2023 Budget was whether the government was willing to reject the populace's approach of continuously bearing the subsidy expected to reach RM80 billion for 2022 or bravely set a crisis-proof budget.

Azlan admitted the subsidy gift system that was blanket-economy-wide was a burden, with no specific target and was not sustainable for the country.

"I agree with the Finance Minister's view of rationalising subsidies instead of abolishing them.

"We must restructure the subsidy rates, those who need it must continue to get help but not for all, Malaysians must be prepared for the restructure," he said.

With GE15 set to change the direction of the country's politics and economy to be stable, all parties must make the 2023 Budget a catalyst for the safety net of the people from the incoming crisis, not as a platform to make a profit in politics.