The government recorded the biggest deficit since 1998 at 4.8%. The total budget of RM207.9 billion is the highest so far compared to RM176.9 billion in 2008.
At the Astro Awani studio today, a few of the panelists agreed that the budget is a populist budget. Another observer stated that the government looked like a Santa Claus, giving away so many goodies to the people.
Lower income groups, especially the poor, will receive more financial support from the government. Orang Asli is a target group for poverty eradication programme. Sabah and Sarawak are given a total of RM6.5 billion of special allocation for development.
Civil servants continue to enjoy several perks including travelling expenses, a month bonus and other incentives.
However, a panelist remarked that it is peculiar in Malaysia where corporate tax rate (25%) is lower than individual tax rate (27% and 12%). The reduction of 1% income tax for individuals is minute and will not translate into higher buying power.
While the government has targeted some lower income groups to receive some financial aids, it is unfortunate similar incentives are not given to the industries to boost the economy in order to create more job and business opportunities.
Several key sectors such as manufacturing, tourism and SME are not given enough stimulus to spearhead economic growth. Hence, I remarked that it is peculiar for us to look for new areas of growth but at the same time ignore and neglect our core economic sectors.
Both Malacca and Georgetown are allocated a paltry RM50 million in conversation fund but nothing is mentioned on efforts to promote and cultivate the living heritage in these sites. We are taking our World Heritage status for granted.
SMEs are continued to be neglected since the government is not doing anything more than merely providing a RM1.2 billion loan package which will be disbursed via banks. SMEs applying for the loan are normally subjected to lengthy application process. Ended up, less than 20% of these enterprises actually obtained the loan.
Nothing is being allocated to assist companies to improve their international marketing and promotional activities. Malaysia cannot afford to neglect its own domestic economy while focusing too much on attracting FDI and foreign businesses.
It is unfortunate that the government spends so much but is expected to achieve little when comes to catalysing the economy and create more economic opportunities for the people. We can continue to give handouts. This will not help our people in the long run.
I also mentioned that there is a need for companies to pay higher salary in order to retain and attract good skilled workers here. A few industries will be to be rebranded e.g. construction, agriculture and other rural based industries if more local graduates and workers can be persuaded to take up positions and opportunities in these sectors. These sectors are considered 'low class' and 'dirty' and dominated by lowly skilled foreign workers. This perception is misleading and not healthy for our workforce.
Another panelist mentioned that the government must work harder to regain the trust and confidence of the people. Malaysians today no longer trust any government announcements or initiatives. This is not productive for the Malaysian economy and foreign and local investors are going to avoid investing here.