KUALA LUMPUR, Nov 7 ― The 2019 Budget offers accountability, integrity, openness and integration for institutional reforms, says a prominent academic.

Universiti Kebangsaan Malaysia Vice-Chancellor Prof Tan Sri Dr Noor Azlan Ghazali said Malaysians, however, should not depend too much on incentives proposed in the Budget, particularly in public services, assuming them to be cheap or free.

"In Malaysia, everyone takes public services for granted, especially education and hospitalisation, which to them have to be free or cheap.

"But no one has come forward to assume this role of assuring that we have good public services,” he told reporters at the 2019 Post Budget Debate organised by the Malaysian Economic Association here today.

Noor Azlan said Malaysia is about to be a rich and developed nation, and with this progress in income, society has to come forward, as not everything comes from the government’s pocket.

"It’s about everybody is looking at how much money you get, but the real problem is isomorphic mimicry (looking like successful entities and replicating to enhance their legitimacy).

"We need to focus on function but not form, and hope that in the years to come, the government will engage more, and come up with serious reforms,” said Noor Azlan.

Overall, Noor Azlan said, Malaysia has progressed, as recognised by the World Bank and the international community.

"Yes, we do have problems here and there, but overall we are progressing, in the ranking of doing business, we are a country at the high end, so people are looking at us,” said Noor Azlan.

Meanwhile, on the budget deficit, Noor Azlan said the people at large tend to interpret it literally, believing that a deficit is bad and a surplus is good, which is not necessarily true.

"The truth is, yes, we are progressing, but almost all of the years, since 1970 and except for five years, we have actually been in deficit, and if truly deficit is wrong, then we would not have been able to reach this stage,” said Noor Azlan.

He said what is most important, in respect to fiscal deficit, is that we do it rightly for the right purpose and reason, and bring down the deficit to a manageable level.

"If you look at the case of Malaysia (economic crisis) in 1997, 1998 and 2009, you see the deficit went down, minus 6.7 per cent, then it climbed up steadily, it means that Malaysia is managing the deficit right,” he said.

Noor Azlan said Malaysia should not be in surplus when the economy is down, as the country needs to be in deficit, but have enough buffer to take a deficit when the economy is facing shocks.

"I’m not saying to take as much deficit, but if the government decides it will be at 3.7 per cent fiscal deficit (next year), I hope they can commit to a plan for it to be at a steady level,” said Noor Azlan.

"For a country like Malaysia, a rule of thumb says that if you are -3.0 per cent to -2.5 per cent it is all right, so don’t aim for a surplus for no reason as people are wrongly interpreting that a surplus is good,” he added.

Meanwhile, Standard & Poor’s Sovereign Ratings Director, Andrew Wood said Malaysia’s per capita gross domestic product growth on an annual basis is rather high, as the credit rating agency has an investment-grade A- rating on Malaysia with Stable outlook.

"At the same time, private consumption growth is strong and continues to be so,” said Wood.

It was reported that Malaysia had set a budget deficit target of 3.7 per cent this year, sharply wider than the initial 2.8 per cent aim, as the new government said it has to spend more than budgeted to service debt and tax refunds that the previous administration did not pay.

The one-day debate featured prominent economic stakeholders from the country and around the region. ― Bernama