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PUTRAJAYA, June 27 — Finance Minister Lim Guan Eng dismissed today allegations that Putrajaya was bankrupt by pointing out that public workers continue to enjoy uninterrupted pay.
Lim also said the government could still afford to fund economic development programmes, holding this up as further evidence to rebut such claims.
However, he conceded that Malaysia’s public coffers were impaired but pointed out that no nation could afford to lose RM150 billion to corruption and not be affected.
“The government would like to spend more but at the end of the day, legacy issues like 1MDB are still something we have to deal with,” Lim said during the 2020 Budget Consultation Session at the ministry’s complex.
In his speech, Lim said the session’s theme would be on shared prosperity for sustainable and inclusive growth towards a high-income economy.
“I believe inclusive growth involves a vision of adequate medical care, good education, a useful and remunerative job, a decent home, and freedom from unfair competition and monopolies, as the birth right for all Malaysians.
“Sustainable growth must be essentially private sector driven, with the government providing the environment of a well-regulated ecosystem based on rule of law, competitive environment, transparency, competency, sound economic fundamentals, and safe and secure environment,” he said.
Lim highlighted several areas that the Budget would emphasise, beginning with building a social security net that would protect the most vulnerable groups.
This includes improving the mySalam insurance scheme for the B40 category in the next term, as well as evaluating and formulating a new plan to get half a million young Malaysians to work via multiple programmes.
“The government is actively managing living costs pressure faced by people. Currently, we are designing a Cost of Living Index to complement the Consumer Price Index.
“The new index will track the general change in consumer prices, and help the government design a more precise policy in addressing living costs,” he said, adding monopolistic behaviour by businesses will also be curbed to drive down living costs.
Encouraging economic growth will also be a focal point, with Lim saying heightened productivity will stimulate higher wage growth.
This will be done through the digitalisation of the economy, providing RM3 billion via the Industry Digitalisation Transformation Fund, growing the economy using the 4P Partnership, and leveraging on the strengths of Malaysian universities in creating an entrepreneurial state.
“Malaysia’s competitiveness has enabled us to benefit greatly from the ongoing trade war between China and the United States, via business relocation as well as trade and investment diversions.
“Approved foreign direct investment is a leading indicator and its increase will increase our actual investment in the near future. The government will work to ensure these approved investments get realised as soon as possible to improve our productivity and wages,” he said.
However, Lim remained cautious despite noting investments from the US and China of RM11.5 billion and RM4.4 billion, respectively.
“A prolonged and escalating trade war will hurt everybody. Eventually Malaysia as a great trading nation will be affected as well.
“The trade war is reorienting the global supply chain permanently. Malaysia must be ready to grab any opportunity arising from the global shift,” he said.
While calling economic growth a key pursuit, Lim said the government is mindful of its quality, following the principles of competency, accountability and transparency.
This will be tackled by a full conversion to accrual-based accounting by 2021 for more transparent disclosure of Malaysia’s debts and liabilities.
“We are also embarking on fiscal consolidation, gradually cutting the fiscal deficit from 3.7 per cent of the GDP in 2018, to 3.4 per cent this year, and to 3.0 per cent in 2020.
“Other reform initiatives such as the introduction of the Fiscal Responsibility Act and the Government Procurement Act will further enhance the credibility and accountability of public finance,” he said.