Analysts: Budget 2021 a necessary rescue package, with added bonus of putting Perikatan in good light

Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz tables Budget 2021 in Parliament November 6, 2020. ― Bernama pic
Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz tables Budget 2021 in Parliament November 6, 2020. ― Bernama pic

KUALA LUMPUR, Nov 7 ― While Budget 2021 is a necessary rescue package that will soften the impact Covid-19 has had on the country’s economy, it will also give Perikatan Nasional (PN) a political boost among voters, analysts have suggested.

The Budget, which was tabled by Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz yesterday, includes a raft of financial assistance to vulnerable communities and frontliners fighting the Covid-19 pandemic.

This spending, while necessary, could also boost the ruling PN administration‘s appeal, said KSI Strategic Institute for Asia-Pacific's economic advisor Prof Hoo Ke Ping.

Hoo said the Budget appears to cover the old, the young, civil servants, Sabah and Sarawak, Felda pioneers, microbusinesses, rice farmers, and many more.

“Everyone is given something, especially the unemployed workers. If anything I would call it a banker's Budget for its precise detail and direct focus on the rakyat.

“It is very people-oriented with a focus on Covid-19 frontliners, civil servants and pensioners. It appears the government has placed less emphasis on megaprojects as a result, though existing ones like the Pan-Borneo Highway are still continued,” he said.

 

Yesterday, the government had announced the largest Budget in the country’s history at RM322.5 billion, with the fiscal deficit expected to hit six per cent this year.

The government also announced several one-off financial aid to civil servants plus other means of easing the financial constraints faced by vulnerable communities.

Hoo added that the determination by the PN administration to capture hearts and minds also puts more pressure on Opposition MPs if they decide to vote against the Budget.

“They would feel the pressure from this as if they go against the Budget, they could be seen as going against the people and as such lose support.

“When you compare this Budget to last year's under then-finance minister Lim Guan Eng, the emphasis this time around is on rural Malay voters while last year it was more on urban areas,” he said.

Based on this, even if the Opposition were to maintain non-Malay votes at 90 per cent, things would still be difficult. Hoo added that after today, Muhyiddin can expect an increase in non-Malay votes in rural areas.

“Bear in mind that there is still a significant number of non-Malay voters in rural areas. Places like Tanjung Piai in Johor have anything between 15 to 20 per cent non-Malay constituents.

“This Budget will definitely benefit them, with a real impact on their lives. So I would expect Muhyiddin and PN to do well in the event of an election,” he said.

 

Singapore Institute of International Affairs' Oh Ei Sun characterises Budget 2021 as both an election Budget as well as an enlarged rescue package, since what was once considered “extra goodies” has since become dire pandemic necessities.

“This includes the cash handouts, as a government which does not lay out these largesse would be deemed heartless.

“But as this Budget is likely to garner bipartisan support and is therefore viewed as a non-partisan unity Budget, it remains to be seen to what extent it would politically benefit the government side exclusively,” he said.

Oh said the Budget makes do with whatever is left at the disposal of the government, to stem the economic and job bloodletting as much as possible.

“But as long as the pandemic is still surging with no end in sight, all the Budget can do is to patch up wherever the leaks are.

“It simply cannot afford to add an extra pair of engines to the national ship, as in the end it would just be futile if a plague is still raging onboard,” he said.

However, Universiti Kebangsaan Malaysia's political analyst Prof Kartini Aboo Talib Khalid dismissed the suggestion that Budget 2021 was laden with goodies meant to prepare for the eventuality of a snap election in the coming months.

“If my understanding is correct, if the Budget is disapproved by a majority of the MPs in the Dewan Rakyat, then only will there be a snap election.

“However, I believe this Budget is clear, precise, and provides a diverse range of assistance to all people, especially the most affected groups due to the Covid-19 pandemic,” she said.

It is likely that most of the MPs, including Opposition ones, will approve the Budget, Kartini said.

“As such, they will support this Budget. If they disapprove, they would not receive financial assistance from the government to help their constituents. This is a fair Budget to all and there is no reason for any MPs to reject it.”

When asked how the PN administration will fare in the event of a snap election, Kartini said this would work in their favour.

“Well, knowing politics is the art of possible, I would say that PN has a good chance to win,” she said.

 

Earlier this week ahead of Budget 2021 being tabled in Parliament, Prime Minister Tan Sri Muhyiddin Yassin told state news agency Bernama that the PN government really hopes to get a new mandate from voters through a general election.

He said the general election could be held if issues relating to Covid-19 and the economic recovery plan were resolved, and downplayed allegations that Budget 2021 would be an election Budget.

This comes as Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah asked federal lawmakers last month to support Muhyiddin’s Budget, amid plans of no-confidence motions against the embattled prime minister and his plan for a state of emergency.

Following that, Tengku Zafrul had met with Pakatan Harapan leaders including PKR secretary-general Datuk Seri Saifuddin Nasution, DAP secretary-general Lim Guan Eng, Parti Amanah Negara president Mohamad Sabu and nine other representatives, to discuss the Budget.

He said the two-hour discussion focused on several key areas namely healthcare, education, public wellbeing and the strengthening of the business sector as well as entailed six key proposals.

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