KUALA LUMPUR, Nov 16 — An additional RM45 billion should be injected into Budget 2021 by the government to bolster the sluggish global economic recovery trend projected for next year following new waves of Covid-19 infections seen worldwide, former finance minister Lim Guan Eng said today.
The DAP secretary-general warned that numbers by the government which projected a 7.5 per cent GDP growth for 2021 were unrealistic given the current economic climate, adding how a 11.6 per cent contraction of the country’s gross fixed capital formation has further weighed down the potential growth and competitiveness of the local economy.
To address this issue, Lim suggested that RM45 billion, or an extra 4 per cent of deficit to the GDP be injected into next year’s Budget, to fund efforts centred around social protection, job creation, while saving businesses and investing in the future with new technology and education.
“To save and pull the economy out of our current economic recession, the government’s financial focus should shift from controlling our debt levels and fiscal deficit, to borrowing more money.
“The obsession with controlling our deficit to protect our sovereign credit ratings must give way to borrowing more money to save Malaysian jobs, businesses and livelihood,” he said in a statement today.
Lim proposed five measures be taken to complement their suggested approach; the first is bumping up monthly welfare aid payouts from RM200 and RM300 to RM1,000, which should include the recently unemployed as its beneficiaries, an effort said to cost around RM12 billion.
Lim also pressed for the blanket bank loan moratorium to be reimplemented and backdated from September 30 for another six months, an effort that could help eight million Malaysians hard hit by the pandemic, with a cost of RM6.4 billion.
“In contrast the targeted bank loan moratorium extension and bank assistance after 30 September, have assisted only 645,000 borrowers, which is only 8 per cent of the original eight million borrowers.
“Many have complained that this does not benefit them but only the financial institutions by merely extending the loan repayment period, thereby requiring even higher interest payments,” Lim said.
The Bagan MP then suggested the government spend around RM13 billion for the Malaysia@Work hiring incentive programme over a period of the next two years that will see RM500 and RM300 be channelled to employees and employers respectively to encourage the intake of new staff.
He said this initiative, which was first proposed by the Pakatan Harapan government in Budget 2020, would help more than 500,000 youths currently facing unemployment.
His fourth suggestion was for the government to fork out RM4 billion to digitise the education system, including purchasing laptops to provide and ensure online learning is available for students unable to attend physical classes.
Finally, Lim proposed that the government set aside an additional RM10 billion to be provided as lifelines to crumbling companies in the form of loans or credit extensions, in particular those from the tourism industry.
He said a projection by the Malaysian Budget Hotel Association expects to see 40 per cent of such hotels forced to close down, putting about 2,000 staff without a job, if the government does not intervene with assistance.
