KUALA LUMPUR, Oct 13 — Almost eight months after Prime Minister Datuk Seri Anwar Ibrahim tabled his first federal budget since coming into power, today's tabling of Budget 2024 will be the government's biggest federal spending yet at RM393.8 billion to date.
As Anwar's government seeks to rationalise existing subsidy spending with the intention of consolidating the country’s fiscal position, Budget 2024's amount is over RM7.66 billion than the one tabled last February according to Ministry of Finance's Fiscal Outlook and Federal Government Revenue Estimates 2024 report.
With spending on blanket subsidies gradually ballooning over the years, this rationalisation is expected to be the focus of his first few years in this term to steer the country towards fiscal sustainability as part of his Madani Economy framework.
The sum earmarked for development spending (devex), however, is far smaller by about RM6.5 billion than February's RM96.5 billion, with around RM90.1 billion or 22.9 per cent from the overall spending allocated under Budget 2024.
Budget 2024's devex allocations are channelled into four formal sectors; namely economy (11.5 per cent), social (7.2 per cent), security (3.2 per cent) and general administration (one per cent).
Nonetheless, the reduced devex spending comes on the back of an additional RM57 billion under the development fund that was already approved back in February's tabling of Budget 2023.
Almost half of Budget 2024's revenue is derived from income tax collection, constituting 44.4 per cent or around RM174.8 billion.
Allocation for emoluments, usually the largest component in operating spending (opex), is projected to take up to 24.3 per cent of total expenditure.
Pensions are estimated to take up 8.2 per cent of total opex while debt servicing will take up 12.6 per cent of opex or around RM49.6 billion.
Achieving fiscal sustainability is a main target of the Anwar administration, as it aims to achieve a fiscal deficit of 3.5 per cent of the gross domestic product (GDP) by 2025, and a debt-to-GDP ratio of around 60 per cent.
Meanwhile, the federal statutory debt was at RM1.03 trillion or 57.6 per cent of GDP — below the debt ceiling which was raised to 65 per cent between November 18, 2021 and December 31, 2022, from 60 per cent. This was expected to rise to 63.5 per cent this year.
