KUALA LUMPUR, Sept 25 — The allocation of over RM400 million for Felda settlers and expected election-related spending are unlikely to affect the government’s fiscal consolidation efforts, BMI Research said.
The Fitch Group company said the special incentive for Felda settlers and a predicted one-off expenditure in the run up to the 14th general elections will be compensated with the revised tourism tax and higher global oil price, as well as some spillover effect from the six per cent goods and services tax (GST).
“This special incentive is unlikely to lead to a significant sustained increase in the government’s expenditures, with the spending likely aimed at mollifying the farmers in the wake of the Felda scandal,” it said in a statement issued today.
In relation to this, BMI said Malaysia was on track to achieve its fiscal deficit target of three per cent of the gross domestic product (GDP) this year.
In July, Prime Minister Datuk Seri Najib Razak announced a total allocation of RM474.78 million for 94,956 eligible families of Felda settlers to receive a special incentive of RM5,000 for their welfare.
Felda Global Ventures (FGV) recently came under scrutiny after the Malaysian Anti-Corruption Commission (MACC) initiated investigations into the government-linked company and chairman Tan Sri Mohd Isa Abdul Samad.
