THE loss of RM150 billion to 1Malaysia Development Bhd and other corruption scandals has impeded the government’s ability to spend, said Finance Minister Lim Guan Eng.

He said the government is hampered with financial constraints due to these losses although it would like to spend more, including on social welfare initiatives.

“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.

“No country can afford the loss of RM150 billion and not be hurt by it,” he said in his keynote address at the 2020 Budget Consultation in Putrajaya today.

Explaining further, he said Putrajaya had lost RM52 billion to 1MDB alone, while other scandals related to it had drained RM50 billion from its coffers.

Meanwhile, corruption scandals such as Tabung Haji and Felda had depleted another RM50 billion.

“Despite abolishing the GST and replacing it with the SST, the government of Malaysia has not gone bankrupt. We are still able to afford to pay our civil servants and carry out development to ensure that economic growth is at a sustainable place.”

He said the government is also vying for a close to 5% gross domestic product (GDP) growth for 2019.

Putrajaya is also continuing its efforts on fiscal consolidation, with the aim of paring down its fiscal deficit to 3.7% to the GDP in 2018, 3.4% this year and 3.0% next year. It hopes to narrow the fiscal deficit to below 3.0% in 2021.

“Other reform initiatives such as the introduction of Fiscal Responsibility Act (FRA) and the Government Procurement Act (GPA) will further enhance credibility and accountability of public finances,” said Lim.

These efforts will be complemented by asset monetisation efforts by the Prime Minister’s Office and the debt management office which will proactively manage the fiscal debt and liabilities as well as assess and report on exposures to risk.

Meanwhile, Lim announced that Budget 2020 will be tabled in Parliament on October 11.

He said the Finance Ministry has received responses from 162 organisations on 1,516 issues.

“As a responsive government, we will evaluate all proposals carefully,” he said, adding that this was the most number of responses the Finance Ministry has received in its history.

He said among the main concerns of the business community include stringent financing  requirements, tax regimes, foreign labour, bureaucracy, the trade war between US and China, and embracing transformation towards Industry 4.0.

Themed Shared Prosperity: Sustainable And Inclusive Growth Towards High Income Economy, Budget 2020 will be centred on inclusive and sustainable growth and digital economy.

It will also reflect the shift in the government’s policy towards high-quality growth to achieve its developed nation status. – June 27, 2019.