MALAYSIANS have been given good insights into Budget 2019, which will be announced less than a month away, on November 2.

These Budget hints – if not revelations – were given clearly by Prime Minister Dr Mahathir Mohamad and top leaders in quite an unprecedented way, given the traditional silence before any Budget speech.

But this is a welcome move to raise transparency, encourage public discussion and debate, and provide opportunities for feedback to the new government directly from the rakyat.

Indeed, the prime minister, finance and economic affairs ministers, and Bank Negara Malaysia governor clearly and unanimously dropped hints in their speeches at the Malaysia: A New Dawn conference yesterday.

What are the hints for the Budget 2019 strategy?

Firstly, the Budget will introduce new taxes. So, it’s not going to be more of the same. Taxes will not only be incrementally raised as usual, but there will be new taxes.

No one likes to be taxed, and as the prime minister rightly expects, these taxes will be unpopular. But, if I may ask, unpopular for whom?

Of course, those affected by the new taxes will be unhappy. Actually, I’ve never come across a happy taxpayer, in all my years of working in the Treasury!

But if the taxes are imposed on those who can afford to pay, that is, the wealthy and prospering, and not the middle class or poor, I think the new taxes for the well-to-do will be welcomed by, and prove popular among, the majority of Malaysians.

A more progressive tax system will be deemed fair and equitable to most Malaysians. It will reduce widening income disparities, provide more funds to pay off our high national debt of RM1 trillion, reduce our budget deficit, and help the government continue providing basic needs to society on a higher and even more sustainable basis.

Health, education, environment, defence and security, and anti-poverty policies and programmes need not be unnecessarily cut back.

More can be done to help poor Malaysians, pensioners and the handicapped. More opportunities can be provided to balance the allocation of funds for the poorer states in Malaysia, and the many pockets of poverty in places like Sabah, Sarawak, Kelantan and Terengganu.

It is sad that even today, many of our communities do not have, inter alia, electricity, clean water, and definitely, reasonable shelter and sanitary facilities!

Hence, the wealthy who will be taxed more should feel a sense of gratitude that they are able to help the government enable more low-income and poor Malaysians enjoy a better quality of life.

As our pragmatic prime minister has repeatedly said, there is no point having a higher income per capita when so many are struggling to live on a daily basis.

How can we have peace and stability if we do not transfer more tax income to the poor in the form of better social services and improved infrastructure in the depressed income areas of our country?

The prime minister’s concern for the poor was echoed effectively by his potential successor, Anwar Ibrahim, who was shocked to see the “abject poverty” in Port Dickson. Surely we can do much more to help the poor, with more taxes for the rich?

Secondly, the Budget strategy will probably and hopefully strongly introduce socio-economic policies and projects that are related to basic needs, and not based on race, as had been wrongly pursued in the implementation of the New Economic Policy (NEP) in the past.

Actually, NEP has served its purpose, and should be phased out soon and replaced with a needs-based economic policy, like the New Economic Model. This would be in the best interest of promoting purposeful progress and national unity.

The way NEP was implemented was quite divisive, and had caused much polarisation in our multiracial society. We should move away from the unhealthy, distorted NEP practices, especially with regard to poverty eradication, and go forward as a united, not divided, nation.

Budget 2019, the first after the new government won power, must show the way forward.

We should not have more of the same, that is, old, issues, just packaged differently. Budget 2019 must reflect the new government’s thinking and the new order!

Conclusion

Budget 2019 must be seen to be different. It must be prudential and pro-poor, fair and equitable, and aim to restructure the economy with more meritocracy and competition. It must start a new ecosystem that is fair and just and equitable to all sectors of the economy – labour, capital and the entrepreneurial class.

Then, we will have more enthusiasm to support the new Budget strategy and higher taxation. There has to be far less corruption, too. Malaysians should feel more confident that their higher taxes will be spent wisely, and not frittered away through diversion to corrupt and wasteful channels.

Then, both taxpayers and the people will be happier! – October 10, 2018.

* Ramon Navaratnam is chairman of the Asli Centre of Public Policy Studies.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.