BUDGET 2020 is yet again another deficit budget, mildly expansionary, and aims to channel growth, expansion and welfare in the intended areas.

It provides a clear direction for long-term development plan, focuses on infrastructure preparation for Industry 4.0, building infrastructure and support for the transformation of digital economy, and encourages companies to hire more locals.

Budget 2020 is structured to help realise the goals of Shared Prosperity Vision 2030. But it also has some points of major concern.

The last 30 years since 1997, when we last had a surplus budget at 2.4%, saw an average deficit of 2.99% to the GDP.

For 2020 the deficit is projected to be at 3.2%. Budget 2019 was projected at deficit 3.0% but turned out to be 3.4% (estimated).

Continuous deficit does not bode well as it has to be financed by debt and foreign borrowing. The government debt and liabilities ratio to GDP is expected to rise to 77.1% by June.

Out of the RM297 billion for the budget, RM34.9 billion or 11.75% is for debt servicing, comparing to 2019 that was slightly more than 10% of the budget. Increasing debt servicing trend means we will have less to spend on other areas, squeezing out other allocations, and less available for development expenditure.

Reducing budget deficit had always remained wishful in the past. This time is no different. A balanced budget is targeted at 2023.

Lack of frugality and a high urge to spend, this wish seems perpetuity. Like most governments, inflating the currency is the most convenient way to get away with indulgence to spend.

A cashless society enables the government to inflate and create money electronically at whims. E-wallet is a step towards that objective of a cashless society, however good the intention may be.

Emoluments and retirement charges take up a large chunk of the operating expenditure at 36% of the budget.

With 1.71 million in the government payroll and a population of 32.6 million, it is a ratio of 1 to 19.06 persons. Our government servant to population ratio is one of the lowest in the world.

Our bloated civil service, within which many are unproductive and are merely occupying space, is also a growing burden for budgetary allocation for emoluments and retirement charges.

That “occupying space” remark is also reflective of the many among the academics who are not productive in the true academic sense – the like of those who chickened out when challenged to a public debate to defend their stand on the Rome Statute; those who raised stale rhetoric over imaginary lost dignity; and those who plagiarise, do not teach and mark course work properly.

As such, is the high allocation to the Education Ministry, other than for the development of schools, amounting to RM64.1 billion or 21.58% of the budget justifiable?    

Likewise, in procurement of supplies by departments where marking up the price has previously been a norm, without proper and effective oversight, what justification can there be for increment of budgetary allocation, including for Jakim?

For those on government payroll, non-contribution to productivity or to add value to the economy, system and communities, their presence can rightfully be seen as mere occupying of space.  

Another matter of major concern is the introduction of the MalaysiaKerja incentive scheme. While the idea to assist locals to gain employment is noble, there should be oversight to ensure there is no distortion and misallocation of economic resources.

It is easy for government to please the people by giving handouts. Balancing between doing the right and appropriate things for a long-term gain is never easy.

Furthermore, in the unskilled labour force especially in the construction and agriculture sectors, it will require a mental revolution plus the MalaysiaKerja incentive to achieve the desired goal.

The digital transformation and the implementation of the National Fiberisation & Connectivity Plan are vital for an economic transformation from our current middle-income trap to a high-income economy.

While the 5G roll-out is eagerly awaited, there is no need to rush to be the first in the region. As argued previously in an earlier article, https://www.themalaysianinsight.com/s/167267 the millimetre wave frequencies used in the 5G telecommunication network comes with risk of adverse health. It is better to be safe than sorry later.

The RM27 million allocated for Malaysian Palm Oil Board to tackle anti-palm oil campaign and establish new markets abroad may be better spent prioritising local education.

Malaysians themselves are not yet convinced that palm oil is superior to other imported edible oils.

Our cabinet members should know that any hard earned promotion abroad will come to naught if our key leaders make a silly statement to antagonise bilateral trade. 

Lastly, but not the least, the Budget 2020 is probably based on the assumption that the crude oil price is at US$70 a barrel. Due to the contraction and decelerating world economic growth, we need a big umbrella for the gloomy forecast ahead. – October 17, 2019.

* Captain Dr Wong Ang Peng is a researcher with an interest in economics, politics, and health issues. He has a burning desire to do anything within his means to help the new government in rebuilding our nation and promote national harmony. Captain Wong is also a member of the National Patriots Association.

* Captain Dr Wong Ang Peng is a researcher with an interest in economics, politics, and health issues. He has a burning desire to do anything within his means to promote national harmony. Captain Wong is also a member of the National Patriots Association.

* 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.