BUDGET 2022 is a step in the right direction but falls short of setting out clear strategies to overcome an impending budget crisis in the next three to five years, Tony Pua said today.
 
The Damansara lawmaker said this is due to the increased fiscal outlook which is estimated to hit 13.9% of the gross domestic product (GDP) in 2022-2024 as well as the increase in fixed payments and charges which constitute 45% of the operating expenditure under Budget 2022.
 
Fixed payment and charges are emoluments, pension, debt service charges, grants and transfers to state governments.
 
“In simple terms, in future, the Government will have less funds to spend, invest and influence the economic direction of the country,” the Damansara MP said in a statement.
 
Finance Minister Tengku Zafrul Tengku Abdul unveiled a RM332.1 billion allocation for Budget 2022 earlier this evening.
 
This is the biggest allocation in the history of the country to date.
 
Budget 2022 is themed Keluarga Malaysia Makmur Sejahtera. Its three thrusts are Restoring Livelihoods, Rebuilding Resilience and Catalyst for Recovery.
 
The operating expenditure accounted for the bulk of spending at RM234 billion compared with RM219.6 billion in 2021.
 
Pua said the government spending on mega projects under the leadership of former prime minister Najib Razak has also led to massive debts accumulated by the government.
 
“The reckless off-budget expenditure for mega projects and scandals under Najib Razak’s BN administration is coming home to roost as the government commences payments for these debts.”
 
Malaysia’s debt service charges are expected to rise from 13.2% in 2018 to 18.5% in 2022.
 
These fixed charges, Pua added, also mean that less has been allocated to supplies and services, subsidies and social assistance and other miscellaneous expenses.
 
“This ‘squeeze’ arising from the rapidly expanding fixed charges will culminate in a potential fiscal crisis in the medium term, exacerbated by the declining government revenue as a percentage of the GDP.”
 
While the government has been able to make do with a tightened operating expenditure over the past two years by way of special allocation under the Covid-19 fund, this allocation will no longer be made available once the epidemic is brought under control, he added.
 
“It is now critical for the Ministry of Finance to address how they plan to avert the impending crisis as the measures must be put in place today, and not before it is too late.”
 
Despite the shortcomings, Pua commended the government for adopting Pakatan Harapan’s proposals.
 
“The Minister of Finance must be commended for agreeing to adopt a series of critical measures proposed by Pakatan Harapan as part of our extensive engagement provided for under the Memorandum of Understanding between the Government and PH.”
 
The government has allocated RM40 billion under the SemarakNiaga programme to assist businesses to recover from the Covid-19 epidemic, covering loans, guarantees and equity injections. The programme is available to all businesses big and small.
 
Other proposals that were adopted include the protection afforded to self-employed and gig workers through Socso, RM120 million allocation for vernacular schools, RM140 million for takfiz schools and the JaminKerja initiative to provide hiring incentives to employers.
 
Other programmes spearheaded by Pakatan such as i-Suri, renamed as Program Kasih Suri Keluarga Malaysia , have also been allocated an additional RM80 million. – October 29, 2021.