IF you reshuffle the letters in “retable”, you get “real bet”, and that summarises the gamble Prime Minister Anwar Ibrahim took when he laid out his first big strategic plan for the country.  

As expected, the budget was aimed at easing the burden of B40 – the country’s most vulnerable group and one of the largest voting blocs.

Slightly higher amounts of aid were granted as the government drove home the message for discipline to save for retirement.

Populist loosening of the rules to allow early EPF withdrawals has left the lower-income groups with barely enough for their old age.

The move to tax vaping products is a three-pronged conundrum involving 1.1 million people in a RM2.27 billion industry.

First, the government has stated its support for the generational endgame law to end smoking, including vaping. This means the tax is only a temporary source of income.

Second, the move to improve the healthcare system with this money creates a moral medical dilemma – the more people vape, the more the healthcare system is improved. But the more people will need to healthcare because their health has deteriorated from vaping

Third, like cigarettes and alcohol, regulating vape could create a bigger market for illicit items. 

Narrowing the tax base and widening social security net is a necessary evil now, but one must consider the future.

Economists and politicians generally agree that a wide-based consumption tax such as the GST is badly needed as we cannot rely on oil or other natural resources forever, and there are too many leakages in the current taxation system. 

Perhaps vulnerable groups in the B1 and B2 brackets of B40 could be given cash handouts or living necessities instead to shield them from the system.

The reality is the B40 group simply does not consume as much as the M40 and T20 groups. While stop-gap measures like Menu Rahmah and stalling GST are popular and badly-needed, we need more strategic, sustainable, and practical steps.

Luxury tax, for example, is a risky implementation. It is arguable that the rich are, in fact, the biggest bargain hunters who shop for value

Shoppers from abroad choose Malaysia despite higher prices, because of our status as a progressive Muslim country, or our weather or location.  

The classification itself is problematic, especially on top and at the bottom. B40 is treated as a bloc when in reality, they range from hardcore poor to urban poor. T20 ranges from your average senior manager to billionaires.

There should be a bottom 10% and a top 0.01% bracket with generous handouts for the first and hefty taxes for the second. 

The budget has always faced two issues.

One, the growing costs of a large civil service in which jobs overlap, new agencies created and old ones retained.

Two, subsidies are not reaching their target audience.

The present administration appears to recognise this and has taken steps to remedy it, by exercising cautious language and posture in the budget. It keeps mostly to the status quo, attempting to help the B40 and taking small steps towards a progressive tax system. 

It is a budget that sets the tone for progress, with calculated risks. – March 1, 2023.

* Emmanuel Joseph firmly believes that Klang is the best place on Earth, and that motivated people can do far more good than any leader with motive.

* 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.