THERE are ways and means for the government to fund its Budget 2024, which at RM393 billion is the largest budget ever, economists said.

Addressing posers if the budget would overstretch the nation’s financial limitations, they said Putrajaya would issue bonds or treasury papers that would be sold to companies or institutions under government control to raise funds.

They said the government could also seek loans from domestic investment institutions such as Employees Provident Fund (EPF) and Perbadanan Nasional Bhd (PNB).

“The question that has been raised is, where will Putrajaya get the money to fund the increase in government handouts under Budget 2024,” said Prof Barjoyai Bardai of Universiti Tun Abdul Razak.

“It will come from loans from entities such as EPF, PNB or even Tabung Haji.

“The government will also issue bonds or treasury papers that will be sold to government-controlled institutions.”

He said the increased budget would not reduce the debt, which stands at RM1.5 trillion, but maintained it at the “allowed” level, which is 65% from the nation’s GDP.

In his budget announcement on Friday, Prime Minister Anwar Ibrahim allocated RM393.8 billion, of which RM303.8 billion is for operating expenditure, RM90 billion for development expenditure and RM2 billion for contingency savings.

The budget contains integrated policies such as the National Energy Transition Roadmap, the New Industrial Master Plan 2030 and the mid-term review of the 12th Malaysia Plan in line with the Madani Economy framework.

To expand revenue, several taxation reforms are to be implemented, including increasing the sales and service tax rate (excluding food and beverages and telecommunications) to 8% from 6%.

The budget also sees additional financial assistance, from Rahmah payments to special payments to various groups.

Barjoyai said the budget aspires to fulfil the needs of the B40 group.

“Middle-income earners did not receive any incentive because the government feels that they don’t need it,” he said.

“I think the budget can achieve its short-term goals and provide financial aid to civil servants, pensioners and the poor through its ‘Bantuan Khas’.”

No mega projects

Putra Business School Master of Business Administration programme director Ahmed Razman Abdul Latiff said the government is able to increase its handouts because it no longer has commitments to complete mega projects.

He said most of the projects announced by Anwar were repair works for infrastructure involving schools and hospitals.

“The government also introduced several forms of taxation such as luxury tax and the increased sales and service tax. All these will contribute to the increase in incentives,” he said.

Anwar announced that civil servants’ salaries and allowance scheme would be revised by the end of next year, and in the interim, civil servants, including contract appointees, would receive RM2,000 each.

The salary and allowance scheme for civil servants was last revised in 2012.

Anwar also announced a RM1,000 incentive for all government pensioners.

The government also allocated RM500 million to improve the participation rate of the People’s Income Initiative.

Some 700,000 Rahmah cash aid recipients will qualify for the Sumbangan Asas Rahmah (Sara) initiative. They will receive RM100 monthly over 12 months.

Through Sara, recipients need only show their MyKad when buying certain items at retail stores. – October 17, 2023.