Commentary Politics

The budget that shows the country has money after all

Budget-2019_Taxes_theedgemarkets

Zaidi Azmi
Written by Zaidi Azmi

November 3, 2018.

FOR quite some time the talk was about the country’s weak fiscal position due to misdeeds by the previous Barisan Nasional administration and thus economists and research houses had mostly predicted a lot of belt-tightening but what was unveiled on Friday in Parliament for Budget 2019 was simply the opposite.

The most pertinent point was on the increase in the allocation for development expenditure, a total of RM54.7 billion compared to the previous budget’s RM46 billion or a difference of 18.9 per cent. Budget 2016 set aside RM52 billion for this.

The total allocation for 2019 is RM314.5 billion – up 12.2 per cent compared to Budget 2018. 

Overview of Malaysia’s budget 2018 and 2019

Category

2018

2019

Percentage difference

Total Allocation

RM280.25 billion

RM314.5 billion

↑12.2

Revenue Collection

RM239.9 billion

RM261.8 billion

↑9.12

Fiscal Deficit

2.8 per cent

3.4 per cent

 

Operating expenditure

Total Allocation

RM234.45 billion

RM259.8 billion

↑10.8

Development expenditure

Economic sector

RM26.34 billion

RM29.2 billion

↑10.8

Social sector

RM11.72 billion

RM15.2 billion

↑29.6

Security sector

RM5.22 billion

RM7.1 billion

↑36.0

General admin.

RM2.72 billion

RM3.2 billion

↑17.6

Total

RM46 billion

RM54.7 billion

↑18.9

And after all the statements about the country’s national debt being at RM1 trillion instead of the RM680 billion mentioned by BN up to the end of last year, Finance Minister Lim Guan Eng stated when tabling the budget that as of the second quarter of this year national debt was at RM725.2 billion.

“Thanks for voting us; here are your goodies…”

Lim described his proposals as “a thank-you-for-voting-us”, which perhaps explains why it is embellished with goodies, particularly for urbanites.

And contrary to Prime Minister Tun Dr. Mahathir’s distaste for cash handouts like the 1Malaysia People’s Aid Programme (BR1M), the government will continue giving direct cash aid to the needy through the rebranded BR1M now called the Cost of Living Allowance.

Households with a monthly income of RM2,000 and below will receive RM1,000, those with an income from RM2,001 to RM3,000 will get RM750 while those with an income from RM3,001 to RM4,000 will receive RM500.

Under BR1M, those with an income of RM3,000 and below were given RM1,200 while those earning between RM3,000 and RM4,000 were given RM900.

The budget which aims for a fiscal deficit of 3.4 per cent also says that the government plans to subsidise the RON95 petrol for those with cars below 1500cc and motorcycles below 125cc. The BN government instead introduced a scheme where prices were floated according to the global price of crude oil.

Those riding motorcycles on the two Penang bridges and the Second Link to Singapore will no longer have to pay toll from January 1.

Also come 2019, those in the Klang Valley are guaranteed no toll hikes on highways criss-crossing the city. There will also be public transportation passes priced at RM50 for unlimited trips on RapidKL buses and RM100 for RapidKL’s rail and bus services.

Cloudy skies for farmers and fishermen

But while the budget is urban-friendly, there is nothing offered to paddy farmers and fishermen so it is not known if the off-season allowance of RM200 for paddy farmers will be continued.

Also not mentioned was the incentive for fertilisers and production input for fishermen, rubber smallholders and farmers, which BN last year allocated RM2.3 billion.

The budget for agriculture is drastically reduced from RM6.5 billion to a mere RM117 million.

Increase in minimum wage and mandatory PTPTN repayment synchronicity

The most eyebrow-raising announcement was the increase in minimum wage by RM50, from RM1,050 to RM1,100 as previously announced, and the mandatory PTPTN repayment salary deduction scheme for those earning more than RM1,000.

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About the author

Zaidi Azmi

Zaidi Azmi

If Zaidi Azmi isn’t busy finding his way in the city, this 26-year-old northern kampung boy can be found struggling to make sense of the Malaysian political scene. Zaidi can be reached at [email protected]