THE 2017 Budget unveiled last Friday was a high-wire act, balancing competing goals of accelerating growth, maintaining fiscal prudence and boosting people’s wellbeing.
The tough economic climate denied Prime Minister Datuk Seri Najib Razak the balancing pole to walk the tightrope of accommodating these imperatives without compromising any.
Kudos to Najib for unveiling a people-centric budget in line with the government’s slogan of 1Malaysia: People First, Performance Now.
The budget personifies the government’s empathy for people’s needs as it responds to the escalating cost of living, Goods and Services Tax (GST), increasing cost of healthcare and scarcity of affordable housing.
The initiatives improve the lives of all Malaysians.
In ensuring that the country is on a growth trajectory, the government has decided that it is not the time to cut the budget, more so given the moderate growth globally.
It is crucial to keep growth on an even keel lest it stalls and goes into a tailspin.
Thankfully, despite its tightening revenue position, the government has retained GST at 6 per cent.
The increase in 1Malaysia People’s Aid (BR1M) payouts, from RM50 to RM300 for low-income households and individuals, will enable a quarter of the population to better cope with the rising cost of living.
The budget is also a way to convince investors of the government’s
stewardship of the economy.
The government has shown political stamina for fiscal discipline, amid trying circumstances, in bringing down the budget deficit from 3.1 per cent of gross domestic product this year to 3 per cent next year.
All indicators point to the government being on track to a balanced budget come 2020.
The proposed deficit reduction may seem small, but it eases the pressure on the public debt situation, which will remain within the statutory limit of 55 per cent.
More important, the deficit reduction is emblematic of the government’s willingness to tighten its belt for the long-term prosperity of the nation.
The increased capital expenditures on infrastructure, trade and investment, research and development, human capital development and the promotion of a supportive ecosystem for small-and-medium scale enterprises will boost the economy.
That should secure our targeted growth rate of 5 per cent and stay on course to becoming a high-income nation by 2020.
Having contributed to 18 per cent of GDP last year, the digital economy is the way forward.
In the 2017 Budget, broadband width will be boosted four times to 20Mbps.
Malaysia is one of the top 10 countries with the slowest Internet speeds.
Hong Kong’s Internet speed is 10 times faster.
To walk the tightrope, the prime minister developed a budget that focuses on growth, fiscal restraint and people’s welfare.
PROFESSOR DATUK DR JOHN ANTONY XAVIER,
Strategic Centre for Public Policy,
Graduate School of Business,
Universiti Kebangsaan Malaysia