THE excitement was palpable. The expectations were high. After all, it was meant to be the last national Budget before the general election.
Barisan Nasional MPs came in full force, mostly in blue Baju Melayu, the party’s colour, in a show of strength.
At times, Parliament resembled a marketplace like Penang’s Chowrasta market with shouting from both sides of the divide.
But as it turned out, Prime Minister Datuk Seri Najib Razak, who spent long days and nights formulating his “historic” 2018 Budget speech, proved his mettle as a veteran finance minister, a position he has held since 2008.
“The Budget reverberated not only in Parliament but the whole nation,” said one former cabinet minister. “The PM has never been happier in unveiling it.”
Economists said the “Mother of All Budgets”, as Najib put it, deftly addressed both the needs of ordinary people as well as the expectations of foreign investors and rating agencies, despite being an election year.
“Overall, the 2018 Budget supports our view that the government remains committed to its fiscal consolidation agenda, despite the upcoming general election, which we expect to be held sometime in March to May 2018,” said Euben Paracuelles, senior economist, Southeast Asia at Nomura.
“We expect a similar pattern in 2018, with government spending disbursements being front-loaded to the start of the year (ahead of the GE) before running tight fiscal policy in the second half of 2018 to achieve its fiscal deficit target of 2.8 per cent of GDP.”
“We continue to expect Prime Minister Najib Razak and his BN coalition to remain in power after the election,” the Nomura economist said.
Political analysts said the slew of measures outlined in the Budget would help BN consolidate its rural support in the run-up to the election and even regain some urban votes, especially among working women.
“I think it is a surprisingly responsible budget, given the need to outdo Pakatan’s populist budget,” said Amir Fareed Rahim, a political risk analyst for the KRA Group.
“Big winners are the M40, women, TN50, Sabah and Sarawak and rural,” he said. “Enough ingredients to draw the battle lines for elections.”
Najib had announced some subsidies and social assistance that would touch every segment of society, especially in rural areas. Everyone from babies to imam and fishermen to pensioners will enjoy something.
Overall, there will be a 15 per cent hike in the 2018 Budget for “subsidies and social assistance” to RM26.5 billion.
But in a move to appease the urban Bottom 40 and Middle 40, who are burdened by the escalating cost of living, the prime minister also extended some direct and indirect help to these people, who have largely turned their backs on BN in the past decades.
These came in the form of personal income tax cuts, the removal of the Federal Highway tolls, and two more tolls in Kedah and Johor, as well as cash handouts via BR1M.
Some 261,000 people will no longer be subjected to income tax with the tax reductions.
Toll charges on two sections of the Federal Highway, the most important link in the congested Klang Valley, will be scrapped from Jan 1, 2018, a gesture that will benefit more than 160,000 motorists.
Women are also the main beneficiaries of this Budget.
Najib delivered good news when he said employers could also apply for foreign domestic helpers’ visas online from the Immigration Department at the current levy and processing fees.
Employers are allowed to hire maids directly from nine countries, without going through agents.
He said the government was aware of the cost incurred by households in hiring foreign domestic helpers, which could reach as high as RM18,000.
This will be a boon to working mothers who are forced to quit their job to look after their children as it is too costly to hire a maid.
Najib didn’t attempt to disguise the fact that his Budget is aimed at securing the vote for the ruling BN coalition. “Let’s together ensure a big victory for Barisan Nasional in the 14th General Election,” he said at the end of his 80-page speech.
Najib’s budget strategy should help create a fresh “feel-good” factor as he leads BN for the second time into the polls.
Just a few days before the Budget, Najib unveiled what he called his economic vision for Malaysia, and counted the GST and TN50 as among his legacies.
He said the nation cannot continue to live with the problems of the past decades, which Najib says the government has to correct now.
The writer feels in a digital world, the winner does not always take all