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Friday, October 21, 2016

Budget 2017 - bouquets and brickbats

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Prime Minister Najib Abdul Razak tabled the Budget 2017 in Parliament this evening, where he unveiled his own vision called 'Transformasi Nasional 2050' (National Transformation 2050).
The budget speech theme for this year is "Accelerating Growth, Ensuring Fiscal Prudence, Enhancing Well-being of the Rakyat".
However, the opposition voiced their disagreement by staging a walkout after displaying placards stating 'Siapa MO1?' (Who is MO1?)
Reactions to the budget have been quick to pour in from both sides of the political divide as well as from observers and analysts.
International Trade and Industry Minister Mustapa Mohamed:
The prime minister presented a balanced, comprehensive and inclusive budget which focused ways on raising disposable income among the rakyat and encouraged upscaling, re-skilling and entrepreneurship training as well as providing more physical incentives for the people and businesses, especially for SMEs.
I am particularly pleased that the PM has debunked erroneous perceptions regarding our country and its economy. Such a strong statement from the PM will definitely enhance investor confidence and dispel worries regarding the economic health of the nation.
This is testimony that the government’s policies are indeed on track to bring further development and benefits not just to business but the rakyat. But most of all, PM reiterated in his speech on the importance of national unity and inclusiveness that will drive forward the development of the nation towards 2050.
Penang Umno chief Zainal Abidin Osman:
Thank you, PM, for allocating an Urban Transformation Centre (UTC) which comes with a job centre for Penang.
Thank you for the allocation to improve facilities and services of specialist doctors at the Penang Hospital.
Thank you also, for the other allocations which will be enjoyed by the people of Penang such as the health services, infrastructure development, education and higher education, welfare, sports, security, housing, socially and economically for the safety and comfort of the rakyat.
MIC treasurer-general S Vell Paari:
After examining the budget thoroughly, it is proven that this is what's best for the rakyat.
Budget 2017 shows the government's commitment in handling expenses in a responsible way to guarantee that the quality of services to the rakyat remain top notch. This comprehensive budget will ensure that the government will fulfill all their promises to the rakyat.
PKR Youth information chief Lee Chean Chung:
I feel disappointed with Budget 2017 tabled by the PM just now, who failed to come up with plans and solutions to address the issues of the economy and rising cost of living for the youth.
Even more disappointing is that with the youth being ignored like this, Budget 2017 seems to be a desperate measure to safeguard the political interests of Umno and BN ahead of the elections that will take place next year.
Bursa Malaysia Berhad chief executive officer Tajuddin Atan:
Budget 2017 sets a solid agenda that will help foster sustainable growth of the market.
The Small and Mid-Cap PLC Research Scheme and the GLiCs RM3 billion special fund should create a sustainable ecosystem to promote the visibility and vibrancy of these 300 companies.
Both these announcements are opportune as we have a ready pool of small and mid-cap companies that could benefit from these programmes. By increasing visibility and accessibility through both research coverage and sales distribution; local institutions, retail investors as well as foreign funds will find it easier to invest in these companies.
The special fund that will be allocated by GLiCs will certainly be an added boost for these companies as there will be a greater pool of investors that these companies can tap into.
Centre of Public Policy Studies (CPPS) chairperson Ramon Navaratnam:
The Budget has been prudential and pragmatic. It's a juggler's budget and a nightmare to keep all the balls in the air.
Both the macro issues and the people's expectations have been reasonably balanced. The economic fundamentals of containing the fiscal deficit, keeping the lid on the national debt and managing the declining balance of payments deficit and also constraining the damaging inflation, have been commendably handled.
On the micro side, what have the rakyat gained?
It's a very B40 and M40 budget. The focus has been in allocating funds that will benefit a large number of the poorer sectors of the economy. Significantly, no taxes were introduced and would give the impression that this is an election budget.
But it is a pity some structural policy changes were not announced to make Malaysia more competitive and more meritocratic and sustainable.
Institute for Democracy and Economic Affairs (Ideas) chief executive officer Wan Saiful Wan Jan:
We are astonished that the government appears to be proud that increasingly more people are depending on and in need of such welfare assistance (BR1M). Success should be measured not in there being more people being on the programme but fewer and decreasing recipients each year to the point that we no longer need it.
We should be concerned that there is a need to increase this allocation each year. BR1M is at risk of becoming a permanent entitlement.
Najib must be congratulated on moving away from blanket subsidies. When his predecessors introduced such measures, the intentions were noble and appropriate for the time.
However, the continuation of such subsidies resulted in long term problems of affordability and sustainability. If Najib wants to leave a positive legacy as a responsible PM, he must move beyond the reliance on debt to solve problems.
Talent Corporation Malaysia Berhad (TalentCorp) chief executive officer Shareen Shariza Abdul Ghani:
TalentCorp welcomes the Government’s announcement for Budget 2017, which includes Malaysians at home – particularly women and young talent – in its plans towards nation building.
TalentCorp will do its part to deliver these Budget 2017 measures, by working with leading employers to better enable Malaysian talent to access high income career opportunities arising from the economic transformation.
Penang Institute Economic Studies team:
An analysis by population shows that Malaysia is over-served by civil servants. There are 1.6 million civil servants in Malaysia or approximately 5.5 percent of Malaysia’s population. This is in contrast to Singapore which has an efficient civil service of 1.4 percent of the population.
Analysing it from the angle of the size of the economy, we show that Germany which is also a federation, has 4.18 million civil servants at the federal, landers and city level. They collectively work in the German economy which has a GDP of US$3.636 trillion.
Using the same German ratio of GDP to civil servants, it mean that Malaysia, which has a GDP of about US$375 billion, would only need about 430,000 civil servants.
Whilst Singapore and Germany are highly efficient countries, having a civil service close to four times larger than them indicate that there are immense opportunities for efficiency gains in Malaysia.
One should recognise that a reformed civil service will not only help address the budget deficit but will also release talent and labour into higher paying private sector jobs since unemployment rate in the country is low.
Secondly, as household debts as a proportion of GDP is over 85 precent in Malaysia, extending higher debts to civil servants might not be sustainable in the future. Malaysian households require debt consolidation to reduce the debt burden, rather than greater reliance on debt for consumption.
Lembaga Tabung Angkatan Tentera (LTAT) chief executive Lodin Wok Kamaruddin:
The government has once again announced a fiscally responsible budget that prioritises the welfare of the rakyat. It is a reflection that the government is serious and committed about building a better Malaysia for the future of all Malaysians.
LTAT is heartened to note that the government will be providing a special insurgency incentive payment to Armed Forces veterans amounting to RM55 million to enable those who have lost their abilities during their service in addition to disability pension.
Former group editor of New Straits Times Mustapha Kamil:
First, just as in yesteryears, the Budget 2017 was laced with political undertones as once again the rural folks became the target group for goodies, although its sincerity will always be doubted.
Looking at the escalating cost of living and the persistently weak oil price which presents a bleak picture of the economy, the Najib administration is tightening the noose around their necks further as society will continue to expect government handouts even as the government's financial situation tightens.
The other thing about the Budget 2017 was that like the ones before, Najib was his own 'courageous' self when talking in monologue.
He twisted and turned, said 'jokes' that did not sound funny, and preached on things that he did not practice. When he called on Malaysians to forgo expensive restaurants, the social media went ballistic with tales of super expensive handbags.
Somehow I wished Najib could be as glib and as 'courageous' as he was in the Dewan Rakyat in answering questions about his involvement in the 1MDB scandal. But that has so far remained a wish.
Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) president Ter Leong Yap:
I think the civil servants' emolument is too big, it's hard to reduce… We have 1.6 million public servants, a bit too much according to our population. But private sector is having difficulty in finding employees.
I don't know whether government will collaborate with the private sector. If civil servants wish to join the private sector, the government can give incentives to the corporate sectors that want to accept former civil servants.
If 10 percent of them enter private sector, the government can reduce expenditure.
Penang Institute economics analyst Dr Lim Kim Hwa:
It feels like a populist budget. A lot is dished out for civil servants and this is certainly a concern. There is also concern in terms of high households debts, for example, loans for motorcycles.
As expected, this budget will be readjusted again next year. Over a longer period, it is unlikely that Malaysia will be able to achieve a balance or surplus budget because of its ballooning civil service.
Based on a simple analysis, Malaysia is over-served with 1.6 million civil servants. That is about 5.5 percent of the population. Compare this to super efficient Singapore, which has only 1.4 percent.
Is the civil service acting as a sponge to employ unemployable people rejected by private sectors? This needs to be looked at a higher level.
Penang Consumer Protection Association president Koris Atan:
The incentive for taxi drivers to try out ride-sharing or Uber is good but the government should think of ways to improve the attitude of drivers.
The prime minister's confirmation that there will be no GST hike is welcomed.
But in terms of presentation, the prime minister should not be bothered with rumour mongering.
He should have just presented the budget professionally, instead of taking potshots at his opponents.
There are also little incentives for singles who have to take care of their parents and relatives.
International Real Estate Federation (Fiabi) Malaysia chapter vice-president Michael Geh:
I laud the 100 percent stamp duty exemptions for first time house buyers (under Pr1ma) and this will stimulate the residential housing market.
This will be good for first time buyers. However, it will be excellent if the incentive can be given across the board.
Penang Real Estate and Developers Housing Association (Rehda) chairperson Toh Chin Leong:
There is nothing significant for us in this budget. As for the waiver of stamp duty, it is for Pr1ma housing.
Why not also allow that for other developers? We are not asking for all buyers but for those who purchase affording housing.
Also, there is nothing said about making it possible for buyers to obtain loans. Many are rejected by banks nowadays. No point for stamp duties if buyers can't get loans.
Student activist Anis Syafiqah Mohd Yusof:
The issue is the expensive university fees and the fact that the fees are not standardised across public universities is perhaps due to the fact that the budget for public universities was cut from RM8.7 billion to RM7.3 billion in Budget 2016.
But the budget this time increased allocation for the 20 public universities from RM7.3 billion to RM7.4 billion, so shouldn't the government standardise the fees of all public universities?
National ICT Association of Malaysia (Pikom) chairperson Chin Chee Seong:
The announcement of higher broadband speeds at existing prices and plans to reduce prices at double the speeds is long overdue.

This is the right step, but the government’s decision not to make ICT goods and services GST zero-rated is a missed opportunity to really benefit almost all Malaysians.
While allocations of RM1 billion have been made to ensure that broadband speed hits 20 megabytes per second nationwide, we hope the implementation will be swift.
The focus on E-commerce and start-ups also bode well for the industry and will serve as a catalyst for further growth.-Mkini

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