But where will the govt get the money?

 

From Nur Ain Shahrier

The 2022 Budget mainly focuses on the recovery of the economy after the Covid-19 pandemic, building the country’s resilience to prepare for an uncertain future and to undertake reforms to achieve long-term economic growth and employment.

The people- and business-centric Budget shows an increase in spending by a hefty amount to RM332.1 billion, the highest compared to all the previous budgets, with a 24% increase in development expenditure and 76% in operating expenditure.

Despite the expansion of the country’s fiscal position to 6.5%, it would be good to gain clarity on how the government plans to generate further revenues to cover its fiscal deficit other than through dividends from the state energy firm Petronas, and excise duty on sugar and nicotine products.

Economic growth that generates revenue should not only come from short-term demand-side measures such as stimulus packages, but more importantly, address the long-term structural problems emanating from the supply side, including human capital development, education, infrastructure development, connectivity, technologies and productivity.

Debt sustainability can only be achieved when our economic growth is sustained and exceeds the government’s fiscal borrowing.

The government’s commitment to upskilling initiatives especially through technological and digital platforms to create further employment in the country is applauded. These efforts will help boost demand for skilled workers.

However, it is equally important for the government to also address the problems of semi-skilled and low-skilled workers, who are vulnerable to retrenchment as technologies such as artificial intelligence take over, and informal economy workers who have been severely affected by MCO lockdowns, as the need to stay at home means losing their jobs and livelihoods.

It is hoped that not only can we generate short- and long-term economic growth, but more importantly, ensure that we narrow income inequality through more redistributive wage dispersion. -FMT

Nur Ain Shahrier is a senior lecturer at Sunway University, Malaysia.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.