Budget 2025 Lowlights

 

• record budget spending of RM421 billion for 2025
• Revenue RM339.7 billion in 2025
• development expenditure RM86b operating expenditure of RM335b
• Opex 80% of budget, driven by pay hikes for 1.6m gomen employees
• RM52.6 billion for subsidies and social assistance 2025
• petroleum dividend RM32b in 2025, declining petroleum output
• benchmark interest rate 3% no change

• OSTB : How are you going to finance this RM421b Budget? 
• Revenue is only RM340b. Shortfall of about RM81b. 
• Oil revenue is RM32b, less than 8% of that RM421b Budget.
• We are no more an oil economy. Never were.
  

government boosting salaries and retirement funds for civil servants 

OSTB : Borrow more money to pay the civil servants more money, hoping they will vote for the gomen. Inflation will go up.

pursues further subsidy and tax reforms to bolster revenue
improve revenue collection, global minimum tax from 2025, subsidy rationalisation

OSTB : I told you - more taxes, less subsidies.  To pay the civil servants more money.

government on track to narrow its fiscal deficit to 3.8% of GDP

OSTB : Quite the b.s. again. Fiscal deficit to GDP means nothing. This is fake analysis. The politicians benchmark their deficit spending against the hard work of 34 million Malaysians who generate the GDP.  So what are they saying? The harder 34 million Malaysians work the more money the politicians can borrow and spend? Ini macam pandai kah?

Tell us how much of the gomen's revenue goes to service debt every year. How much interest payments plus how much principal repayments must be paid in 2025 as a percentage of gomen revenue?  That is a better indicator of how they are managing the gomen's finances.

Now we have entire shopping malls shutting down in Malaysia. You can watch the Dead Malls series at YouTube here. The cost of doing business is increasing by the day. The halal sticker issue, restrictions on foreign workers (more corruption, have to pay more money, a legal Indonesian maid costs about RM20,000, an "illegal" maid costs about RM3,000. That RM17,000 difference is corruption) are taking a serious toll on business operators. 

Now with the Minimum Wage going up to RM1,700 per month even more businesses will shut down. Worse than that newer businesses will find it harder to start up. Imagine if you hire a minimum FIVE workers to run a small business, the monthly salary, EPF and SOCSO costs will be more than RM10,000. 

Tell me how many new small businesses can generate even RM5,000 a month for the owner, the boss?   But he already has to pay RM10,000 salaries to his workers. The Boss is working for his employees. More new businesses will not start up.

If there are fewer new businesses, or weaker business profits, then tax collection will ultimately slow down in the future. What will the gomen do then?

The gomen can borrow more money. 
The gomen can invent new 'ratios'.
Deficit to price of musang king durians?
Deficit to annual rainfall in Taman Negara ?
Meaningless ratios.

And on it goes.

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