Gov't unlikely to achieve balanced budget due to RM1 trillion debt

PARLIAMENT | The government is expected to table a budget deficit for the next few years, Finance Minister Lim Guan Eng told the Dewan Negara today.

"With our financial shortage and constraints as well as the RM1 billion debt, I fear that we are unable to achieve a balanced budget, not only for 2019, but also for the following years," he said.

The previous BN government had targeted a balanced budget by 2020, but later said that it would be delayed for several years due to fiscal challenges.

Lim was responding to Pakatan Harapan senator T Chandra Mohan who urged the government to strive for a balanced budget and channel more allocations towards development.

In his winding-up speech on the House's debate on the Supply (Reallocation of Appropriated Expenditure) Bills 2018, Lim concurred that the government should implement a balanced budget.

He also admitted that is very challenging for the government to strive to attain a balance in expenditure for operations and development, partly because close to 40 percent of the budget will be used on emoluments and pensions.

This is the fixed spending that has to be set aside before the federal government can plan for any future programme, he added.

"We expect the allocation for emoluments and pension will exceed RM100 billion next year," he said.

"This is a huge challenge when the federal government has no plans to reduce the number of civil servants," he said.

Pakatan Harapan, which will table its maiden budget on Nov 2, had criticised the previous administration for tabling consecutive budget deficits for close to two decades.

The government had tabled RM280.25 billion budget for this year, of which 84 percent or RM234.25 billion was allocated for operating expenditure.

No slashing of minister's powers

Meanwhile, Lim stressed that the restructuring of cabinet, which is meant to promote the efficiency in governance, will not see the power of certain ministers been slashed.

Citing the Prime Minister's Department (PMD), where there has been transferring out of dozens of agencies and departments, Lim said this did not mean the prime minister has lesser power.

"PMD has the most number of agencies moved out, but that does not mean the prime minister has less power. If you ask other, they are not going to agree," he said.

"Many claim the prime minister is the most powerful, so there is no issue (that some ministers' power been reduced)," he said.

"Citing another example, the health minister has surrendered the administration related to private hospitals to me.

"Although I am a bit reluctant, the cabinet decided this should be transferred to the finance ministry so the health ministry can focus on public health.

"This does not mean the power of the health ministry been slashed," he said.

MCA had claimed Lim was merely a 'bookkeeper' as prominent agencies under the Finance Ministry were transferred to the Economic Affairs Ministry. - Mkini