How to make it a real people’s budget

 

An economist says the federal budget for 2022 should include higher spending on the people’s welfare.

PETALING JAYA: The 2022 federal budget should focus on improving the social safety nets in line with the inclusivity promised by the 12th Malaysia Plan launched recently, says an economist.

The budget is due to be tabled in the Dewan Rakyat on Oct 29.

Barjoyai Bardai, a professor at Universiti Tun Abdul Razak, said the inclusivity promoted by the 12th Plan should be embraced through greater emphasis on social expenditure in the budget.

“Compared to other countries in the region, we spend far less. We spend less than 5% of our GDP on social expenditure, whereas other countries commit closer to 20% on things like safety nets and initiatives to improve the people’s wellbeing,” he told FMT.

Barjoyai Bardai.

“So, I’d like to see Malaysia inch closer to 10% in the next budget. This is doable, and it will show the world that we mean it when we say we are a caring country.”

He also said Malaysia’s Gini coefficient, a measure of income inequality, was still relatively high compared to regional neighbors.

“We need to look at how we can hit the new target of 0.388, and invest in ways to allow people from lower-income groups to grow their wealth.

“We need to be leveraging technology to help poor communities more efficiently. We need to be able to make sure that if they apply for aid or financing, approvals can be made and distribution or disbursements can be made as quickly as possible.”

Carmelo Ferlito, CEO of the Center for Market Education, said expenditure needs to focus on long-term objectives rather than short-term solutions that create future issues.

Carmelo Ferlito.

“I want to see a budget that steers clear of ambitious targets that are funded by taking on additional debt,” he said.

He also said he hoped to see a restructuring of the taxation system away from direct taxes, which would mean lower taxes on personal income and company revenue, and more indirect taxes like the reintroduction of a newly formulated goods and services tax (GST).

“Also, inflation is going to rise due to the pandemic, which will lower purchasing power, weaken the ringgit and increase the costs of imports. This has been caused by shocks to supply, so the government needs to work to restore and rebuild the supply chain to mitigate these risks,” he said.

On policies for the impoverished, he said he hoped to see less emphasis on the provision of affordable housing and more money for initiatives to spur social mobility, such as assistance with house rent, to allow Malaysians to move to areas where better work is available. - FMT