The prime minister has already made some preliminary remarks about the 2025 budget. In a recent statement, he has mentioned that he proposes to address inflation and the cost of living.
There will certainly be many other issues that the federal budget will attempt to address, among them low government revenue, subsidy rationalisation and inequality.
The focus should be on productivity. The constraints that the economy is up against demand that there be special emphasis on productivity simply because we want a good return on the allocation of resources.
I use
rather loosely here since it can be measured in several ways. We can look at productivity as the increase in output per worker or the increase in sales. But I think we need to look beyond narrow measures of productivity.productivity
Ways should be devised by which the increments result in greater efficiency, better delivery of services and lower waiting times. Along with the right incentives, an appropriate set of dis-incentives is necessary to ensure that there is adequate motivation to perform well.
The 2025 budget report should not be one in which individuals, companies and groups see opportunities to extract rewards without contributing in commensurate terms. We cannot afford to reward cronies, or provide for people to receive rewards due to some privilege or other.
The prime minister has made it abundantly clear (and repeatedly) that the country will not tolerate corruption. It might be difficult to address corruption directly in the budget paper, but it can, nonetheless, be undertaken.
We can devise institutional arrangements that do not tolerate bribery; government procurement can be made transparent and process-driven; and supervisory oversight can be tightened so that 1MDB-like incidents do not recur. Some of these issues can be taken up in a budget speech while others will have to be handled differently.
The 2025 budget will offer explicit opportunities for companies but they will have the responsibility of looking beyond the immediate incentives that are offered.
The question of research and development (R&D) has been a vexing one. R&D contributes to productivity and should be encouraged.
If a very short-term view is taken, R&D is a cost that a family-owned business would want to avoid.
Money spent on an expensive car will result in a higher level of satisfaction immediately, while investment in R&D is uncertain and which requires a gestation period. But it is necessary if we want to be competitive and succeed in global markets. This is an area for the private sector, especially the smaller companies, to take up with the relevant government agencies.
Small and medium-sized enterprises (SME) can be the lifeblood of a country’s economy, as shown in Korea and Taiwan. The SME sector should take advantage of the opportunities that present themselves in the budget and they should be supported in their attempt to innovate and create the
.Malaysia Brand
Under present circumstances, with tight fiscal conditions and an uncertain global environment, individuals, companies, and the government must work to take advantage of the opportunities that are available.
There must be a shift in mindset. Economic agents must think in terms of capitalising on the opportunities that are available. They have to think in terms of taking advantage of opportunities, even creating them.
A more entrepreneurial attitude is necessary. As part of the mindset shift, the government should project itself as a facilitator for the realisation of opportunities, not solely as a provider of opportunities.
The 2025 Budget can be the milestone for the economic agenda of the coming decade. But that can happen only if individual effort, entrepreneurship and talent are rewarded. The economy will not be able to drive ahead if rewards are based on privilege and special advantage.
Rewards must be earned, and opportunities seized. - FMT
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