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Govt to spend record RM207.9b on people-friendly goodies like tax cuts
By Carolyn Hong
KUALA LUMPUR: Prime Minister Abdullah Badawi yesterday unveiled a record spending budget packed with tax cuts and other people-friendly measures, as the government moved to quell unhappiness over the rising cost of living.
The government plans to spend RM207.9 billion (S$86.7 billion) next year in a budget that will help ease political pressure on Datuk Seri Abdullah, as he faces a resurgent opposition capitalising on the disenchantment of ordinary Malaysians.
Significantly, more than RM7 billion was set aside for Sabah and Sarawak, the two states that hold the key to federal political stability as opposition leader Anwar Ibrahim woos its MPs to join his side.
‘The tabling of the 2009 budget demonstrates yet again that the Barisan Nasional government is responsive to the concerns of the rakyat (citizens), and has taken measures to lighten the burden of all Malaysians,’ Mr Abdullah said when presenting it in Parliament.
He took the opportunity to slam the opposition which has promised to scrap the official pro-Malay economic policies, and to reduce petrol prices if it took office.
He labelled its promises as ‘political rhetoric’, and vowed he will not allow Datuk Seri Anwar to topple the federal government.
‘Efforts by certain parties to destabilise the country by attempting to seize power through illegitimate means, and without the mandate of the people, must be rejected,’ he said.
This is Mr Abdullah’s first budget after the March 8 polls which saw the BN losing its iron grip on the government. The biggest election issues at that time were the rising cost of living and crime.
Later surveys, including one conducted during the Permatang Pauh by-election which saw Mr Anwar elected as MP, also showed the rising cost of living to be Malaysians’ biggest concern.
Inflation spiked to 8.5 per cent last month, the highest in 27 years.
After Mr Abdullah became premier in 2003, he tried to scale back spending by shelving major infrastructure projects. However, since last year, government expenditure had begun to soar as it tried to kick-start a slowing economy.
Mr Abdullah did not explain how the government planned to finance the increased spending. Other than increasing the excise duty on cigarettes, there were no measures to enhance revenue.
Mr Anwar, who is parliamentary opposition leader, was quick to point this out, criticising it as a budget ‘in response to public frustration over rising inflation’.
‘We are still in a state of denial. We are not able to shift from obsolete policies. The issue of competitiveness is not addressed,’ he said.
The increased spending will raise this year’s fiscal deficit to 4.8 per cent of the gross domestic product. The government projects the economy to grow by 5.4 per cent next year.
Among the measures proposed for the poorest were raising the eligibility criteria to enable more people to qualify for welfare assistance, and to waive payments for households which incur monthly electricity bills of RM20 or less.
The tax rebate has also been increased for those with a taxable income of RM35,000 or below. About 100,000 workers are now exempted from paying tax. The income tax rate has been cut by one percentage point for middle- and high-income earners,
Import duties on a wide range of food products and basic electrical items such as kettles were reduced.
The allocation of more than RM7 billion for infrastructure development in Sabah and Sarawak comes on the heels of complaints by politicians in the two East Malaysia states that they had been neglected. Both bucked the trend of the dismal showing by the BN in the general election, and had been unhappy that they had not been rewarded with more government positions.
Sabah MPs have, in particular, been vocal. The Sabah Progressive Party, a small party with two MPs, had threatened to table a no-confidence vote against Mr Abdullah but has not done so.
Parliament went into recess yesterday and the debate on the budget is scheduled to start on Oct 12 when it resumes sitting after a six-week break, coinciding with Ramadan and Hari Raya.
[email protected]
Govt to spend record RM207.9b on people-friendly goodies like tax cuts
By Carolyn Hong
KUALA LUMPUR: Prime Minister Abdullah Badawi yesterday unveiled a record spending budget packed with tax cuts and other people-friendly measures, as the government moved to quell unhappiness over the rising cost of living.
The government plans to spend RM207.9 billion (S$86.7 billion) next year in a budget that will help ease political pressure on Datuk Seri Abdullah, as he faces a resurgent opposition capitalising on the disenchantment of ordinary Malaysians.
Significantly, more than RM7 billion was set aside for Sabah and Sarawak, the two states that hold the key to federal political stability as opposition leader Anwar Ibrahim woos its MPs to join his side.
‘The tabling of the 2009 budget demonstrates yet again that the Barisan Nasional government is responsive to the concerns of the rakyat (citizens), and has taken measures to lighten the burden of all Malaysians,’ Mr Abdullah said when presenting it in Parliament.
He took the opportunity to slam the opposition which has promised to scrap the official pro-Malay economic policies, and to reduce petrol prices if it took office.
He labelled its promises as ‘political rhetoric’, and vowed he will not allow Datuk Seri Anwar to topple the federal government.
‘Efforts by certain parties to destabilise the country by attempting to seize power through illegitimate means, and without the mandate of the people, must be rejected,’ he said.
This is Mr Abdullah’s first budget after the March 8 polls which saw the BN losing its iron grip on the government. The biggest election issues at that time were the rising cost of living and crime.
Later surveys, including one conducted during the Permatang Pauh by-election which saw Mr Anwar elected as MP, also showed the rising cost of living to be Malaysians’ biggest concern.
Inflation spiked to 8.5 per cent last month, the highest in 27 years.
After Mr Abdullah became premier in 2003, he tried to scale back spending by shelving major infrastructure projects. However, since last year, government expenditure had begun to soar as it tried to kick-start a slowing economy.
Mr Abdullah did not explain how the government planned to finance the increased spending. Other than increasing the excise duty on cigarettes, there were no measures to enhance revenue.
Mr Anwar, who is parliamentary opposition leader, was quick to point this out, criticising it as a budget ‘in response to public frustration over rising inflation’.
‘We are still in a state of denial. We are not able to shift from obsolete policies. The issue of competitiveness is not addressed,’ he said.
The increased spending will raise this year’s fiscal deficit to 4.8 per cent of the gross domestic product. The government projects the economy to grow by 5.4 per cent next year.
Among the measures proposed for the poorest were raising the eligibility criteria to enable more people to qualify for welfare assistance, and to waive payments for households which incur monthly electricity bills of RM20 or less.
The tax rebate has also been increased for those with a taxable income of RM35,000 or below. About 100,000 workers are now exempted from paying tax. The income tax rate has been cut by one percentage point for middle- and high-income earners,
Import duties on a wide range of food products and basic electrical items such as kettles were reduced.
The allocation of more than RM7 billion for infrastructure development in Sabah and Sarawak comes on the heels of complaints by politicians in the two East Malaysia states that they had been neglected. Both bucked the trend of the dismal showing by the BN in the general election, and had been unhappy that they had not been rewarded with more government positions.
Sabah MPs have, in particular, been vocal. The Sabah Progressive Party, a small party with two MPs, had threatened to table a no-confidence vote against Mr Abdullah but has not done so.
Parliament went into recess yesterday and the debate on the budget is scheduled to start on Oct 12 when it resumes sitting after a six-week break, coinciding with Ramadan and Hari Raya.
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