KUCHING: Centre for Market Education (CME) economist Carmelo Ferlito has criticised the newly announced Budget 2023, calling for a more rational approach to government spending.
“I was hoping for a budget that would have moved in a clear direction of expenditure rationalisation, and instead we see an even bigger budget, which we do not need in the light of inflationary pressures created by government spending,” Ferlito said, adding, “we lack a holistic strategy for tax reform.”
In a scathing review of the budget, he went on to criticise the government’s decision to introduce ‘questionable’ taxes like the luxury goods tax and higher income tax for certain income brackets, instead of cutting expenses.
“The lack of targeted subsidies in the budget is a glaring disappointment, and the government’s all-talk-no-action approach is nothing short of delusional.”
“In its current form, I don’t see this budget having any real impact, positive or negative,” Ferlito insisted.
“What’s truly alarming is the government’s lack of a comprehensive strategy for tax reform. It’s nothing but a collection of populist moves like ‘tax the rich’ and ‘tax luxury goods,’ which are unlikely to produce any meaningful results.”
Ferlito also raised concerns about the government’s decision to impose taxation on vaping products, warning that it would not help reduce harm but rather further support the black market.
“The RM 500 contribution to EPF is a cheap and populist trick that won’t actually benefit the receivers. It’s merely a ploy to win over the public and reeks of demagoguery,” Ferlito told New Sarawak Tribune yesterday.
In terms of capital gains tax (CGT), Ferlito argued that now is not the right time for a full-blown CGT, given the current struggles faced by investments and the lack of a strategy for rationalising expenditure, including subsidies.
On the other hand he was however quite pleased by the government’s announcement of a new master plan for industrialisation, which he believed will finally chart a new course for the development of industries.
However, he is excited about the possibility of injecting some much-needed sanity into the government’s archaic investment schemes and reducing the number of redundant government agencies.
“It’s high time for some serious restructuring of these government agencies involved in promoting investments and GLCs. But let’s hope this commitment is not just another political lip service,” he added, emphasising the need for concrete action.
