KUCHING: An economist has lauded Budget 2023 as a wise move amid global challenges, highlighting its holistic approach beyond just figures.
“The government is serious in balancing the fiscal position and debt level of the country,” said Universiti Malaysia Sarawak (UNIMAS) economist Dr Jerome Kueh when contacted by New Sarawak Tribune yesterday.
“This is critical to ensure fiscal sustainability with the aim to achieve equilibrium in economic development and take care of the well-being of the people at the same time.”
Kueh highlighted the importance of continuing the expansionary policy, saying it is necessary to combat high inflation pressure and address poverty eradication, improve public infrastructure and enhance facilities in rural areas.
He did, however, acknowledge the challenges of managing the fiscal position, particularly with the increase in expenditure.
“The more you spend, the more it adds to your deficit record,” Kueh explained.
“Unless the proposed development strategies to boost up the economy are materialised with the assumption of a stable global economic environment, the spill-over effects are able to generate high returns, then it’s possible for the government to reduce the fiscal deficit.”
Kueh stressed the importance of managing debt by prioritising borrowing for projects that provide a positive return on investment (ROI), and not just a monetary one.
“It’s not just about the numbers,” he said.
“Non-monetary ROI carries more weightage because some of the outcomes of the projects may not be measured from a monetary perspective, but they can have a long-lasting impact on society.
“Take skill development, for example – it may take time to see the impact, but it is very impactful to society in the long-run.”
Kueh said under the budget, Sabah and Sarawak are allocated RM6.5 billion and RM5.6 billion respectively, mostly aimed at the development of infrastructure and basic necessity as well as commitment to ensuring the completion of Pan Borneo.
In addition, he welcomed the allocation provided to develop infrastructure and basic necessities in Sabah, Sarawak, and the cities at the border of Kalimantan, calling them “important due to the multiplier effects in terms of welfare of the people, job opportunities, and income generation to Sabah and Sarawak in the long run.”
Kueh also praised the focus on Micro, Small and Medium Enterprises (MSMEs), which are critical for creating job opportunities and contributing to the economy.
The tax reduction and RM40 billion loan facility and financing guarantee will help MSMEs survive and expand in a dynamic business world, he said.
On taxes, Kueh agreed that it was not the right time to implement the Goods and Services (GST) tax, as it may cause a burden on firms and the B40 group. Instead, he recommended targeted subsidies to reach intended groups to have a greater impact.
