KUALA LUMPUR: With the aim to ensure a “clean” Malaysia, the Pakatan Harapan government is implementing a zero-based budgeting exercise for Budget 2019 to achieve improved effectiveness, greater efficiency and higher cost-savings, and to avoid reckless mega spending and mega debts.
When tabling the budget at the Dewan Rakyat yesterday, Finance Minister Lim Guan Eng said the zero-based budgeting exercise was implemented by ensuring that spending is justified by objectives rather than the previous year’s budget; reviewing alternative scenarios to achieve the same objectives; and ensuring that all discretionary spending is planned from zero.
Lim said despite facing fiscal challenges, Malaysia’s financial sector remained healthy and that the monetary sector is stable.
He said overall, for 2019, the federal government was expecting to receive revenue of RM261.8 billion.
Themed “A Resurgent Malaysia, A Dynamic Economy, A Prosperous Society”, the national budget for 2019 allocated a sum of RM314.5 billion, with RM259.8 billion for operating expenditure and RM54.7 billion for development expenditure, and underlined three focus areas with 12 key strategies to map out a path to restore the Malaysian economy as an Asian Tiger.
Lim said the government would also table a new Government Procurement Act next year to govern procurement processes to ensure transparency and competition, and a Fiscal Responsibility Act in 2021 to avoid reckless mega spending that entails mega debts.
The Finance Minister also said that the government would set up a Debt Management Office responsible for reviewing and managing the government and its agencies’ current and future debt and liabilities, including debt issuance by the federal government, statutory bodies and special purpose vehicles/entities. He said the government would take all necessary actions to recover funds lost and stolen from 1MDB.
On Oct 30, the government had applied to the Courts of England for an order to set a Consent Award between International Petroleum Company (IPIC) with Aabar Investments PJS, and 1MDB with the Minister of Finance Inc.
“Malaysia is using fraud as a reason not to pay the balance of the US$4.32 billion to IPIC or Aabar under the Consent Award, and to recover the US$1.46 billion already paid,” Lim said.
A sum of RM286.8 million is allocated for the Malaysian Anti-Corruption Commission (MACC) operating expenses next year, with the staffing to be increased by 100 personnel to ensure that the agency has all the necessary resources and manpower to combat corruption in both the private and public sectors, and follow the money trail to recover stolen funds.
An interesting quote by the Finance Minister is that “the business of the government is not to be in business.”
“Clearly, government-owned companies have been competing directly with private companies in non-strategic sectors. The outcome was the apparent ‘crowding out’ of private sector investments where private companies are unable to grow and compete,” he said.
For an entrepreneurial economy to succeed, the private sector must lead, while the government would focus its expenditure and investments only in strategic sectors and areas where the markets were unable to meet the needs of the people, he added.
Lim said the government had decided to proceed with several infrastructure projects, such as the LRT3 and MRT2 projects, which would be able to deliver high economic multiplier effects after carrying out renegotiations with the respective vendors to reduce the overall cost of the projects.
“As long as we are clean, people-centric and focused on carrying out institutional reforms, we can restore Malaysia back to fiscal health in three years,” he said.
“Let our love for our country unite us…Malaysians are special that despite our differences, whether by race, religion or background, we continue to work with and believe in each other.
“Malaysia is clean and we are proud that Malaysia is clean again. For those who have strayed, return back to the righteous path,” he said ending his maiden budget speech of two hours and 10 minutes. -Bernama
