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Election Watch

Key Expectations of 2009 Budget

Key Expectations of 2009 Budget

The Centre for Public Policy Studies recommends that greater and more urgent reform measures are needed, than those to be announced in the Budget 2009 by Prime Minister Abdullah Ahmad Badawi. There is no better place to start with reform than the public purse; the Malaysian people have a right to a budget that prioritises the interests of the impoverished many over the wealthy few, and serves the taxpayers rather than the rent-seekers.

A People-Oriented Budget

A people-oriented budget that puts consumers first is necessary. The Government has decided to lower corporate tax and personal tax, which is commendable. However, a more progressive taxation system to primarily assist the low-income group earners should be announced, especially reduction of sales and consumption taxes.

Nevertheless, further measures are necessary in light of rising food prices and the increased burden this places on low-income groups. The government should reduce restrictions and duties on imports, as well as burdensome regulations pertaining to licensing, permits and quotas. Cutting the proliferation of red tape here will only serve consumers by lowering prices and raising supplies, especially of essential goods such as food and other basic consumer products.

Stimulating Investment

The government should recognise the need to further stimulate private investment. The Foreign Investment Committee guidelines for equity ownership should be loosened to encourage domestic and foreign investment, which will give our economy a much needed boost, stimulating production. All equity restrictions for approved investments are carriers to investment and do not materially assist Bumiputera growth.

Strengthening Institutions

In the public sector, institutional reforms are key. The delivery system of the government has to be shaken up and improved if we are to compete with first world countries. The government must ensure value for people’s tax money and reduce wasteful government spending, which has only grown courtesy of corruption fueled by opaque government policies and practices. The quality of public services must be improved, even if at the expense of some less urgent development “megaprojects”. Greater funds should be allocated to the Judiciary, which presently fails to adapt to private sector needs for commercial dispute resolution. Such funds would build capacity and ensure independence and autonomy from the executive, thereby guaranteeing further checks and balances in our system of governance.

Equal Opportunity

The government must deliver its present package of reforms in a fair and just manner, without regard to ethnic, cultural or religious background. No community should be penalised for the sake of another; public funds and public institutions serve the Malaysian public, and not the public of any one community. In line with the Prime Minister’s commitment to equality of opportunity for all Malaysians, these reforms must be pursued for the sake of giving all Malaysians, regardless of origin, sex or beliefs, the same opportunities to succeed and be all they can be.

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