Spread out projects under budget revision
A revision of Budget 2016 should also include spreading out projects under the development expenditure with high import content, says Centre for Public Policy Studies chairman, Tan Sri Ramon Navaratnam.
He said the alternative would be to have deep cuts in the operating expenditure, which would mean cutting jobs in the civil service. Ramon, also a former senior civil servant, said such job cuts would be a difficult move to make.
“So the only thing is capital development budget. It stands at about RM50bil a year, which I believe we can cut,” he said on the sidelines of the Asean Microfinance Conference yesterday.
Navaratnam said the budget recablibration “is a good idea” and timely with the change of oil price and the slowdown in China.
“The global economy is different than what it was in October last year, which is why it’s good to revise the budget,” he said.
Navaratnam also urged the Government to delay projects with high import content due to the weak ringgit.
“The more foreign exchange you spend, the more you are weakening our currency.
“When you have a smaller development budget, you will have smaller deficit and that is more manageable,” he said.
Navaratnam pointed out that the Government’s commitment to manage the budget and the deficit would give more confidence to foreign investors and rating agencies.
“We must show courage and resilience and that we are in charge and in control of the situation,” he said.
Besides a revision of the budget, the economic growth forecast may also be revised lower.
On another note, Navaratnam suggested the revised budget preserve or increase the allocation for microfinancing.
“We have to observe our aims, which is to look after the poor. The bottom 40% must be protected and they should not suffer.
“Cut in other areas but don’t do anything that affect the poor,” he said.
Article published in The Star.