Malay Mail: Analysts laud Budget 2024’s direction towards fiscal reforms but warn Opposition may nitpick for own agenda
KUALA LUMPUR, Oct 17 — Analysts praised Prime Minister Datuk Seri Anwar Ibrahim’s second tabling of Budget 2024 on October 13, as the budget reflects the government’s clear direction towards fiscal reforms, but pointed out that the Opposition might raise some concerns.
Speaking to Malay Mail, Sunway University political scientist Wong Chin Huat said that the budget reflects a sense of direction and purpose, underlining the absence of an immediate election or any significant threat of a change in government.
“The Budget 2024 shows a clear direction of what the government wants to achieve. With no immediate election or threat of government change in sight, the government is incrementally pushing through fiscal reforms,” he said.
Wong said that the reduction of the budget deficit as a percentage of gross domestic product (GDP) is a key highlight, signifying the government’s seriousness about economic management.
The Finance Ministry said that Putrajaya is aiming to reach a 3.5 per cent deficit to GDP ratio by 2025. The ratio is estimated to be at 5 per cent this year, and projected to be 4.5 per cent next year.
“This move is expected to boost market confidence, given that the ruling coalition has a stable majority in parliament, with the Opposition holding only one-third of the seats.
“As a result, the budget is likely to be passed without substantial alterations,” he said.
Wong added that the Opposition’s limited influence, with no recognised shadow Cabinet and meagre resources for formulating alternative proposals, makes it unlikely that they can significantly impact the budget’s passage.
“Instead, they may resort to nitpicking without offering substantial alternatives,” he said.
Wong noted that the government has taken steps to avoid causing undue hardships to its support base.
“For example, the subsidy targeting measures only apply to diesel and exclude RON95 fuel. Additionally, the increase in the Sales and Service Tax from 6 per cent to 8 per cent exempts regular food and beverage items and telecommunications.
“These adjustments aim to shield the B40 and M40 income groups while signalling the government’s intent to bring about change. So, this should impress the rational economic voters,” he said.
However, Wong said that the budget’s ability to satisfy the wider segment of society may depend on factors beyond the government’s control, such as inflation and food security, which could be influenced by international events, including the war in Gaza.
He also emphasised that the budget is designed to maintain coalition stability, avoiding any element that may rock the boat within the coalition government.
Sunway University political scientist Wong Chin Huat said that the budget reflects a sense of direction and purpose, underlining the absence of an immediate election or any significant threat of a change in government. — Picture by Miera Zulyana
“Pakatan Harapan and Barisan Nasional’s base would be pleased as long as the economy is well-managed. The generosity for Sabah and Sarawak should endear Anwar’s government to East Malaysians and remove excuses for East Malaysian parties to back any attempt to change the government,” he added.
However, Syaza Shukri, assistant professor of political science at International Islamic University Malaysia said, “I don’t think the budget is enough to make the people forget about the controversies,” indicating that Malaysians tend to have short-term political memory.
She anticipated that the Opposition might still raise concerns despite the positive aspects of the budget.
“I can see that this budget under the Madani framework has a better potential to attract investments because of the commitment shown to greater fiscal responsibility.
“But I can see that the Opposition would claim that it didn’t go far enough to address cost of living issues, which is a fair criticism,” she said.
Syaza noted that the budget may not be viewed as a political or populist move in terms of converting voters, but noted that the RM2000 bonus for civil servants could help garner their support, as some remain hesitant to support the government during the state elections.
Anwar, in his Budget 2024 speech, said that the government is offering an interim payment of RM2,000 to all government servants ranked at least Grade 56, including contract workers.
On top of that, an extra RM1,000 will be given to those holding top positions in the public sector, including police, fire and rescue personnel, Armed Forces, and all uniformed personnel.
Political analyst Datuk Ismail Sualman lauded the budget’s potential to stabilise the country’s economy, thus fostering political stability.
Ismail emphasised its focus on the B40 demographic, cost of living and civil servants as critical factors contributing to economic momentum.
“It’s a budget to keep the economic momentum going and catapult us to a higher level.
“It also will help to grow our GDP by four to five per cent. This to me is a signal for the betterment of our national stability,” he said.
While Ismail acknowledged that Opposition parties might pick specific topics for their agendas, he expected their impact to be limited.
“Past experiences suggest that the budget is likely to be passed with only a few tweaks, and the opposition’s views may not significantly influence the outcome,” he said.
Almost eight months after Anwar tabled his first federal budget since coming into power, the second tabling of Budget 2024 on October 13 was the government’s biggest federal spending yet at RM393.8 billion to date.
The Budget 2024’s amount is over RM7.66 billion than the one tabled last February according to the Ministry of Finance’s Fiscal Outlook and Federal Government Revenue Estimates 2024 report.
