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Despite facing fiscal challenges, the country’s financial sector remains healthy and monetary sector is stable, said Finance Minister Lim Guan Eng during his Budget 2019 speech today.
“Sustainable economic growth must be maintained to improve economic well-being, and the higher revenues generated will also help to address our public finances,” he added.
Lim, while winding down his speech, believes that the historic moment on 9 May 2018 will only matter if the government’s fiscal health can be restored and the people are better off economically in the form of higher wages, better jobs and more money to spend.
“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. Let our love for our country unite us, our challenges make us stronger and our confidence awaken Malaysia as an Asian Tiger all over again.”
Earlier on, Lim announced that the theme for the 2019 Budget is “A Resurgent Malaysia, A Dynamic Economy, A Prosperous Society” that will have three focus areas with 12 key strategies to map out a path to restore the Malaysian economy as an Asian Tiger.
The three focus areas are:
Lim said that the weakest link in Malaysia’s macroeconomic management is in the mismanagement of its public finances, exemplified by the RM50 billion 1MDB scandal and explicitly outlined in the book “Billion Dollar Whale”.
“We shall implement institutional reforms that promote transparent fiscal discipline which will not only prevent repeats of such malfeasance, but also ensure overall macroeconomic stability and the sustainability of our economic growth.
On that note, the Federal government is implementing a ‘zero-based budgeting’ exercise for this Budget.
Improved effectiveness, greater efficiency and higher cost-savings are achieved by firstly, ensuring spending is justified by objectives rather than the previous year's budget; secondly, review alternative scenarios to achieve the same objectives; and thirdly, all discretionary spending is planned from zero.
Putrajaya will also be tabling a Fiscal Responsibility Act by 2021 to avoid reckless mega spending that entails mega debts.
“In addition, we intend to table a new Government Procurement Act next year to govern procurement processes to ensure transparency and competition, while punishing abuse of power, negligence and corruption. Open tenders will not only achieve more value for money for the tax payers, it will also breed a more efficient and competitive private sector.”
“To ensure full disclosure of our debts and liabilities, as well as the value of our assets, the current cash basis of accounting shall be converted to an accrual basis by 2021,” he revealed.
