It is good that Prime Minister Najib Abdul Razak is re-calibrating the 2016 Budget in view of the changing and challenging local and international situation especially the plummeting oil revenues and the low prices for various commodities like palm oil and rubber, which contribute much for the national economy.
The economic slowdown in China, Europe and elsewhere also means less demand for our manufactured products. As such the government could consider the following suggestions, inputs and feedback to ease the hardship of the people.
- One of the shortcomings in the original budget was that the government took the lion’s share of development expenditure. When revenues are low, it will be prudent for the government to pass the burden to the private sector. All that is needed is for the private sector to be given some incentives, leeway, flexibility and opportunities for the private sector to invest in a wide array of industries and projects. This is proven good old Keynesian economics.
- There needs to be a partial moratorium on remittance by foreign workers who send billions of dollars to their homelands. A large number of foreign workers are employed in non-essential sectors and engaging in business and other activities. All these are hurting Malaysians. New recruitments should be stopped.
- One of the hallmarks of Prime Minister Najib’s administration has been the annual Bantuan Rakyat 1Malaysia (BR1M) payments. None before had done this despite booming economic times and Malaysians are generally thankful for this. The BR1M hand-outs should be increased to RM1,500-RM2,000 to cope with the increased cost of living. The billions paid through BR1M help re-generate the domestic economy through increased consumption. BR1M energises the domestic economy through its spill-over and multiplier effects.
- There is a need for more supermarkets, big and small and fair price shops to be opened in places with large populations to ensure more competition to bring down prices. A lot of retailers are giving flimsy reasons for price hikes and are openly frustrating government attempts to lower prices. With the Goods and Services Tax (GST) in place, the government is able to gauge the price levels at various stages of production as well as wholesale and retail prices, and therefore it has to come down hard on those profiteering excessively. Food courts, hawker centres, school canteens etc. are subsidised by the local authorities or government and should keep prices low. It does not make sense for these eateries to charge prices equal or more than the mamak shops that pay monthly rental and overhead costs amounting to thousands of ringgit.
- A big chunk of the budget now goes to pay salaries, bonuses and subsidised housing loans for the 1.6 million government employees and 1 million pensioners. The huge amount can only be justified only if there is increased productivity, efficiency, commitment, hard work , zero corruption and wastage.
- There is a need to check private tertiary education fees as it is bankrupting parents. A student now pays for a diploma what he would have paid for a degree previously. The easy availability of National Higher Education Fund Corporation (PTPTN) loans has led to a big hike in fees. There should be two categories of fees - a lower one for locals and a higher one for foreign students in view of the ringgit’s depreciation.
- More consumer items need to be GST-exempted. In the last eight month since the GST was imposed the government would have collected relevant data which can be used to increase the number of GST-exempted products especially those frequently purchased by the lower income groups.
- Shorter and flexible working hours could enable a large amount of people to take up jobs presently done by foreigners. Retirees, women and students, single parents can benefit from this system.