Source: The Malaysian Insider
Date: 17 October 2013
Budget 2014: What must be included! - Ramon Navaratnam
The Budget 2014 will be tabled in Parliament next week on October 25. It must be seen by the public to be fair, equitable, reasonable and inclusive, with special preference given to the poor and lower income groups.
The following are the essential points that must include to win broad support for its new policies and programmes:
1. The Budget has to be prepared as a one year plan in the overall perspective plan for the Vision 2020 plan. It has to be seen as part of the strategic plan to fulfil our long-term national socio-economic goals.
2. The Budget should not be viewed or presented, as a red packet or angpow, to get as much more handouts in tax exemptions and expenditure gifts, regardless of the dire implications on the economy.
3. The Fitch Ratings report's criticism of our economic weaknesses are REAL and cannot be placed under the carpet of callousness or played down in the Budget! The large budget deficits, rising public debt and balance of payments declines, must be addressed properly, to avoid a down grading in our international credit ratings, which can be destabilising to the economy.
4. Inflation should be curtailed by introducing incentive taxes for increasing competition, production and productivity. More liberal policies of licensing, quotas and restrictions should be made available to increase supplies of goods and services. The Budget has to provide more allocations to combat corruption and crime that can raise prices of goods and services for all.
5. The GST should not be postponed again! The essential goods and services that are consumed by the POOR should be exempted from the GST. Corporate taxes should remain the same as any reduction will negate the new revenues from the GST!
6. The huge wastage of public funds mentioned in the outstanding AG's Report have to be drastically reduced and the Budget has to highlight the measures that will be taken to fight wastage.
7. The Budget should state categorically what steps and how many officers are being penalised for wasting our taxes, otherwise the public will rightly ask, "Why should we pay our taxes?"
8. Bonuses to civil servants have to be carefully given according to productivity and not given across the board, to even malingerers. Bonuses must be earned and not given freely.
9. The Budget must show the outcome/performance from all this massive annual expenditure! In other words, higher allocations of expenditure should not be the criteria for successful budgeting, but the quality of the products and services provided to the rakyat (people). The question the public keeps asking is, "Are we getting our money's worth? Is the quality of education, health, safety and security, transport, and food production and environment, etc., improving or regressing?"
10. The Budget must be FAIR to ALL Malaysians and NOT be seen as favouring any vested or racial group. There should not be race based economic or "raceconomics," which most Malaysians and investors would resent. The Bumi empowerment policy should be transformed into the Innovation and Entrepreneurial Policy / Programme (IEPP) for ALL deserving Malaysians, with some preference given to genuinely, really needy Bumis!
I believe that the Budget 2014 has to include the above basic essentials for it to be regarded generally as a good budget for 2014.
*Tan Sri Ramon Navaratnam is a Malaysian economist and the chairperson of the ASLI's Centre for Public Policy Studies (CPPS).
*This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insider.
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