January 28, 2016
By Tan Sri Ramon Navaratnam
The Budget 2016 recalibrations or revisions announced by Prime Minister and Finance Minister Najib Abdul Razak today were welcome but quite ordinary.
They could have been more dynamic and innovative.
They were necessary but not sufficient to reduce the ongoing ‘trust deficit’ and to boost confidence in arresting the slide in the ringgit and the economy.
Many Malaysians expected the prime minister to seize the opportunity, and to take the bull by the horns.
It was hoped that he would have introduced structural changes to help us all; and the economy as well, to fight itself out of this significant economic slowdown. It’s not yet a recession but it can become so.
The 11 measures introduced are useful, but we need to address the following issues -
1. What is the full impact of the revised Budget on the budget deficit as a proportion to the GDP.
2. Some assurance is needed that the New Economic Model policies would be followed through.
Then confidence inspiring would have been more forthcoming and reassuring.
3. While we need to ensure fair pricing, let’s not ignore the need to step up measures to cut off more approved permits (APs), introduce more policies to step up productivity and production and to reduce protectionism.
4. We could be innovative and introduce for example, ‘1Malaysia Joint Companies’, and give them small tax and other Incentives, to promote racial cooperation in trade and investment, at home and abroad, especially to the small and medium enterprises (SMEs), to stimulate the economy and growth.
5. The tax reliefs and Employees Provident Fund (EPF) reductions and My Beras, will definitely benefit the poor - but what specific policies have been put in place to reduce inflation, that is the major problem they face, please?
6. Strategically, a little pump-priming would have been in order, under these dire circumstance, and the international rating agencies would understand our need to do so, as a complex multiracial society.
Nevertheless I wish the revised Budget will do well. Perhaps we may need another Budget revision soon?
View original article on Malaysiakini.
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