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Budget 2020: Stepping stone to a brighter future

KUALA LUMPUR - Oct 12: THE measures in Budget 2020 are seen as a stepping stone towards fulfilling the country’s 10-year mission towards shared prosperity by 2030.

Creating more jobs, raising income levels, reducing the gaps between the regions and narrowing inequality between groups of people were echoed in the measures proposed in Budget 2020 yesterday.

In seeking to grow the economy by 4.9% in 2020 from 4.8% this year, the government has loosened its earlier fiscal tightening stance by having a fiscal deficit of 3.2% for next year.

Rating agency RAM Holdings Bhd said the stance by the government was appropriate given the backdrop of uncertain global growth conditions.


“While the stance would likely cause a mild deviation from the government’s original fiscal consolidation path, it will not immediately weigh on Malaysia’s respective global and Asean-scale ratings, ” it said.

The extra spending this time was not scattered throughout the economy but had purpose.

In an effort to make Malaysia the preferred destination for investors, the government committed vast amounts of money to foreign and local companies.

This will not only bring in the cutting-edge technologies and industries that Malaysia wants to attract, but also create highly paid jobs that will benefit the country in the future.

The trade war between the United States and China has ravaged global economic and trade growth, and the challenge for the government is clear.

As China is our largest trading partner, the government is taking this opportunity for Malaysia to become the “Destination of Choice” for high value-added FDI.

Therefore, a “Special Channel” to attract investment from China will be established under InvestKL, an agency under the Ministry of International Trade and Industry.

“This ‘Special Channel’ will attract and fast-track high-value, high-tech and high-impact investments in both the manufacturing and services sectors to synergise with the government’s priority and drive Malaysia’s economy up the value chain, ” said InvestKL acting CEO Muhammad Azmi Zulkifli.

Incentives for the large electrical and electronics sector will also lead to more job opportunities while strengthening Malaysia’s largest export sector.

In seeking more investments, the government is looking to create more high-paying jobs.

But it is also mindful of the cost pressures on people in the country’s urban centres and will raise the minimum wage to RM1,200 from next year for those areas.

The petrol subsidy will also be extended to the middle-class who own eligible vehicles, where there will be a limited but welcome reprieve to the unsubsidised petrol prices from next year.

In a unique way of getting more jobs for Malaysians, it is also looking to see companies hire more Malaysians and women, and will offer companies cash for hiring Malaysians and for those employees, it will supplement their pay packets with additional cash.

Generating more jobs in rural or semi-urban areas also seems to be a way of narrowing the urban-rural divide.

There are proposals to boost a logistics hub at the border with Thailand and RM1.1bil to support projects for corridor development activities in areas such as Perlis, Kuantan and Sabah.

The government is spending a lot of money to improve infrastructure at rural areas, especially in Sabah and Sarawak, in line with its plans to bridge the development gap.

Sabah and Sarawak will also receive the largest portion of development expenditures amounting to RM5.2bil and RM4.4bil respectively to narrow the urban-rural divide.

Rural development received a total allocation of RM10.9bil.

Skills training through Technical & Vocational Education & Training (TVET) also saw a boost from RM5.7bil to RM5.9bil, which is essential in lifting Malaysian employment as TVET graduates have one of the lowest unemployment rates among graduates in the country.

There was also a focus on creating a united, inclusive and equitable society with a slew of measures being proposed to lift the B40 and M40 in the country.

“In moving towards a more sustainable social agenda, policies for the B40 segment are predicated on a good balance between direct assistance and enablement, which is crucial to ensure that as many of them as possible are able to help and advance themselves economically, ” said CIMB Group Holdings Bhd CEO Tengku Zafrul Aziz.

There were a host of other budget measures such as addressing the lingering and large overhang of properties in the country by making it easier for Malaysians and foreigners to buy unsold real estate.

Transportation in the country also received a fillip with the government aiming to spend more on last-mile connectivity and also on getting more electric buses on the road.

The move towards a greener and sustainable Malaysia with efforts on conservation of endangered wildlife was roundly cheered.

Those proposals, along with the consistent allocation towards education, religion, and strengthening institutions, will see Malaysia embark, in a more focused way, on the journey towards the Shared Prosperity Vision and its objectives.
Source: The Star