An economist, a representative of the disabled community, a curator and a small business association chief give their immediate reactions on the budget announced by Prime Minister Najib Abdul Razak today.
Below are their comments:
Abdul Ghafar Ismail, UKM economics professor and research fellow for Perdana Leadership Foundation and International Syariah Research Academy
Looking at the budget, I am quite concerned about the deficit as 5.6 percent is still quite high. Compared to EU countries for example, the standard is around 3.5 percent. The extra two or so percent is worrying.
A big deficit means that a large amount of funds form the money market will be taken up by the government, and this will reduce the amount of borrowing available for the private sector. The private sector may find it difficult to grow and conduct business.
On improving export by 3.5 percent, this will largely depend on the economic health of our trading partners like the US. We'll have to see about that.
With an operational expenditure of RM138.3 billion and a revenue of RM 148.4 billion, this is quite bad, as our revenue is only enough to cover our operational expenses. If this is the case we don't have any savings and are spending almost nothing for development. If it continues in the long term we will sink deeper into debt.
As for the GST, even if the government is considering implementing it, the problem is the hardware, software and procedures to implement it are not yet in place. Accounting practices of companies for example would have to change.
The government spending in improving our infrastructure such as roads, rails and ports is good and long awaited. It would certainly benefit our construction sector.
But the huge investment in infrastructure may be politically motivated. In economics it is recognised that sometimes politics dictate the type development.
If a general election is near, then there is a lot of short term incentives and benefits, which will endear the government to the populace. But if the a general election is in the long run, then the type of development will be like ports and roads that will only see completion in the long run. Then the government can claim later that they have done a lot of good for the people.
The incentives provided for the Halal industry is good but we may need to spend more to promote the halal industry and even expand it to include not only food products but non-food products as well.
With the government stepping back away from the economy, the challenge is now upon the private sector to make up the investments and the local market to generate consumption. The tax cuts and breaks will help generate consumption because this will increase disposable income.
The setting up of INTAN as a school of governance is good for the government to finally realise that good governance is key to our well being, economically. This will instil better management values and reduce leakages in governance.
The focus on SMEs and small traders through funds, loans and micro credit is a good move as small businesses make up 80 percent of our economy.
Incentives for the Islamic banking sector are a good thing for this will stimulate the service sector and contribute to our export of services.
Anthony Thanasayan, Petpositive president
The budget is better because at least there was some mention of the disabled. But even then it is still very disappointing because it appears to be another charity budget, instead of proving that the disabled are also part of the 1Malaysia plan.
We're glad that he has raised the allowance for disabled children from RM50 to RM150 because at least it is more a more noticeable and dignified budget. But why only disabled children, and not allowances to help all sections of the disabled?
And where did they get figures saying there are only 4,000 disabled children who need help? It is as if there has been no consultation from the disabled group at all, and if there was, someone certainly gave him the wrong info.
We are actually more interested in what will happen to the RM9 billion allocated to infrastructures. Would this include universal pavements that can be used by able and disabled friendly people? We really need to address this issue and realise that pedestrians have rights too... otherwise this RM9 billion will just go to waste. Not everyone drives.
On the matter of Internet, the budget gives tax breaks, but that will only help those who are well to do enough to pay taxes, not those who need help. We would have liked him to say that every disabled person who cannot leave the house due to the ill planned public transport and pavements can get free broadband Internet. At least if they have access to a computer they can be productive, and even gain employment.
Similarly, targeted subsidies for petrol should consider if the person is disabled or not, and not just be means tested, as petrol prices as well as toll prices is a big hindrance to the emerging group of young disabled who are trying to live independent and productive lives.
Further, we hope that the plans to build and refurbish schools would consider the provision of disabled toilets, which (Home Minister, and the then Education Minister) Hishamuddin (Hussein) had promised three years ago. I had to stop schooling at the age of 10 because of this and this is a cruel thing to do to a child.
We also urge that the Klinik Desa that was proposed to be wheelchair friendly, especially since it will be located in shop houses.
That means to provide lifts, and to make sure that the corridors are large enough for wheelchairs, which are used not just by the disabled, but also the sick and elderly.
If these provisions are not met, then I believe the budget will be a fake one that pretends to look out for the welfare of all.
Chua Tiam Wee , SMI Association of Malaysia president
SMI Association welcomes The Budget 2010 which is a caring budget towards achievement of 1-Malaysia concept, high income economy, further liberalization especially financial sector and further ease of doing business.
The SMI Association welcome the specific measures to assist SMEs especially ensuring adequate and easier assess to financing during the current economic downturn. The rationalization of SME Funds from 79 to 33 will allow underutilized SME funds to be merged with more popular funds and be utilized. Currently SME need working capital financing rather than financing in capital expenditure for expansion as there is still excess capacity in the current downturn in demand.
In view of this, we propose that the government to relook into the almost exhausted government guarantee fund to increase further , such as the SME Assistance Guarantee Scheme (SAGS) and Working Capital Guarantee Scheme.
The Co-ordination of these SME Funds by SME Corp will reduce the run around by SMEs to various agencies for funding. However, SME Corp being new in its responsibilities hopefully will be sufficiently staffed with competent personnel to cope up with the demand and avoid any bottlenecks.
We welcome the government setting a speedier timeline of six days approval and four days disbursement for microcredit financing which are much needed by micro enterprises in short of funds. We also hope similarly SME Corp which has been allocated with RM350 million funding will also set their own speedy disbursement timeline. On micro financing, government should also look into the current high interest rates imposed by the micro credit lenders.
We welcome the tax deduction for expenses by SME to register the patent and trademark as this will reduce their cost burden in protecting their intellectual property and encourage them to invest in R & D and development of new products for the worldwide market.
Simon Soon, art curator and founder of contemporary arts and culture website, ARTERI
If we look at Singapore, a lot of money has been pumped into making it the culture and arts centre of the region. And this has been mainly because they fell short in that area, when they applied to be considered to be a developed country. This made them realise the importance of culture vibrancy, and this I feel is what it happening here.
I feel (the allocation of RM200 million for a Creative Industries Fund and RM3 million for a welfare fund), shows that the government is understanding the significance of cultural capital to the development of a country. It's a welcomed first step and it shows that the government is acknowledging of culture and arts and culture as not just kuda kepang dancers or satay vendors at a tourism event.
However, perhaps it is not the best way for the funds to be managed by the Ministry of Information, Communications and Culture as there may be a question of accountability and transparency. Further, the civil service in Malaysia is unfortunately very closely tied up with driving political agendas, so there is a fear that the fund will be used to push propaganda type of works. There may be a bias against works that are critical of the government.
It is my understanding that the Balai Seni Negara has had its funds cut for next year, so it is interesting to see if the policy on the creative industry has any effect on this.
It would also be good to have further clarification on who is included in the "penggiat seni", because RM3 million can go a long way.
PET+BLOGSPOT is the official online blog of the Malaysian Animal-Assisted Therapy for the Disabled and Elderly Association (Petpositive).
Our blog which was first established in October 2007 currently has more than 30,000 hits. Kindly take note that views expressed in this blog are not necessarily those of Petpositive.
You may also visit our Webpage by browsing: www.petpositive.com.my