PETALING JAYA: The Madani framework embarked by the government will enable the country to become more resilient, competitive and agile in a few years to come, with a strong fiscal position that would enable the government to have the financial muscle to devise development programmes more effectively, economists say.
Under the framework mooted by Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim, the government will focus on the problem-solving process and values to build good morals in building a better society through six pillars, namely, sustainability, prosperity, innovation, respect, trust and compassion.
In line with this focus, Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid believes that transparency and fairness in government dealings would create trust and confidence in the rakyat.
“The Madani concept has set the stage for economic reforms. Since it was launched, there have been several policy announcements such as the National Energy Transition Roadmap (NETR), the New Industrial Master Plan (NIMP) 2030, the Mid-Term Review of the 12th Malaysia Plan (MTR 12MP) and Budget 2024.
”The government launched the Central Database Hub (Padu) in early January 2024, while the Public Finance and Fiscal Responsibility Act has also been approved by Parliament in October last year,” he told Bernama.
In that sense, he said that the present administration has demonstrated its commitment to ensure that the economy would be more competitive and financially disciplined.
“I suppose it is now about execution and (we will) be able to see the desirable outcome,” he pointed out.
Anwar introduced the concept of Malaysia Madani on Jan 19, 2023.
It is an initiative that is inclusive of all groups and races, in an effort to restore the country’s dignity and glory on the world stage as well as aiming to propel the nation towards development and prosperity.
Touching on the NETR, Mohd Afzanizam said the roadmap essentially talks about energy transition which would certainly open up new opportunities for businesses to thrive as the country transforms towards a greener economy.
“Along the way, there will be a need for capacity building such as the availability of a highly skilled workforce and employing advanced technology in the production processes.
“All these would require massive investments, in which foreign investors will assess Malaysia accordingly and would put their money after completing their due diligence,” he said.
He noted that these documents would serve as important information for investors to form their opinion before committing their investments.
More importantly, he said the government needs to strategically communicate all the initiatives to the rakyat and should mobilise its machinery, at the federal or state level.
“It also needs to showcase its progress report.
“Let’s say every quarterly. That way, we can see the outcome,” he said.
Echoing similar thoughts, Malaysia University of Science and Technology economics professor Geoffrey Williams said civil servants need to be retrained from their old-fashioned way of thinking into an efficient and smarter way of mobilising the Madani concept, making it a success for the whole nation.
He said that the Madani framework would be significant in changing the way people think, but it must be embedded into policy designs and practices that required changes and speed in implementation.
“Nevertheless, we have started to see a change in approach to the economy under the Madani framework with better fiscal management, a stronger focus on cutting wastage, leakages and corruption, and an emphasis on structural reforms,” he noted.
On taxes, Williams believes that Malaysia needs a fresh new look at taxes and a plan to reform taxes during the rest of the parliamentary sittings in search of fiscal headroom.
“Reducing taxes is always better than increasing taxes.
“However, the government has inherited a very inefficient tax system built up over time with ad hoc taxes based on old-style thinking,” he said.
On Jan 16, Finance Minister II Datuk Seri Amir Hamzah Azizan said the government had agreed to exempt the imposition of the capital gains tax (CGT), as well as taxes on foreign sourced income (FSI) on unit trusts, with the exemption on CGT effective from Jan 1, 2024 until Dec 31, 2028 while the exemption on FSI is effective from Jan 1, 2024 until Dec 31, 2026.
“Given that more than 90% of unit trust holders are individuals, the government will continue to make capital market investments in Malaysia rakyat-friendly,” he said.
