ON Friday, the new Budget will be announced. It will be keenly watched given the ongoing narrative about the country’s financial health.
For one, the issue is whether the Budget will be the largest yet, or close to it, on record.
The original Budget 2023 – tabled before the general election was called last year, thus requiring a re-tabling – was the largest spending Bill proposed by any administration. The impending election surely figured into announcing a RM372.3bil budget despite the fact that Malaysia’s indebtedness is high.
The previous administration knew that 15 sen from every ringgit was going to just service interest.
It also alluded to the high debt levels prior but nonetheless proceeded to announce the mammoth spending package.
One can say that after two decades of deficit budgets, it is not surprising that federal finances are not in the pink of health. We let it get to this stage, and it is now time to correct the imbalances.
Going by what has been said and alluded to so far, it is clear that subsidies need to continue. But in what form?
Malaysians know that all the price controls and cheap petrol come at a cost.
Paying to keep prices in check means forgoing long-term investments that could be made – for example, improving the strained healthcare system or enhancing the quality of education or instituting social safety nets in a more structured manner or even strengthening our national defence capabilities.
We simply cannot go on with business as usual.
We understand that the government needs to ensure the economy is stabilised in a year in which economic weakness is expected.
But regurgitating the same old formula needs to change.
Maybe the government is laying the groundwork for the bitter medicine we as a nation need to take to correct the current ailments in the economy.
Maybe it is preparing Malaysians for the surprising, but correct, decision of cutting down the deficit by ensuring that the Federal Government’s total debt does not expand irrationally beyond where it is now.
Having fiscal discipline is now being forced upon us.
Everyone knows that having too much debt is not a good position to be in.
When an individual owes too much money, there are options to restructure their debt.
Even with such recourse available, it will still entail some pain. It is no different for a government.
We don’t have to flirt with bankruptcy before taking action.
That is the responsible thing to do instead of delaying the corrective measures or making it the next guy’s problem.
