PETALING JAYA: With the government’s emphasis on plugging leakages, economists say good governance must be enhanced to ensure the implementation of Budget 2023 is free from corruption and wastage.
Budget 2023, the largest in Malaysian history with an allocation of RM388.1bil, comes with Prime Minister Datuk Seri Anwar Ibrahim’s repeated commitments to curb leakage, but economists say it all lies in the execution.
Socio-Economic Research Centre (SERC) executive director Lee Heng Guie said the government must ensure its implementation mechanism is effective to avoid the recurrence of leakages and wastage.
“The government is hoping to plug leakages to save billions, but it’s all about execution to ensure it doesn’t happen again. For this, there must be a good mechanism,” he said when contacted yesterday.
When presenting Budget 2023, Anwar revealed that the government lost almost RM10bil in diesel subsidies due to leakages in implementation and abuse of the subsidy mechanism.
There were also others amounting to RM3bil in wastage, loss of public funds, and inefficient payments as revealed by the Auditor-General’s Reports in 2020 and 2021, while another RM72mil was also lost due to weaknesses in collecting vehicle import duties, said Anwar.
Lee said a true hallmark of the government’s success would be when the Auditor-General’s annual reports gave good ratings for public sector entities.
He also said that despite the government shying away from reintroducing the Goods and Services Tax (GST), it could still find alternative sources to fill its coffers, such as from Petronas payouts and raising income tax for T20 earners, which was announced under Budget 2023.
This could then be channelled to help other Malaysians struggling with the high cost of living amid soaring inflation by giving handouts to those most in need, and tax for middle-income earners could be cut.
“Budget 2023 is not that different from previous years; there’s still a lot of giving out aid to groups most affected by the high cost of living, the soaring inflation and low income bands.
“There’s a shared prosperity concept at hand, whereby the rich are taxed and it’s chanelled to help those who need it whether through cash, grants or subsidies.
“But the government has to be clear about the mechanism. It must have a good database to ensure that only the eligible ones will be given,” said Lee.
Malaysia University of Science and Technology (MUST) economics professor Geoffrey Williams expressed his concerns over the long list of interventions under Budget 2023.
“I fear the very long list of initiatives will open up more opportunities for leakage and wastage.
“Instead of simple cash transfers to targeted recipients there is a continuation of providing money to specific groups with no obvious or transparent mechanisms to do this,” he said, adding that there were also very little of the promised alternatives to EPF withdrawals and how to rebuild pensions.
Prof Williams added that the focus on direct cash assistance to those with household income below RM2,500, however, looked like the beginning of a Universal Basic Income or Assistive Basic Income scheme and was a good initiative.
“But the food vouchers for this group should be provided in cash to allow them greater choice in how to spend it,” he said, adding that the rest of the welfare and subsidies programme was not changed.
