PETALING JAYA: The public must be realistic in its expectations for the upcoming Budget 2024, as there is only so much that the government can do, economists say.
Professor Emeritus Dr Barjoyai Bardai said this is due to the lack of revenue to provide extra allocations and subsidies for the public.
“As we know, the government’s present focus is on eliminating hardcore poverty, and this will roughly involve around 150,000 people, although I estimate there are about 500,000 hardcore poor in the country.
“So, if the government helps to increase their salaries to RM2,208 per person, that is about RM25,000 for one person a year, and if we multiply that by 150,000 people, we are looking at about RM3.75bil.
“The approved budget for this initiative is RM1.5bil as previously announced, so this (RM3.75bil estimation) will already explode the government’s budget on subsidies,” he said when contacted yesterday.
Prof Barjoyai believes that Putrajaya will likely assist the public, particularly those in the B40 and M40 groups, through its progressive pay initiative, as the government has set a target of 45% of total income for the percentage of labour share of income.
“Employers can’t afford to increase salaries on their own because they make profits based on increases in productivity, which means the government will have to subsidise the employers; otherwise, they will suffer more losses.”
At the same time, the former senior lecturer from Universiti Kebangsaan Malaysia expects the federal administration to further lower the prices of essential items such as rice, sugar and cooking oil.
“Which means more cash injections are not likely to happen. The government is now struggling to balance the budget, especially since it aims to reduce the fiscal deficit to 3%,” he added.
Despite the constraints faced by the government, Malaysia Literacy in Financial Education Association founding chairman Amy Seok said there are several areas that Putrajaya should focus on to alleviate the burden of the public, especially the M40, which has widely been dubbed the “suffering middle child”.
Seok said education and skill development among workers are crucial for the upward mobility of individuals in the M40 group.
She said more funding should be allocated towards scholarships, vocational training and skill development programmes to improve career prospects and equip the M40 group with the necessary skills for economic growth.
Given that affordable housing is one of the major concerns of the lower income brackets, especially those in urban areas where property prices can be high, there should be budget allocation for affordable housing initiatives.
“This can be done by subsidising housing loans or providing rental assistance,” she said.
“It’s important to note that budget allocations are subjective and can vary depending on the government’s priorities and economic circumstances.
“The government may have different perspectives on resource distribution and may address these issues in different ways through its budgets.”
