The Budget 2022 tabled mainly focuses on the recovery of the economy post-pandemic, building the country’s resilience to prepare for an uncertain future and undertaking reforms to achieve long term economic growth and employment.
The people and business-centric Budget shows an increase in spending by a hefty amount to RM332.1bn, the highest compared to all the previous budgets, with a 24% increase in development expenditure and 76% in operating expenditure.
“Despite the expansion of the country’s fiscal position to 6.5%, it would be good to gain clarity on how the government plans to generate further revenues to cover its fiscal deficit other than through dividends from the state energy firm Petronas and excise duty on sugar and nicotine products,” says Dr Nur Ain Shahrier, Senior Lecturer at Sunway University.
Economic growth that generates revenue should not only come from the short-term demand side such as stimulus packages but more importantly, address the long-term structural problems emanating from the supply-side including human capital development, education, infrastructure development, connectivity, technologies and productivity.
Debt sustainability can only be achieved when our economic growth is sustained and exceeds the government’s fiscal borrowing, she says.
Upskilling initiatives especially through technological and digital platforms to create further employment in the country will help boost labour demand for skilled workers.
However, the economist feels it is equally important for the government to also address the problems of semi-skilled and low-skilled workers who are vulnerable to retrenchment as technologies and artificial intelligence take over including informal economy workers that have been severely affected due to MCO as staying home means losing their jobs and livelihoods.
