The higher spending ceiling of the 12th Malaysia Plan (12MP) due to an additional RM15 billion allocations will not come from more loans, but will come from expected better national growth in 2024-2025 and domestic savings, said Economy Minister Mohd Rafizi Ramli.
He said the government will implement cost savings by adopting better governance.
“The RM415 billion ceiling has been agreed after taking into account expectations that Malaysia will remain within the 3.5% deficit target by 2025.
“This means that we are confident we can spend more, with more allocations without having to borrow more,” he told a press conference after the 12MP’s Mid-Term Review (MTR) presentation session in Parliament on Monday.
The 12MP MTR was presented by Prime Minister Datuk Seri Anwar Ibrahim. He announced that the total spending ceiling of the 12MP will be increased by RM15 billion, thus bringing the total allocation to RM415 billion.
Rafizi said that although the RM15 billion is an additional amount, it is the result of savings from various existing national expenses that can be transferred to development expenses for the next two years.
He said when the 12MP was developed in 2020-2021, the allocation limit was set at RM400 billion, without taking into account many things that affect the people, such as repairing roads, schools and clinics for the poor.
“This was not the previous government’s emphasis, but now it is an important target for the [unity] government. Of course, this requires additional allocations,” he explained.
He said that the 12MP MTR is the first comprehensive policy presentation by the unity government.
Commenting on the national income, Rafizi said the government is focusing on the development and launch of the capital gains tax in 2024.
“Of course, the government will [keep] to that strategy (capital gains tax), [but we will] be open to whatever ways to achieve fiscal sustainability through a wider revenue base, whether it’s going to be the capital gains tax, goods and services tax, or any form of direct or indirect taxes.
“I prefer to keep that strategy open, and we will decide on a case-to-case or year-to-year basis,” he added.
The 12MP will be realigned with the vision of the Madani Economy, which aims to empower and boost the national economy for a period of 10 years.
At least RM90 billion will be spent annually from 2023 to 2025.
