Economic Report 2014-15: Greater, equitable wealth for rakyat


  • Economy
  • Friday, 10 Oct 2014


KUALA LUMPUR: Datuk Seri Najib Tun Razak, unveiling the RM271.94bil Federal Budget on Friday, emphasised the strategic initiatives will include the capital economy and the people’s economy.

He stressed the Government’s commitment to ensuring continued economic growth was inclusive and that the fruits of the development would be enjoyed by every segment of society.

In the preface to the report, the Prime Minister said the Government would not only continue to focus on spurring economic activities, but would intensify income distribution efforts to foster a greater sense of belonging.

“The government is concerned with the difficulties faced by the rakyat in coping with the rising cost of living. Hence, we will intensify efforts to ease the burden of the rakyat,” he said.

The Prime Minister assured that the measures would include cash assistance, ensuring food prices remain reasonable, building affordable houses, improving and expanding the public transportation system, as well as increasing access to public health.

“We are also focusing on empowering the rakyat to earn higher wages commensurate with increased productivity. This will be achieved through better education outcomes as well as continuous training and up-skilling,” he said.

Najib pointed out the 2015 Budget is crucial since it is the final budget under the 10th Malaysia Plan – with just six years more to its target to be a high-income and developed nation by 2020.

“In this respect, we must further intensify out efforts in the spirit of 1Malaysia to generate greater and equitable wealth for the rakyat,” he said.

Malaysia’s economy is expected to expand between 5% and 6% in 2015 as the economic growth momentum continues from 2014, with the private sector taking the lead, although there are concerns about the global economy.

STRATEGIC INITIATIVES

The Budget for 2015 will continue to address issues relating to strengthening the growth momentum, reinforcing fiscal governance, strengthening human capital and prospering the rakyat.

Pro-growth policies will continue to achieve better balance between the capital economy and the people’s economy. The capital economy will focus on attracting investments, implementing mega-projects, strengthening the financial sector and increasing income per capita.

As for the people’s economy, there will be continued emphasis on projects and programmes, which will benefit the rakyat, in particular the low-income and vulnerable groups such as implementing social infrastructure projects and enhancing the social safety net.

ECONOMIC MOMENTUM 

The Budget will focus on strengthening the economic momentum, reinforcing sustainable fiscal governance, strengthening human capital and prospering the rakyat.

To strengthen the economic momentum, the Government will have policies to ensure a favourable investment climate and at the same time push ahead with economic transformation and liberalisation measures.

The Government will foster a conducive environment to attract quality investment in services and knowledge-intensive industries to move up the value chain.

The services sector, which is the largest contributor to the economy, will be strengthened through the implementation of the Services Sector Blueprint.

“The Blueprint addresses several areas that can be further enhanced as well as those that currently impede growth of the sector,” it said, such as financing schemes for SMEs, research incentives and promoting the tourism industry.

The Halal logistics is another area of potential growth and Malaysia can be the region’s Halal logistics hub.

SUSTAINABLE FISCAL GOVERNANCE

Effective macroeconomic management and fiscal reforms are crucial to reduce the deficit and manage debts effectively.

The government will continue with its consolidation efforts by reviewing all aspects. These include revenue enhancement, ongoing subsidy rationalisation, prudent government spending, increasing efficiency of the public sector and managing off-budget spending.

To broaden the tax base and reduce dependence on oil revenue, the Goods and Services Tax will be implemented in April 2015.

HUMAN CAPITAL 

The Government will continue with its measures to strengthen human capital at all levels. This will range from better quality of teaching, improving the teachers’ proficiency in the English language.

The government will step up its effects to increase the intake and ensure an improvement in the students’ performance in science, technology and mathematics.

As the youth represent 45.9% of the population, there will be an emphasis on youth development. Under the Budget, there will be various programmes on youth development. Among them are youth city, housing, skills training and entrepreneurship development.

The Government will intensify its efforts to increase women’s participation in the labour forces including re-employment of women into the workforce and preparing professional women to assume higher-level decision-making positions in the private sector.

PROSPERING THE RAKYAT 

The Budget will continue to emphasise on the needs of the people’s economy whose concerns include the rising cost of living, quality of life, safety and securitiy as wekk as youth and OKU issues.

Due to the rising cost of living, the government will continue to provide assistance and incentives, especially the less fortunate and disabled, single mothers and the elderly. The Government will continue to ensure goods and services, including basic needs, are available at affordable costs.

The Government will continue to provide cash transfers such as BR1M, school and other welfare aid.

Due to the low commodity prices, which has particularly affected the smallholders’ livelihood, the Government will provide a price support mechanism.


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