Economic Outlook 2020: RM297bil for operating, devt expenditure

The government will remain focused on education and hospitals.

KUALA LUMPUR: The Federal Government will allocate RM297bil or 18.4% of GDP under the proposed Budget 2020 for operating and development expenditure where emoluments account for a sizeable amount and continued focus on economic development.

It said of the RM297bil, it allocated RM241bil or 81.1% is for operating expenditure and the remaining RM56bil for development expenditure.

Operating expenditure is up by 7% to RM241bil from RM225.30bil in 2019 after excluding one-off tax refund allocation of RM37bil.

Operating expenditure

Emoluments largest component of operating expenditure and it is estimated to grow to RM82.6bil, mainly due to salary increments.

Allocation is for paying wages and salaries, allowances and other remuneration for Federal Government’s civil servants of about 1.4 million, of which 67.5% is for the Education Ministry and Health Ministry, mainly for teacher, doctors and nurses.

Retirement charges to increase by 1.9% to RM27.10bil. About 75% of the retirement charges comprise monthly pension payments for about 874,000 pensioners and beneficiaries.

Supplies and services, the second largest component of the operating expenditure, is expected to increase by 27.7% to RM38.5bil.

Subsidies and social assistance estimated to be RM24.20bil mainly for BSH and welfare assistance, fuel and agriculture-related subsidies; toll compensation and education-related assistance.

The government will provide BSH assistance of RM5bil in 2020.

Debt service charges on Federal Government debt to be RM34.90bil of which 97.7% is for paying of coupons on domestic debts, especially Malaysian Government Securiti4s and Malaysian Government Investment Issues.

Development expenditure

The expenditure will focus on economic development, bridging urban-rural infrastructure gap and uplifting living standards.

A total of RM56bil will be allocated of which RM53.50bil is direct allocation to speed up projects and programmes to strengthen the long-term capacity of the economy.

Of the 2020 allocation, RM53.20bil is for 4,744 on-going projects and RM2.8bil for 722 new projects.

The economic sector will receive 55.4% of the development expenditure followed by social 26.9%, security 11.7% and general administration 6%.

The transport sector will receive 21.8% of the development expenditure or RM12.20bil for the public transportation such as the MRT2, KVDT and Pan Borneo Highway, expansion of airports in Sandakan and Kota Bahru, maintenance and upgrading of roads, bridges, ports and railways.