PETALING JAYA: Coming out of the Covid-19 pandemic, when so much has been spent on keeping economic growth going, there were concerns over what the spending packages would be like under Budget 2023.
It turned out be a big budget, in keeping with a growing economy.
The government opened its spending taps ahead of an impending general election, allocating the largest ever sum of RM372.3bil in what it called 3R Budget – one that is responsive, responsible and reformist.
The responsive part of the Budget was its allocation to all groups of people in the country.
There were increased payments to the needy with large families amounting to RM2,500 and also tax cuts for the M40 and T20 groups, which were usually bypassed in past budgets.
It showed the inclusive nature of the Budget. The inclusiveness element, in a different sense, will also see those earning between RM250,001 and RM400,000 seeing a small tax hike.
On a net basis though, there will be tax savings within all tax brackets.
The responsive thrust of the Budget was to provide an umbrella for various needy groups in the country.
About 900,000 more people will benefit from the Bantuan Keluarga Malaysia 2023 proposal that saw a rise in allocation.
With inflation on the rise and hurting the lower income groups, no thanks to the steep increases in the prices of food, the higher handout will come in useful for families that are making tough choices in dealing with higher costs of living.
The Budget proposals were also exhaustive in ensuring all groups – from women to gig workers – had something to cheer about.
Upskilling and human capital development is always a welcome feature of any Budget and a good touch was to ensure all school-going children get assistance, regardless of their parents’ income.
The reduction in the stamp duty for first-time house buyers is a welcome one as whatever savings can go towards making a house a home.
The exemption of stamp duty in the transfer of houses to family members shows an understanding government.
In short, the government looked at where money needed to be spent and did just that – from encouraging tourism to giving businesses a lift and from lifting public services to encouraging healthcare services.
The continuation of subsidies for public welfare is good news for the poor but petrol subsidies have to be delivered in a more targeted manner.
The emphasis on fiscal reform is a responsible way of ensuring that we do not spend much more than what we earn.
The fiscal deficit has dropped to 4.4% of gross domestic product, an important message that future spending patterns would be aimed at improving the financial position of the government to ensure the 3.5% fiscal deficit target under the 12th Malaysia Plan.
Before the Goods and Services Tax makes its expected return, the government is looking at the einvoice and the use of a tax identification numbers to lift revenues.
Leakages will also be plugged by tackling the handling of cigarettes and liquor, along with how subsidised petrol is distributed and how it benefits the people.
Overall, the Budget looks to improving our telecommunication connectivity and helping small companies by lowering their tax rates.
It is also targeted at helping the country make the transition to the digital economy.
It is looking to ensure we have better food security and to secure Malaysia as an important global player, in issues such as lowering our carbon footprint.
The emphasis in ensuring our economy grows through continued investment will be crucial in creating not only income growth but also job opportunities for Malaysians.
