Budget 2023: Expansionary but still responsible

ONCE again, it’s the largest ever budget in Malaysia’s history: At RM372.3bil, Budget 2023 surpasses Budget 2022, which previously held that distinction with RM332.1bil.

On Friday, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz tabled the “Keluarga Malaysia, Makmur Sejahtera” (A Prosperous Malaysian Family) budget in Parliament.

Announced against the backdrop of intense speculation that the 15th General Election will be held soon, many wondered if it would be a populist, pre-election budget.

However, the plans for next year seem conservatively disciplined, while still including measures that will help the rakyat.

The Finance Minister said Malaysians from all segments of society will receive help even as the country braces itself to weather the challenging global economy next year.

While this year’s rebound following the opening up of the economy and our borders has surprised analysts with its strength – the government revised 2022’s GDP forecast to 6.5% to 7% from a previous range of 5.3% to 6.3% in a pre-budget fiscal report – growth is expected to slow next year, to an estimated 4% to 5%.

So it’s reassuring that the government has vowed to strengthen the country’s economic basics by reviewing public expenditure and changing across-the-board subsidies to assistance targeted at truly vulnerable groups.

But it’s also good to know that the sometimes neglected middle class (the M40 middle income group) that has been struggling, with some even dropping into the B40 (lower income) group over the last two years, will also be getting some attention in the form of a reduction in tax of two percentage points for those in the RM50,000 to RM100,000 bracket.

This is the first time that income tax rates have been reduced since 2015, and it will give more than a million middle-income earners more cash in hand next year that will, hopefully, stimulate the economy as they spend it.

Helping the future generation of income earners is a good plan too. As Tengku Zafrul said, urgent action was needed to ensure a bright future for the younger generation.

He called Budget 2023 an expansionary but also a responsible one that balances spending with new fiscal measures to achieve sustainable government finances in the long run.

Not bad for the last budget before the next general elections.