Budget speeches in the past were predictable affairs – a statement outlining government intent on where and what it is spending for in the year ahead.
In good years, there would be goodies to give away and a deficit would not impose any sort of strain on the nation’s coffers.
When tax revenues decline or exports fail to shore up the trade balance, some measure of belt-tightening is in order.
Woe-be-tide governments that pull the purse-string to its choking limits that may result in street demonstrations, huge protests and ultimately lead to revolt if not bloody revolution.
The initiative to encourage declaration of unreported income will go some way to address the government’s GST and income tax refunds liability
No such worries for the still newly-minted Pakatan Harapan government which has just undergone, what can be considered its first major parliamentary rite of passage – that of tabling its first budget.
Having delivered a speech timed at well over two hours, Finance Minister Lim Guan Eng may not be sleeping too well on Friday night – not because of anxiety attacks but that the adrenaline rush of euphoria could still be coursing through his veins. And which minister would not – all eyes were on the former Penang chief minister, to see if he has feet big enough to fill the boots required for national-size duty.
Running Penang profitably pales by comparison, to the huge task of managing the entire nation’s coffers.
Presenting his maiden budget, Lim – who goes down in history as the only senior minister without a string of Datukships to his name to speak in parliament and dishing out the goodies to an expectant nation.
There were dire warnings in the weeks running up to budget day preparing for the possibility that his task was not that of finance minister playing Santa. And there were enough ruckus caused in the preceding weeks by still-formidable foes using the weapon of social media as bullhorn to poke and prod.
So when one by one a string of initiatives was rolled out, the feeling amongst restless adversaries was that this is going to be a task for splitting hairs.
Indeed, Guan Eng’s budget was greeted by a flood of responses. We start by looking at every budget’s biggest bugbear, taxes.
KPMG’s Head of Tax Tai Lai Kok is sanguine enough that the budget would contribute towards national resurgence, especially its commitment to inculcate fiscal discipline. The initiative to encourage declaration of unreported income will go some way to address the government’s GST and income tax refunds liability.
The introduction of a digital tax arising from gains in online services is ground breaking.
KPMG also observed how the imposition of excise duty on sugar sweetened beverages will aid the effort to promote a healthier lifestyle. It remains to be seen how elastic the effect would be now that casino duty and license fees would be more costly.
The Malaysian Institute of Accountants meanwhile welcomes the measure promoting SME development. This is available through the RM4.5 billion Loan Fund and RM2 billion worth of credit and takaful facilities for export made available for the sector.
Perhaps, more than just plain financial incentives, this budget will be noted for sowing the seeds to greater transparency through the proposal to table the Government Procurement Act.
Another incentive was the one percent reduction in corporate tax rate for SMEs with taxable income of up to half-a-million ringgit a year and with a paid-up capital of under RM25 million.
Perhaps, more than just plain financial incentives, this budget will be noted for sowing the seeds to greater transparency through the proposal to table the Government Procurement Act.
To prevent largesse and not repeat excesses of the past, a Fiscal Responsibility Act is proposed to prevent unrestricted expenses and to arrest any penchant to run up huge debts.
Running through the entire list would reveal how this budget will confound critics at the government’s ability to be generous but not to the point of irresponsible frivolity.
Indeed, only the most rabid voices from the opposition camp are finding cause to complain.
Ever the super trouper, Lim showed finesse to confound even the most rabid nationalist or die-hard religionist. This budget found room to award allocations for what should be their favourite causes, dousing any embers they wish to stoke to fan the fires of racial chauvinism.
If the reaction of a certain newsroom is any gauge, this budget has enough in it to go down well with the rakyat, devoid as it is, visible elements of brazen populism. No doubt, there will be room for nit-picking; some of which with justification. But hey; what's the debate process for? Use it!
Indeed, at the end of Lim’s speech, a raucous chorus of feet stomping and table banging greeted his rousing concluding remarks.
Who wouldn’t, when Lim found space in his concluding remarks to fit in news of developments in the United States where everyone’s top bogeyman – Jho Low has been charged for 1MDB-related offences.
All that is left now for MPs to regroup and debate this budget bill when Parliament returns from its Deepavali break. Only a brave fool would bet against its smooth passage.
