PUTRAJAYA: Malaysian Prime Minister Muhyiddin Yassin said on Wednesday (Nov 4) that the government will table an expansionary budget to ensure people’s prosperity, business continuity and economic resilience amid the COVID-19 pandemic.
He said during a television interview that the first focus for budget 2021, which will be tabled on Friday, is to fight against COVID-19 from the perspective of health. Therefore, substantial funds will be channelled towards handling the pandemic and extending the necessary support to frontliners, he added.
“We will do it now and continue to do it until COVID-19 is over,” he said.
The prime minister also said that the budget is a continuity from the four stimulus packages worth RM305 billion (US$73.2 billion) that were announced previously.
The most recent stimulus package was the additional assistance under the RM10 billion PRIHATIN Supplementary Initiative Package, which is in line with the government’s efforts to boost economic recovery.
The KITA PRIHATIN package is an extension of the previous economic stimulus packages, namely PRIHATIN, PRIHATIN SME PLUS and PENJANA worth a total of RM295 billion, or about 20 per cent of the nation’s gross domestic product (GDP), with an additional fiscal injection totalling RM45 billion by the government.
Bank Negara Malaysia has revised its 2020 GDP growth forecast to between -5.5 per cent and -3.5 per cent from -2 per cent to 0.5 per cent previously.
Malaysia’s economy is expected to recover and post a growth of between 5.5 per cent and 8.0 per cent in 2021.
“The budget is part of the 6R plan embarked on by the government, namely Resolve, Resilience, Restart, Recovery, Revitalise and Reform,” he said during the one-hour interview.
He added: “The government will continue to spend in a relatively difficult situation to boost the country’s economy.”
Budget 2021 is set to be tabled on Friday, with the scheduled debate to end on Dec 10.
Commenting on the government’s decision to increase the debt-to-GDP ratio from the statutory limit of 55 per cent to 60 per cent, Mr Muhyiddin said this has given ample room for Putrajaya to embark on an expansionary budget.
Maybank Kim Eng’s economic research forecast a deficit of RM90 billion, or 6 per cent of the GDP, versus an estimated RM95 billion, or 6.7 per cent of the GDP in 2020.
The 2020 budget unveiled last year was worth RM297 billion.
Besides health, Mr Muhyiddin said the second focus area of next year’s budget is to help the vulnerable, both individual and micro enterprises, especially those affected by COVID-19.
“Third is to stimulate economic activities to provide job opportunities, business activities in addition to driving growth and recovery in 2021,” he said.
The government would also roll out incentives to attract foreign direct investments (FDI), said the prime minister.
“The situation at the global level is challenging and many countries are vying for investment in their countries. So, this is something we are paying attention to in the future. We want to launch a business infrastructure ecosystem.”
Hence, Mr Muhyiddin said the incentives to attract FDI into Malaysia will not only apply for next year but also in 2022.
For the first six months of 2020, Malaysia recorded RM64.8 billion worth of investments in the manufacturing, services and primary sectors.
Of the total investments approved, domestic direct iInvestments (DDI) accounted for 69.8 per cent, or RM45.3 billion, while FDI comprised the remaining RM19.5 billion.
On Wednesday, Mr Muhyiddin also expressed hope that all Members of Parliament (MPs) including those from the opposition bloc will support the proposed budget for the sake of the people’s well-being and the country.
“Looking at the importance of budget 2021 in pursuing our efforts to handle COVID-19, ensuring the survival of the vulnerable, and steering the economy, I really hope that all MPs from every political background will support the budget 2021,” he said.
He added: “The issue before us is not merely a government issue, but a national issue. If we love our country … we will try to save it in any way possible.”
The prime minister said the government is carrying a huge responsibility and burden on its shoulder regarding the budget.
“The burden can be alleviated if all quarters could set aside their political beliefs and help the government.
“The Cabinet can play their part, government officers can also play their part, but if the others could also help in any way, it will be the sacrifice that we will really appreciate,” he said.
“I hope this can be done so that the burden of the government and the people can be alleviated.
Mr Muhyiddin said budget 2021 is an inclusive budget as the views of various quarters, including the opposition, non-governmental organisations, businessmen and people from all walks of life have been taken into consideration.
This is also the first time in the country’s history that inputs from the opposition were taken into account in the formulation of the national budget, he noted.
In a statement on Wednesday, Istana Negara said King Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah appreciated the spirit of bipartisanship and consensus displayed among the political parties over the budget.
The king had earlier called for all MPs to give their solid support to the budget. Should the MPs vote against the budget, the defeat would be considered a no confidence vote against Mr Muhyiddin, who commands only a razor thin majority in the parliament.
“Al-Sultan Abdullah is of the opinion that political maturity through setting aside differences and party or personal interests is very important now, for the safety and welfare of the people and the well-being of the country which have been affected as a result of the COVID-19 pandemic,” the palace said.