There is no question that Malaysia needs to address the worrying trend of rapidly shrinking current budget surpluses — where revenue is just barely sufficient to cover operating and interest expenses. The prime minister himself has said as much. Falling into a current budget deficit means the government will have to borrow to make interest payments. Debt servicing costs will snowball — with more and more borrowings required to cover higher and higher interest expenses. Development investments will have to be sacrificed. The country will lose its competitiveness, and eventually become a failed state.
Prime Minister Datuk Seri Anwar Ibrahim, who is also finance minister, is set to table the revised Budget 2023 on Feb 24. As is the norm, there are speculations — and wish lists — in the run-up to the announcement, of what policy measures that could, or should, be included. We decided to write this article a full month early, in the hopes that the views and facts here will be considered.
If you recall, the original Budget 2023 was tabled in October last year, just days before Parliament was dissolved to pave way for the 15th general election. The rest, as they say, is history. Notably, this proposed budget was for a record high allocation of RM372.3 billion, of which RM272.3 billion was to be for operating expenses and RM95 billion for development. The budget deficit was estimated at 5.5% of GDP and, critically, the current budget surplus was more than halved to just RM230 million, from the RM517 million projected for 2022 and just 10% of the RM2.2 billion in 2021.
