B40, civil servants likely winners in ‘feel good’ Budget 2018

There will be many goodies expected for individuals and businesses in general, says CEO


The upcoming Budget 2018 will likely concentrate on the needs of the bottom 40% of households (B40) and the government’s massive 1.6 million civil servants as the elections loom closer.

As the present government needs to call for the general election before August next year, Putrajaya is expected to allocate a sizeable portion of the budget to key beneficiaries like Federal Land Development Authority (Felda) settlers, active and retired civil servants, and retired uniformed services personnel.

Galen Centre for Health and Social Policy CEO Azrul Mohd Khalib said anyone making less than RM4,000 a month could benefit from direct cash handouts, bonuses, salary increments and affordable housing.

“In the absence of a substantial election war chest, the government will need to identify areas, prioritise key populations and narrow down their strategy in a way never before seen in Malaysian democracy,” Azrul told The Malaysian Reserve.

He said the budget needs to have a “feel good” factor before the general election.

“There will be many goodies expected for individuals and businesses in general,” he said.

But the challenge, he said, is for the government to reign in the rising cost of living which require cash handouts, cost reductions and subsidies.

Prime Minister Datuk Seri Mohd Najib Razak — who will table the budget on Oct 27 — has said there will be “good news” for civil servants in the budget.

The previous electoral-bound budget in 2012 saw a 7% to 13% salary increase for civil servants, while the minimum wage was raised to RM1,200 from RM832 a month in 2016.

For settlers, Najib pledged to provide incentives to some 110,000 families which would include debt forgiveness, grants for replanting, housing loans and a RM5,000 payout. Felda settlers form the majority of voters in at least 54 of the 222 parliamentary seats.

Meanwhile, about 80,000 non-pensionable armed forces veterans above the age of 60 are set to receive disbursements under the 1Malaysia People’s Aid programme, with the total allocation at RM85.8 million.

Najib — who is also finance minister — had earlier announced that pensioners who receive allowance of between RM500 and RM2,000 can expect to see a rise of between RM300 and RM800 in annuity.

Azrul did not discount a possible budget deficit in Budget 2018 unless new revenue streams are created includingnex taxes to enhance the government’s income.

The government has been successful in reducing the budget deficit in the last few years despite the high investment on handouts and infrastructure development.

Azrul said the budget will take advantage that the Malaysian economy is performing better than expected, as forecasted by the World Bank.

“It is aimed to ensure that Malaysians feel confident about the stewardship of the current government. However, translating those gains into a budget for the coming year is a reasonable challenge,” he said.