Some sectors, especially tourism and SMEs, have requested for more fiscal aid to help keep afloat
graphic by MZUKRI MOHAMAD
THE stakes are high for Prime Minister (PM) Tan Sri Muhyiddin Yassin as his administration tables its first federal budget amid a Covid-19 resurgence and political threats.
The Perikatan Nasional (PN) government faces an uphill task to present a spending plan that is inclusive enough to win support from its factious allies and rivals.
In a recent interview, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz reportedly described today’s budget as the “most-important budget in history”.
He hinted there will be more development expenditure in this budget, aimed to create a multiplier effect in the long run.
Some sectors, especially tourism and small and medium enterprises (SMEs), have requested for more fiscal aid to help keep their business afloat.
The focus will be on how the government is looking into addressing the economic and health issues, apart from restoring people’s confidence.
Muhyiddin’s failed bid to declare a state of emergency last month has led to plenty of haggling over the federal budget, putting a political strain on the administration.
Distinctive demands had been put forth, with political leaders threatening to reserve their votes unless their conditions are met. Many had called for more cash assistance for vulnerable households, measures to save jobs and increased resources for the Ministry of Health to fight Covid-19.
All, however, were united in their support for an extension to the moratorium on loans.
Last Saturday, in a live televised address, the PM urged all politicians to put aside their political differences in order to put the people’s agenda above all interests.
“I hope all MPs can put aside their political differences to ensure Budget 2021 is passed for the sake of the people and the country.”
On Budget 2021, Muhyiddin said the government will table an expansionary budget to ensure people’s prosperity and economic resilience amid the pandemic.
He said the fiscal plan will be a continuity from the four stimulus packages worth RM305 billion that were announced previously.
The initiatives account for about 20% of the nation’s GDP, with an additional fiscal injection totalling RM45 billion by the government.
Further spending to prop up the economy is expected to double the fiscal deficit to around 6%, with the government’s debt and contingent liabilities now at RM1.2 trillion.
While efforts to reopen the economy will likely see the economy bounce back to an estimated -4.3% in the third quarter (3Q), from the -17.1% contraction in 2Q, the rising number of Covid-19 cases in recent weeks is expected to impede a sharper rebound.
Muhyiddin recently said the number of unemployed persons in the country had risen to over 800,000 since the pandemic began. The reintroduction of stricter movement measures across major cities in Malaysia will likely see more job losses as new movement restriction orders hit businesses.
The third wave of Covid-19 cases also presented an opportunity for the government to fend off any attempts for a vote of no-confidence against the PM.
With parliamentary sessions cut short and attendance limited to just over a third of MPs at a time, any risks of challenging the premiership in the Dewan Rakyat have been effectively reduced.
Voting on the budget is expected on Nov 25, after a total 66 hours of debate at the policy level.
Despite the removal of some obstructions, the road ahead will not be an easy path to tread…