PETALING JAYA: Umno deputy president Mohamad Hasan has urged the government to set aside fiscal consolidation goals in the upcoming Budget 2021 and instead spend more for the welfare of the people who have been deeply affected by the economic repercussions of Covid-19.
He said the narrative to reduce government deficit as a means of fiscal strength must be rejected for the time being.
“Don’t be too concerned about the government debt ceiling that has recently increased to 60% of the GDP.
“Government debt is for us to manage later on. The main order of business, and the most important aspect of Budget 2021, should be sustainability and the welfare of the rakyat,” he said in a statement today.
He said fiscal consolidation efforts should therefore be postponed temporarily until 2022, as the economy is expected to recover by then.
However, he cautioned that doubling up on spending and economic stimulus in the Budget should not be seen as a blank cheque for the government to spend freely.
“Government spending must be planned and implemented with accountability and transparency, with determination to avoid all forms of leakages.”
He also urged the government to continue utilising domestic or internal debts by using the local bond market, especially government securities, to support the Budget spending.
He said this would not have negative effects on the economy considering Malaysia will not be tied to foreign regulations that would otherwise apply if the government borrows from institutions such as the International Monetary Fund (IMF).
He said internal debts were also less exposed to changes in foreign interest rates and any depreciation in currency value as the debts will be in ringgit.
“Therefore, Budget 2021 must be an expansive budget to save jobs, businesses and small and medium enterprises which have been badly affected.
“This is the time for the government to double up on assistance and stimulus using targeted approaches to help those who are the most affected.
“We cannot let the rakyat suffer, and businesses to close forever, while the economy gets trapped in irreversible damage.”
Prime Minister Muhyiddin Yassin is set to table Budget 2021 on Nov 6 during the upcoming parliamentary sitting.
Source: https://www.freemalaysiatoday.com/category/nation/2020/10/31/spend-more-to-stimulate-economy-under-budget-2021-says-tok-mat/