BUDGET day tomorrow carries great significance, especially as it manifests how the new Federal Government intends to govern after the May 9 general election when Malaysians witnessed for the first time the opposition taking over the reins of the government.
Since then, we have been inundated with shocking official revelations of our national coffers in rather dire straits. We may or may not believe the overall bleak and alarming picture of the country’s financial circumstances, but, it is perhaps understandable why Finance Minister Lim Guan Eng would want to project an image of a nation in grave distress.
The good politician in him must make Lim realise that in any democracy, necessarily tough measures and perhaps even bitter medicine will only go down better if Malaysians have been conditioned beforehand that they are staring a crisis in the face.
There must be the hope that when some tough budgetary initiatives are inevitably revealed tomorrow, they can be sold to the public as moves by a responsible government to correct a listing ship of state.
It is unfortunately an axiom that no popularly elected government will want to adopt economically painful measures such as increased taxes if it can help it. Which is why most democratic governments everywhere often wait until it is almost too late — with the onset of a financial crisis, for example — before corrective measures are adopted.
The other inescapable reality is that none of us lives in a political vacuum. A good national budget thus will always have to be one that strikes just the right equilibrium between being seen as an economic dampener (as increased taxes surely are, even as they buttress the national treasury) and being expansionary in other ways, especially with measures in aid of the more vulnerable groups among us.
There is also the political imperative — that the government seems fully aware of — to answer the popular clamour in Sabah and Sarawak for greater budgetary focus from Putrajaya to correct widely perceived development imbalances in both states vis-à-vis the rest of the country. This will prove particularly tricky at a time when there are already limited government funds to throw around overall.
Financial housekeeping aside, many will also be keenly watching to see how the first budget of a Pakatan Harapan (PH) administration goes about restructuring or re-directing the national economy, going forward. One elephant in the room is the long known bloated Federal public service. PH could not resist the populist attack while in opposition against this but now that it is in government, it recognises that there is little it can do but to go on feeding the beast since it has to rely on public servants to deliver on its promises and not sabotage them instead.
There has to be fresh thinking on how this issue will eventually be tackled, budget, or otherwise. It cannot be resolved overnight but there ought to be some indication and initial steps taken to show the government seriously intends to address this in the longer term.
Another issue PH has already reneged on is the promise to significantly raise the minimum wage, proving once again to voters that if promises made to them sound too good to be true, they usually are.
Wages need to be tied to productivity increases, even if only tenuously, and not to some academically conjured ideal. But the government probably has its head and heart in the right places if it recognises that low general incomes are a bane to the economy.
How best to put more money into the average household budget without breaking the bank or ruining the general economy in the process is another area that a new government will hopefully be giving us new thinking about.
Given that a sizable chunk of the average household budget goes towards putting a roof over the head, the government is certainly on the right track in the preceding few months seeking ways to make housing truly affordable. A couple of hundred ringgit saved per month in the housing budget means that much more discretionary income to be spent to boost local consumption, the multiplier effect of which will do wonders for the overall economy.
Malaysia is indeed truly blessed. We brought about a reformist-minded government with a minimum of political disruption. Tomorrow’s budget must lead us on a virtuous path while we still have options, not when we are forced to.
The writer views developments in the nation, the region and the wider world from his vantage point in Kuching, Sarawak