In this webinar, Mr Wong Chen and Mr Firdaos Rosli shared their views on Malaysia’s budget that was tabled on October 13, 2023.
MALAYSIA STUDIES PROGRAMME WEBINAR
Wednesday, 18 October 2023 – On October 13, 2023, Malaysia’s Finance Minister, who is also Prime Minister, Datuk Seri Anwar Ibrahim, tabled Malaysia’s Budget 2024 themed “economic reform, people’s empowerment” which involves an allocation of MYR 393.8 billion (USD 82.4 billion). While officially called the second Madani Budget, this budget is truly the first to be fully conceived and supervised by the Unity government. The Malaysia Studies Programme organised a webinar to shed light on this pertinent issue, with Mr Wong Chen and Mr Firdaos Rosli as the guest speakers. Mr Wong Chen is the Member of Parliament for Subang while Mr Firdaos Rosli is the Chief Economist at Bank Islam.
The two speakers began by sharing their main takeaways from the budget. Mr Wong Chen viewed key propositions of the budget in a positive light, including the revenue projection, commitment to progressive taxation, reduced subsidy for the upper class, and less dependence on Petronas, but noted that ultimate effectiveness boils down to implementation. Mr Firdaos zoomed in on the numbers that demonstrated enhanced fiscal strength, noting that the budget hit the right notes on face value. He drew attention to the smaller increase in total allocation and deficit control, demonstrating clearer policy direction. To Mr Firdaos, notable points of the budget include the clearer distinction of income tiers, removal of price ceiling for chicken and eggs, and increase in Sales and Service Tax. He argued that the impact of the inflationary budget could be the same as reintroducing the Goods and Services Tax (GST), just with the absence of revenue buffer.
The speakers then delved deeper into the ideological undercurrents of the budget beyond the numbers, giving their respective takes on what Madani really means. Mr Wong Chen pointed out that the move to tax capital gains from unlisted shares (and not listed shares) is a clear indication of the current situation, that of taking small steps to emerge from a crony capitalist system while having to contend with the still powerful cronies and impacts of the 1Malaysia Development Berhad (1MDB) saga. When asked what the Madani economy is about, Mr Firdaos pointed out that six out of seven Madani economy targets are growth-related, which cannot be achieved by focusing on deficit reduction alone. He cautioned that having both high labour income share and high inequality is possible and warned that class loyalty to old categories of class may hamper prospects of social mobility. Nevertheless, Mr Firdaos noted that whether the goals can be achieved by 2033 cannot be gauged from this budget alone.
The webinar proceeded to a Q&A session. Both speakers fielded questions covering a wide range of issues, including Malaysia’s preparedness for global security upheaval, government support amidst inflation, deindustrialization, sustainable financing for retirement, rising debt servicing, and regional imbalances. They also gave their takes on what they would like to see in the following year’s budget. Malaysia Studies Programme Co-coordinator Dr Lee Hwok Aun moderated this webinar, which was attended by 81 people.