VIEWPOINT

failing to perform tasks. Hard work, honesty, and a sense of shame at failure will spur us to give our best.

While economic growth and institutions matter, the benefits to the people are equally important. We do know that a nation’s development is not just about its gross domestic product or the market capitalisation of the stock market. It is about building a better standard of living for everyone.

We don’t want a thoroughly unequal society where capital owners take too much a chunk of the national income, leaving the workers or low-income households with scraps. So I urge all of you to have a stakeholder mindset. Pay your workers better if you make more profits. We noticed that the pay for CEOs has been increasing multifolds, but workers’ wages had been slow on the rise if not stagnant. This is not right.

Shared prosperity means that everyone benefits and such a situation is conducive for growth and stability. We cannot have one group succeeding, dominating or monopolising everything, while others lag behind. The gap between the haves and have-nots must be narrowed. If disparity is left unchecked, it will create tension and hostility, and eventually lead to confrontations.

To restore credibility in the economic and financial policies while reducing our vulnerability, the immediate challenge is to reduce debt and liabilities and rebuild our fiscal space.

We are introducing the Fiscal Responsibility Act to ensure public sector accountability in presenting the accounts and balance sheet of the country — just as the private sector faces criminal liability for fiddling and cheating with the accounts of a company.

A debt and liability management committee has been formed to look at the government’s balance sheet and implement strategies to reduce debt and liabilities, including government guarantees. The reckless utilisation of off-balance-sheet instruments by the previous government has led to a massive build-up of contingent liabilities to the government, some already materialising. This committee is currently undertaking measures to strengthen the overall debt management framework.

The strategies, among others, include greater risk control parametres on issuances of government guarantees, better market access and identification of opportunities on potential asset monetisation, which means mature unlisted government entities may be listed in the stock market, as well reducing some of our GLCs’ shareholdings in the public-listed companies.

The key guiding principles for monetising any of our assets is that the disposal or monetisation must never be done at fire-sale prices, and any disposal of shares, monetisation of assets, auctions or other measures will be done in an orderly manner and communicated cohesively across all implementing entities. There shall be no disruptions to the capital markets, confidence of the financial markets, ratings environment, and economic growth.

In term of overall fiscal management, the Fiscal Policy Committee, chaired by the prime minister, is monitoring key developments closely to ensure that our fiscal consolidation target will remain on its path. We are confident that we are on track.

The Tax Reform Committee is also in the final process of finalising the proposal to enhance tax revenue. The proposal will address measures to reduce tax leakages, how to access the underground economy, enhancing tax administration, and finding new sources of revenue.

We are also rationalising tax incentives for investments, as the current administration and governance structures of investment incentives are highly fragmented, costly, and ineffective.

Malaysia currently offers over 130 types of incentives administered by 32 Investment Promotion Agencies (IPAs), with varied roles and responsibilities, and several approving agencies. Our proposal entails holistic and simplified tax investment incentives that would be attractive for future investments.

Incentives will be granted to desired sectors and types of investment that the country needs, and tie the incentives to specific KPIs (key performance indicators). Agencies involved in granting and approving tax incentives will also be streamlined.

The corporate tax rate is already competitive. For this year, the corporate tax rate will be reduced to 17 per cent from 18 per cent for SMEs (small- and medium-scale enterprises) with a paid-up capital below RM2.5 million and businesses with annual taxable income of below RM500,000. For large companies, while the tax rate is slightly higher, the effective tax rate is less than 10 per cent due to these incentives.

There will be no new tax this year, except for the sugar tax which we have already announced. It is delayed a bit as we want to ensure that the mechanism is effective to primarily meet our health objectives. Beginning next year, the government will use the revenue collected from this tax to provide a free and healthy breakfast programme for all primary schoolchildren. We want our kids to be strong and healthy to perform in school.

We are currently rationalising our expenditures. For instance, the social protection and assistance programmes are being streamlined. We have over 110 programmes under 21 ministries and agencies. The current system is too fragmented, less targeted to households needing it most, and does not promote upward social mobility.

By consolidating and connecting these programmes, it allows us to create a more comprehensive social protection ecosystem. Coupled with effective monitoring and evaluation processes, this will ensure that the government is getting the most out of them.

A social well-being council has been established and led by the deputy prime minister. It will become a policy-setting centre for this important agenda. We want to create a safety net for those who are vulnerable, which will help them bounce back out of their vulnerabilities and move on to improve their social mobility.

The recently formed National Economic Action Council (NEAC) has been given the mandate to act swiftly to address pain points and to identify quick wins to stimulate economic growth with which we can improve the wellbeing of the rakyat.

In ensuring the sustainability of our economy, we must increase productivity. This depends on a quality workforce. Quality workforce depends on quality education. We want our human capital that is “e-ready” and “e-fit”.

Our vision is to produce quality, future-proof and values-driven graduates through three main outcomes — firstly, the emphasis on values in education; secondly, increasing quality across the system and thirdly, more autonomy and accountability.

In the last 10 months, key steps have been taken towards these ends. They include reforming the curriculum where the national civic and religious education curricula are currently under review to ensure values are practised and inculcated. In other words, let’s make national schools great again.

We have abolished exams for Standard 1 to 3 to make way for a more holistic development of