Clever budget

Ahouseholds. It has been a tough path for manufacturers over the last year, and they could have been rewarded with tax cuts to shoulder the burden of higher production costs.

Incentives for the manufacturing and services sector would perhaps have made more sense than those for the adoption of Industry 4.0. Without getting caught up in the hype that surrounds Industry 4.0, it should not be forgotten that Malaysia is still valiantly negotiating the transition from 2.0 to 3.0.

It must be added that the budget has a sprinkling of mixed and wrong signals.

Earlier the government had cut its allocation to public universities. If the signal of earlier policy measures was meant to convey the message that universities need to be innovative in raising their own funds, this has been back-tracked in this budget by awarding additional grants.

The huge dole-outs for civil servants is politically comprehensible, but not economically rational at a time when the debate is on reducing the size of the civil service, increasing their productivity, and, more generally, reducing operating expenditure. Since the civil service is a huge vote bank, one cannot count on any political party to campaign for a reduction in their size. Nevertheless, there seems to be little need to continually reward them.

Another area of inadequacy in the budget is the treatment of housing and healthcare. Housing and healthcare have, once again, received an ad hoc and short-termist treatment. It is way overdue to introduce a health financing scheme, rather than to provide selective relief for, say, dialysis.

On housing, civil servants and the armed forces are not the only groups that need affordable housing; a comprehensive plan has to be laid out for the middle- and lower-income population, as a whole. This is long overdue, and it is unfortunate that it has been postponed yet again.

We really need to be concerned about access to healthcare and greatly improved services for the average Malaysian rather than to focus on medical tourism or creating a medical speciality hub. The budget misplaces its priorities here.

The pre-occupation with appeasing as many groups as possible (on all bases: ethnic,