COMMITTEES TO LOWER FISCAL DEFICIT TO 2.8pc OF GDP THIS YEAR
Public Finance Committee and Tax Reform Committee to cut deficit to 2.8pc of GDP
THE government is forming two committees to lower Malaysia’s fiscal deficit to 2.8 per cent of the gross domestic product (GDP) this year.
Finance Minister Lim Guan Eng said the Public Finance Committee (PFC) would outline the government’s medium-term fiscal plans, while the Tax Reform Committee (TRC) would assess the tax system to minimise leakages and tax evasion.
The government planned to monetise some holdings in noncritical, non-strategic companies, while engaging in planned and scheduled public auction of state land.
Lim said the measures were to rationalise the country’s RM1.09 trillion debt and liabilities that had risen sharply after years of imprudent and opaque management of government finances by the previous administration.
“Despite various legacy challenges, the Federal Government is steadfast in lowering its fiscal deficit to 2.8 per cent of GDP this year.
“We will proceed with our fiscal consolidation agenda gradually in a more sustainable manner without hurting economic growth and the people’s wellbeing,” he said yesterday.
Lim said he would chair PFC and members would include Economic Affairs Minister Datuk Seri Azmin Ali and Bank Negara Malaysia Governor Datuk Shamsiah Mohd Nor.
He said TRC would work on making the tax system more efficient and progressive without burdening people, while promoting longterm productivity of the economy.
He said the monetisation of non-critical, non-strategic government-owned companies would be carried out orderly.
On the public auction of government-owned land, Lim said previously, these land assets had often been sold at steep discounts to politically-connected entities under opaque arrangements, which deprived the government of revenue.
He said the government would ensure the domestic environment was stable to support growth.
However, he said, like other emerging markets, the performance of the domestic capital market and the ringgit had been affected by global events.
“This is evident in the rise in sentiment among various economies after the United States and Mexico reached a trade deal.
“The FBM Kuala Lumpur Composite Index rose 0.8 per cent or 15.3 points yesterday (Tuesday) after the United States and Mexico reached a trade deal.
“Year-to-date, (Bursa Malaysia’s benchmark index) FBM KLCI has risen 1.7 per cent. If the US and China could agree to resolve their trade disputes, then the Malaysian capital market and the value of the ringgit would rise.
“If no deal could be reached, the reverse would happen. The government is monitoring this global development intently and is prepared to act accordingly, if needed, to protect the people’s wellbeing.”
The Finance Ministry is seeking input from industry players, professional bodies, non-governmental organisations and government agencies ahead of the tabling of the 2019 Budget on Nov 2.
Lim said following the 2019 Budget consultation on July 12, focus group meetings had been scheduled from this month to next month to gather views and recommendations on issues, including the domestic workforce, quality of the education system, sustainable development and living costs among the urban poor.
People are invited to participate by contributing ideas and suggestions to belanjawan2019.treasury.gov.my until Sept 30.
The views are also welcome on Facebook, Instagram and Twitter by using the hashtag #belanjawan2019.