Today, Friday (Nov 2) will go down in Malaysia history as the first federal budget that will be tabled in Parliament by a new government since Independence in 1957. The government’s 2019 Budget will be presented by Finance Minister Lim Guan Eng at 4 pm.
While the expectations are high, this could turn out to be one of the toughest budgets amid a list of alleged misappropriations, dubious spending and a ballooning unjustifiable debt left behind by the previous government, making the fiscal balance sheet almost beyond fix.
Lim said recently that the upcoming 2019 Budget would be “difficult” as the government needed to reduce the RM1 trillion national debt to bring the economy back on track fiscally within three years.
“This means the new government would have to undertake a herculean task to clean up its balance sheet and at the same time steer the economy out of an impending economic slowdown in the coming years,” Kenanga Investment Bank said in a Research Note as cited from Bernama.
The 2019 Budget allocation would be based on average crude oil price of US$70 per barrel, although the benchmark Brent crude oil was nearing US$80 per barrel currently.
The government’s revenue for 2018 will decline to RM21 billion following the reinstatement of the Sales and Services Tax on Sept 1, 2018, to replace the GST. The net impact is a RM17 billion loss in the government’s coffers this year.
source: Bernama