Govt to cut fiscal deficit to 2.8% this year, says Lim

Finance Minister Lim Guan Eng says the government is confident of saving more money in the future, especially with the wider use of the open tender process. (Gambar Bernama)

KUALA LUMPUR: The government aims to cut its fiscal deficit to 2.8% of gross domestic product this year, says Finance Minister Lim Guan Eng.

He said the target would be met through various measures, including cancelling and postponing unimportant low-multiplier government expenditure by RM10 billion.

“The government is confident of saving more money in the future, especially by the wider use of the open tender process,” he said today at the signing of a memorandum of understanding (MoU) between Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP) and United Overseas Bank (Malaysia) Bhd.

SJPP is an administrator and manager of credit guarantee schemes under the finance ministry.

Bank Negara Malaysia estimated the fiscal deficit in 2017 at 3%.

Lim said the need to optimise government expenditure calls for a true public-private partnership that splits the developmental cost between the two.

This would help the government provide public infrastructure without having to spend too much public resources, he said.

He said public-private partnerships are one of many measures to be discussed by the Public Finance Committee (PFC), which is tasked with strengthening public finances by outlining the government’s medium-term fiscal plans.

“The PFC will also help the government deal with the RM19.4 billion unpaid goods and services tax (GST) refunds. In order to manage the government’s fiscal position, disbursements will be made gradually from next year.

“Payments for small businesses will be prioritised as they are likely to be the most affected by the delay in the refunds,” he added.

Following the signing of the MoU, small and medium-sized enterprises can obtain collateral-free loans of up to RM1 million through the SJPP-UOB BizMoney financial solution.

SJPP will guarantee up to 70% of the loan through its Working Capital Guarantee Scheme and Services Sector Guarantee Scheme.

The SJPP-UOB BizMoney financial solution provides flexible repayment tenures of 18, 24, 36, 48 or 60 months, with interest rates starting from 0.54% per month.