PETALING JAYA: Economists from two think tanks have voiced disappointment over the continued racial emphasis in the 2020 Budget, saying the national budget should be geared towards needs-based initiatives.
Speaking to FMT, Ramon Navaratnam and Carmelo Ferlito also said the budget was not exciting though this was to be expected given the government’s constraints.
“It’s almost a budget of consolidation,” said Navaratnam from the Asian Strategy and Leadership Institute.
He however added that it was good that the government did not break the bank despite the slightly expansionary budget.
He welcomed the new income tax band of 30% for those earning RM2 million a year.
“This is fair in terms of wealth-sharing.”
But he said there were still many race-based initiatives and insufficient emphasis on needs-based initiatives.
“If the government has no money it could have at least made structural changes.”
Ferlito, from the Institute for Democracy and Economic Affairs or IDEAS said the government should move on from race-based initiatives.
He described the budged as a “low-profile budget”
“There’s nothing revolutionary or radical.”
He said the government missed a good opportunity to reform the tax system by keeping the sales and services tax (SST) instead of reintroducing the goods and services tax (GST).
“But it is good that the government has increased allocations for education and the focus on Technical and Vocational Education and Training (TVET) was good.”
Ferlito found it “strange” that the government was going ahead with the implementation of the digital tax in 2020 while at the same time it introduced incentives for the digital sector.
“A digital tax is inhibitive in this sense.”
Economist Barjoyai Bardai meanwhile said given the government’s constraints, it was overall, a “very good” budget.
He said the government touched on all aspects, and in particular the focus on the digital sector and the Bottom 40.
“It was not a budget which focused on big businesses but the small and medium enterprises,” said Barjoyai from Universiti Tun Abdul Razak.
He said details were needed on some initiatives such as those on human capital.
He said the government has shown that it is serious in investing in human capital when it announced incentives to help jobless graduates and women who left the workforce.
“I’d say that although the allocations for the different initiatives are not big, they plant the seeds for things to come.
“The impact of the various initiatives may not be seen immediately but in the coming budgets.”
Barjoya said the downside of the budget includes the 18% discount on toll rates that PLUS may give, which he said could affect the company’s revenues.
He also expressed concern over the continued sale of national assets.