The mentality behind the budget

budget-2017-1

By Sin Chew Daily

Budget 2017 is out, and the reactions from the public have been mixed.

Outside these vastly differing views on the Budget, what demands our attention is the fact that some of the most criticised measures in our fiscal budgets in recent years have been reproduced yet again. The most notable example being the serious off-balance disparity between the government’s operating and development expenditures.

Total expenditures for next year’s Budget stand at RM260.8 billion, of which operating expenditures will take up RM214.8 billion or a whopping 82.4 per cent of the total, leaving only less than a fifth or RM46 billion for development expenditures.

Another instance is the enormous expenditure set aside for the country’s civil servants. Total salary payouts to civil servants will hit a high of RM77,421,870,400 or about 29.7 per cent of the entire budget for next year.

And then we have the much-anticipated but also highly controversial political “candies”. The BR1M amounts will rise further next year, with households earning less than RM3,000 a month set to get RM1,200 from the government.

It is not new that the proportion of our operating expenditures has been unusually high, our civil service sector unreasonably bloated and populist policies infinitely extended, among other unhealthy phenomena. And we are all well aware of the harms these policies will do to the national economy as well as the country’s overall competitiveness.

The massive operating expenditures will squeeze the development expenditures, making it impossible for the government to put more resources in long-term construction projects.

The same goes for the generous civil servant remunerations. What makes things worse is that this condition will snowball into a real burden to the national coffers.

As for the candies and populist measures, they will at best produce short-term benefits. In the long run, they will cause unnecessary wastage of the country’s precious resources and not augur well for our long-term development.

The various problems plaguing our fiscal budgets year after year will continue to surface, and the key lies with the fact that the mentality behind the mapping, driving and influencing of allocation of the country’s resources has remained unchanged.

The government now is more concerned about keeping the power it has in hand, and will concentrate on near-term effects at the expense of long-term development. As such, it is within everyone’s anticipation that “candies” will continue to pop up here and there.

When the government has identified the civil servants as a major asset in its vote bank, a pivotal factor that will keep the ruling coalition’s power steadfast, it then will come as no surprise that the size of the country’s civil service will keep swelling, along with the relevant payouts.

Budget 2017 to a very large extent reflects the mentality of our government, which has avidly pursued near-term effects instead of long-term development. This is one of the reasons we have such an off-balance disparity between operating and development expenditures.

At the same time, when the public continues to savour the political candies offered, it is inevitable that the government will be encouraged to hand out more candies in the future.

If this kind of mentality is not rectified, our future budgets will only go down this same path for many more years to come until we finally hit a dead-end.

Along the way, perhaps the fine details of the budget content might see some outward changes in line with the prevailing conditions, however the big direction will not change, unless the mentality is overhauled.

Sin Chew Daily is a local vernacular publication

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