PETALING JAYA: Budget 2024 to be presented next month should be fiscally sustainable without too much populist measures to score political points, said a former top civil servant.
Tan Sri Sheriff Kassim, a former secretary-general of the Treasury, stressed the importance of this given the fact that government expenditures have gone up to over RM1 trillion in recent years.
“As revenues have also gone up, the fiscal deficit is not alarming with oil price expected to stay at US$100 (RM470) especially if China recovers from its present weaknesses while the US economy is expected to slow down as the Fed raises interest rates to reduce inflation,” he said in his social media post.
With the two economic giants growing slower, the rest of the world will follow suit and Malaysia could not afford to take the risks of government spending too much as the country’s growth might be affected by adverse conditions abroad, said Sheriff.
He also spoke of the Fiscal Responsibility Act (FRA) to be tabled in parliament next month to set a target of 3.5% to the gross domestic product (GDP) for the federal government fiscal deficit.
“We are now above that limit, about 4.5% of GDP. If the government budget is too generous on spending, we may not be able to go down to the FRA target of 3.5%. It will not be a disaster but the government will look bad for not keeping to its own target,” he warned.
Sheriff pointed out that the Budget should also be accompanied by government assurances for raising the public and private sector confidence on institutional governance, education, training, as well as racial and religious tolerance.
He said although these are outside the scope of the Annual Budget – primarily about expenditures and revenues – they are the real concern among the public.