2022 budget revenue figures are too high, says MP
By FMT Reporters (31 October 2021) PETALING JAYA: The revenue figures projected by the government in the 2022 budget estimates have been challenged by an MP as being flawed, illogical and too high. Subang MP Wong Chen said the projected 2022 revenues were higher than the net revenues of 2019, before the Covid-19 pandemic, after deducting a tax amnesty gain and an extraordinary Petronas dividend of RM30 billion. “This is not logical and as such these revenue numbers are flawed, yet again,” said Wong in an article for a community newspaper.
He said he had previously challenged the revenue projection of the 2021 budget and had been proven correct “when the government got into a cash flow crunch in early 2021 and had to revise down its 2021 Opex” (estimates of operating expenditure).
Wong, said the government estimated that the projected growth rate of the economy next year would generate RM234 billion of tax and non-tax revenues, which he described as “too optimistic”. It would mean that the estimated 2022 operating expenditure would be unsustainable. However, he hoped the over-estimate “will not be too far north, and not disrupt government operations by a wide margin”.
In an analysis of the 2022 budget estimates, Wong said the development expenditure, estimated at RM75.6 billion, was “extraordinarily large” and the biggest in Malaysian budget history. Funded by borrowings, the resulting “massive pile of debt” would cost RM43 billion to service next year. Wong said the ill fiscal discipline of successive governments and not just the current administration had resulted in Malaysia’s large national debt.
He pointed out that the last time Malaysia registered a surplus budget was in 1997, when Anwar Ibrahim, now PKR president, was the finance minister.
Wong said the government should have practised fiscal sanity with a budget that focused on economic recovery, without spending “obscenely” on development “(which tends to favour the connected and the cronies) and definitely not for any form of mega projects”. “My wish list would have been a generous pro-recovery budget of RM310 billion, and yet save Malaysia RM22 billion in unnecessary spending,” he said.
A larger Covid-19 Fund of RM30 billion should have been provided, to give small enterprises greater support, operating expenditure kept to RM225 billion by reducing wastage and reforming procurement systems, and development expenditure kept to a more “measured and reasonable amount” of RM55 billion. He said he would have reduced the budgets for the defence, home and foreign ministries and increased the budgets for anti-corruption and democracy efforts at a cost of not more than RM200 million.
More funds would be provided for Parliament and the Auditor-General’s office but he would hold back an increase in the budget of the Malaysian Anti Corruption Commission pending reforms within MACC because of allegations of internal corruption and abuses of power.