Analysts are commending the fiscal direction of Budget 2024, which was presented by Prime Minister Datuk Seri Anwar Ibrahim on October 13. While it showcases the government’s commitment to fiscal reforms, experts warn that the Opposition might seize opportunities for criticism.
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Sunway University’s political scientist, Wong Chin Huat, expressed his appreciation for the budget’s clear sense of purpose and direction. He noted that with no imminent election or government change looming, the government is steadily advancing its fiscal reform agenda. One key highlight is the reduction of the budget deficit as a percentage of GDP, signaling a strong commitment to economic management.
The Finance Ministry has set a target to achieve a 3.5% deficit to GDP ratio by 2025, with this year’s ratio estimated at 5% and projected to be 4.5% next year. Wong suggests that this move will enhance market confidence, given the ruling coalition’s stable majority in parliament. He believes the budget is likely to pass without significant alterations.
In assessing the Opposition’s influence, Wong points out their limited impact, lack of a recognized shadow Cabinet, and minimal resources for proposing alternatives. This situation may lead them to nitpick the budget without providing substantive solutions.
Wong highlights the government’s efforts to shield its support base from undue hardships. For example, the subsidy targeting measures apply only to diesel, excluding RON95 fuel. Additionally, the increase in the Sales and Service Tax from 6% to 8% exempts everyday food and beverage items and telecommunications. These adjustments aim to protect the income groups of B40 and M40 while indicating the government’s intent to bring about change.
Nevertheless, the budget’s ability to satisfy a broader segment of society may hinge on factors beyond the government’s control, such as inflation and food security, which can be influenced by international events like the war in Gaza. Wong also emphasizes that the budget prioritizes maintaining coalition stability, avoiding any elements that might disrupt the unity within the coalition government.