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HomeMalaysia NewsBudget 2024 Signals Fiscal Reforms, but Opposition May Seek to Nitpick

Budget 2024 Signals Fiscal Reforms, but Opposition May Seek to Nitpick

Analysts have commended Prime Minister Datuk Seri Anwar Ibrahim’s presentation of Budget 2024 on October 13, highlighting the government’s commitment to fiscal reforms. However, they caution that the Opposition might seize opportunities to raise concerns for their own political agenda. Wong Chin Huat, a political scientist at Sunway University, praised the budget for its clear direction and purpose, emphasizing the absence of an imminent election or a significant threat to the government’s stability.

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He noted that Budget 2024 indicates the government’s incremental push for fiscal reforms, with a key highlight being the reduction of the budget deficit as a percentage of gross domestic product (GDP). The Finance Ministry has set a target of achieving a 3.5% deficit-to-GDP ratio by 2025, down from an estimated 5% this year and a projected 4.5% next year. This move is expected to boost market confidence, given the government’s stable majority in parliament.

Wong explained that the Opposition’s limited influence, lack of a recognized shadow Cabinet, and limited resources for alternative proposals make it unlikely for them to significantly impact the budget’s passage. Instead, they may resort to nitpicking without providing substantial alternatives.

The government has also taken steps to minimize hardships for its support base, with measures such as targeted subsidies for diesel while excluding RON95 fuel and a selective increase in the Sales and Service Tax, exempting common food and beverage items and telecommunications. These adjustments aim to protect the income groups and signal the government’s intent for change.

However, Wong pointed out that the budget’s ability to satisfy a broader segment of society depends on external factors beyond the government’s control, such as inflation and food security, influenced by international events, including the conflict in Gaza. He also emphasized that the budget is designed to maintain coalition stability, avoiding potential disruptions within the coalition government.