Najib Razak seeks to win with new budget including ‘handouts and tax cuts’

Malaysia’s prime minister Friday announced handouts and tax cuts in his last budget before elections, hoping to persuade voters to put aside a massive financial scandal and re-elect his long-ruling coalition.

Najib Razak sought in the 2018 spending plans to assuage concerns among Malaysians worried about rising living costs due to the introduction of a wide-ranging consumption tax, expensive housing and growing household debt.

He pointed to improvements in the trade- and energy-dependent economy, which has bounced back after being battered by a fall in oil prices, saying it will clock up growth of between 5.0 and 5.5 percent next year.

The premier has been battling allegations that billions of dollars were looted from a state investment fund he founded, 1MDB, and the budget is key to his efforts to get voters to swing behind his party ahead of a general election that must be called by August.

Both Najib and the fund deny any wrongdoing.

As well as the financial scandal, Najib faces a resurgent opposition under former premier Mahathir Mohamad, who dominated Malaysian politics for over two decades and was once his mentor.

Unveiling the 280.25 billion ringgit ($66.1 billion) budget, Najib — who is also finance minister — said his Barisan Nasional coalition was committed to scoring a “big victory” at the forthcoming polls.

The budget included tax cuts for the middle class, cash handouts of 1,500 ringgit for all civil servants — mostly from the Muslim Malay majority and a key vote bank for Najib’s party — as well as for newborns and farmers.

Towards the end of his budget speech, opposition lawmakers erupted in shouts of “kleptocracy”.

Najib’s United Malays National Organisation party, which leads the coalition, has been in power continuously since Malaysia became independent from Britain in 1957, but faces a tough challenge to hang on to power in the multi-ethnic country.

Kenanga Investment Bank economist Wan Suhaimie bin Wan Mohd Saidie told AFP that the 2018 budget was “undeniably” one designed to win more votes.

“As long as the economy remains good, and there are no major controversial issues popping up, it will be enough for the powers that be to gain broader support.”