What you need to know before Malaysia announces Budget 2021

Zafrul Aziz speaking to people in his office on Monday, surrounded by graphics of RM100 and RM50.  Photo: Coconuts
Zafrul Aziz speaking to people in his office on Monday, surrounded by graphics of RM100 and RM50. Photo: Coconuts

Malaysia will table its budget for next year at 4pm in Parliament today and many of us are expecting the government to dole out more money despite the country already being in debt

Finance Minister Zafrul Aziz, 47, will deliver the budget statement on behalf of Prime Minister Muhyiddin Yassin’s administration. That will be the sole agenda of today’s Parliament session as meetings have been shortened throughout this week after a political aide who had come into contact with some MPs contracted COVID-19. 

Only 80 members of Parliament – 41 from the government and 39 from the opposition – will be allowed into the house later today. MPs have up until Dec. 15 to debate the budget. 

Here’s everything else that you need to know before Zafrul announces Muhyiddin’s maiden budget plans for Malaysia. 

More spending

Despite already accumulating RM823 billion (nearly US$200 billion) in debt and setting aside RM35 billion worth of COVID-19 financial aids earlier this year, Zafrul is expected to announce more spending for 2021. 

He already hinted on this when speaking to the press on Wednesday on how the government would “go against economic theories” by spending more when it is barely making revenue. Malaysia was forecasted to bring in only RM285 billion in revenue by December, according to the International Monetary Fund last year. 

Not surprisingly, the reason given for increased spending was that it was for the people. 

“In theory, if you have less money, you should spend less,” Zafrul was quoted as saying. “Since we are in a crisis, namely economic crisis and health crisis, we need to spend although our income is less.”

“If we do not spend more, especially under this budget, the crisis will become more severe and the people will suffer more.”

The 2021 budget is expected to mainly be channeled into welfare, economic stability and growth, and enhancing public services, he said, adding that it was expected to cost the government RM305 billion, which is more than the total RM297 billion spent on last year’s budget.

What others want from the budget

Lawmakers on Muhyiddin’s side have largely shown support for the 2021 budget, including those from The National Front party, which former prime minister Najib Razak is a part of. 

Opposition lawmaker Lim Guan Eng, however, has said that he would reject the budget if it did not include his six proposed ideas, which include increasing the Health Ministry’s resources to deal with COVID-19 and increasing monthly financial aid for the vulnerable from RM350 to RM1,000 per person.

“If any of the key six measures proposed by PH are rejected, then there will be no budget that can work to benefit the nation, our national economy and the people,” Lim said on Monday. He is part of the Pakatan Harapan coalition and last year delivered the budget statement for Malaysia during Mahathir Mohamad’s rule. 

Meanwhile, ensuring nutritious foods for children from lower income families, building shelters for domestic violence victims, and providing better security for lonely elderlies were major concerns for the women’s wing of the People’s Justice Party in the opposition. Syed Saddiq’s MUDA millennial party has recommended tax exemptions for employers to boost hiring of fresh graduates, among others. 

“Wanita KEADILAN urges that the demands be scrutinized by the Minister of Finance seriously,” Chief Fuziah Salleh told Coconuts Monday.

“We propose tax exemptions for businesses and employers that hire locals and fresh graduates,” a statement by the MUDA party read.

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