What should Budget 2023 focus on?

KUALA LUMPUR: The federal budget, which was originally scheduled to be tabled on October 28, has been brought forward three weeks to October 7.

Malaysia’s economy recorded strong growth of 6.9 per cent in the second quarter of the year, with Bank Negara Malaysia projecting it to expand further for the remainder of the year.

According to Prime Minister Datuk Seri Ismail Sabri Yaakob, among the main focuses for Budget 2023 is to ensure post-COVID-19 recovery.

This, said Ismail, will include increasing income, creating jobs and ensuring the survival of businesses.

"In facing global uncertainties, the Budget will also focus on the people by improving protection systems and boosting the wellbeing of the people through quality healthcare and education,” he said.

What challenges can Malaysia expect in 2023?

Despite positive growth, the country remains susceptible to various ongoing global pressures, says a think tank.

Research Director of Bait Al Amanah, Benedict Weerasena, noted that this includes geopolitical tensions such as the Russia-Ukraine conflict and US-China tensions over Taiwan.

On top of this is the growing danger of global stagflation as advanced economies are experiencing high unemployment rates and rising inflation.

“We are also looking at prolonged global uncertainty in terms of supply chain commodity and food prices.

“This leads to a lot of pessimism in the global economy and Malaysia, being an open economy, is definitely not shielded from what’s happening on a global scale,” he said.

Another factor to look out for, said Benedict, would be stumbling growth in China as the country continues to pursue its zero-COVID policy.

“We understand China has been Malaysia’s largest trading partner for 13 consecutive years. Whatever happens in China domestically will definitely affect us.”

Spotlight: Vulnerable groups, economic freedom

The upcoming federal budget should focus on assisting all sections of the community, including vulnerable groups and non-citizens, says Benedict.

“We have so many budgets that really prioritise Malaysian citizens time and time again. That seems to give the best political mileage to the government, especially with the B40 groups.

“But the stateless community, migrants and refugees will still be with us.”

He said it was important for policymakers to ensure no one was being left out in Budget 2023, adding these vulnerable groups were still “part and parcel of Malaysian society”.

Another group to focus on would be the older population as Malaysia heads towards becoming an ageing nation by 2030.

Benedict suggested for the government to consider policies to delay the retirement age or encourage employers to hire seniors even after retirement.

He also pointed out that two years of the COVID-19 pandemic has caused many women to leave the labour market to care for their families.

Thus, Budget 2023 should look into increasing access to quality and affordable childcare to enable women to return to the workforce, he said.

Beyond target groups, Benedict called for the nation to promote economic freedom, in which the government avoids interfering with the market process.

“We saw that this year when it came to food security and rising food prices. There were quite a few measures from the government, such as banning exports and price ceilings, which is detrimental to how the market works.

“All in all, Malaysia needs to pursue economic openness instead of economic protectionism. We need to promote a business-friendly attitude instead of interfering in every problem that arises.”