DAP regrets at the missed opportunity for a unity budget presented by the Federal Government yesterday that does not fulfil the 6 key recommendations by Pakatan Harapan with unrealistic projections, financial half measures and political handouts where the 8.6% increase in 2021 Budget is not shared by all segments of Malaysian society. DAP is particularly disappointed that there is no automatic extension of the bank loan moratorium up to M40 group. This would mean that hire purchase and housing loan borrowers will have to pay their interest and compounded interest respectively from October this year.
We live in unprecedented times of the triple crisis of a global COVID-19 health pandemic, economic crisis with record unemployment and recession, and a political crisis where the present Perikatan Nasional government has lost its parliamentary majority. However, the Budget 2021 is very much “business as usual” without addressing the triple crisis especially fighting Covid-19 health crisis and the once-in-a-century economic crisis.
In such dire times instead of responding to calls for a “Unity Budget”, the RM 85.5 million allocation given to Jabatan Hal Ehwal Khas (JASA) has angered Malaysians. Should not the RM85.5 million be spent on dilapidated schools which was only given RM58 million or child care facilities for frontliners(RM30 million). During the Barisan Nasional rule, JASA was given around RM 20 million per annum while Pakatan Harapan abolished the agency altogether. In a normal democracy, there is no place for such propaganda agency that uses public funds to spread lies and fake news.
Parliamentary rules provides for the Finance Minister to represent the Government to amend the Budget proposals. DAP calls on the Prime Minister and the Government to commit publicly immediately to withdraw the allocation to JASA if the Government is sincere in seeking a Unity Budget.
The projected budget deficit for 2020 increased from the original estimated 3.2% of GDP to 6.0% of GDP or RM86.45 billion. We believe that the Finance Ministry can achieve the 6% deficit this year but doubts that the projected 5.4% budget deficit for 2021 is realistic in view of declining trade and GDP growth globally following the latest wave of COVID-19 infections. Further, commencing fiscal consolidation by 2021 is too early and 5.4 % GDP deficit for next year is too low to achieve the goal of economy recovery and help distressed Malaysians and companies.
The government should boldly spend and invest in what is necessary to overcome this COVID 19 crisis, by at least allowing an additional 4% deficit of GDP in 2021 on top of the projected 5.4%. These GDP figures were calculated on the basis of the economy contracting by 4.5% in 2020 and growing at 6.5% to 7.5% in 2021, which is overly optimistic. The amount allocated to the COVID 19 fund should go beyond the RM17 billion that has been allocated in the 2021 budget, far below the RM38 billion this year.(see graph).
DAP is against the massive cuts to the non-Covid part of the health budget. Ministry of Health budget has been reduced by 20.5 percent from RM 14.2 billion in 2020 to RM11.3 billion in 2021, including a 74-percent decrease for pharmacy and supplies. In time of economic crisis when most Malaysians would look to government health services for help as many would not be able to afford private healthcare, the cuts are shocking and cruel. Amidst the Covid-19 health crisis, the need to ensure Malaysians’ health are well taken care off is especially crucial.
DAP calls on the Government to commit to an additional 4% deficit spending for 2021, calculated on a more realistic GDP figures. Direct cash payments to families and individuals in the B40 and M40 categories as well as the continuation of the Workers’ Subsidy Program (WSP) should be widened to include genuine unemployed workers. As such, we ask for greater expenditure to help families and SMEs to get back on their feet in 2021.
We take note of some of the measures announced in Budget 2021 which are consistent with the 6 demands that PH presented to the Minister of Finance during our budget consultation session on the 1st of November 2020. This includes additional resources in the fight against COVID 19, additional investments in broadband and internet services to schools and additional financial assistance to SMEs in Sabah.
However many gaps remain, that did not meet the 6 recommendations by Pakatan Harapan. In particular, the automatic extension of bank loan moratorium(excluding the top 20 income earners) costing RM6.4 billion and benefiting 8 million Malaysians and companies with a value of RM100 billion, creating 600,000 jobs with wage and hiring incentives for employees and employers costing RM13 billion, and increasing monthly welfare payments to RM1,000(including unemployed) costing RM12 billion. This is disappointing.
If the Government is serious about passing a Unity Budget, further discussion must be held with the Opposition parties and backbenchers on alternative proposals and amendments to the Budget 2021 from now to 25th November when a vote at the Policy Stage would take place in Parliament. Only a Unity Budget with the right kind of assistance and support to ordinary Malaysians and Malaysian companies, can succeed in overcoming the triple crisis of political instability, the COVID-19 health and economic crises as well as allow us to invest and reinvest in our future.