Friday, August 29, 2008

DAP Budget Brief 2009

The Government's 2009 Budget is being tabled in a couple of minutes, and I'm ploughing through the reports which include the Auditor-General's reports, which are approximately 3 feet tall i.e., not much leg-room now.

A few days ago, DAP released its budget brief for 2009, on how we expect to deliever our budget should we be in government. It's adapted from our complete 2008 budget delivered last year as most of the policies have not been adopted by the Government and are still relevant.

You can download the budget brief (10 pages) or you can download the complete version for last year for a more detailed understanding of the party's economic policies (60 pages). Or you can also read The Star's report yesterday on DAP's CAT Budget.

In summary, we are anticipating a small increase in government revenue of approximately 3%, largely driven by oil and gas revenues but limited by a decline in corporate taxes to RM154.5 billion. However, we intend to maintain budget expenditure to RM177 billion as per the Government's budget 2008.

However, the allocations for operational and development expenditure will be restructured to increase the efficiency and effectiveness of government expenditure. Operational expenditure will be reduced from RM129 billion to RM120 billion or a 7% reduction. On the other hand, development expenditure will be increased from RM48 billion to RM57 billion or an increase of 19%.

Reductions in the government operating expenditure which has ballooned by more than 43% since 2005 will be achieved through strict enforcement via the policy of competency, accountability and transparency. The effects of such policies will create greater expenditure savings over the next few years.

Savings from reductions in operating expenditure will instead be channelled towards development expenditure which will have a greater economic multiplier impact. The major beneficiaries of the increase in development expenditure in the DAP Budget 2009 will be the education, transportation and health sectors.

As a result of financial prudence, increasing the effective utilisation of the Government's revenue, the Government will be able to reduce its budget deficit from its estimated 3.1% in 2008 to 1.4% in 2009, without compromising its ability to pump-prime the economy in a weak global economic environment.

The 14 key measures to lift our economy proposed are:
  1. Protecting Oil Revenues
  2. Investing in Education
  3. Creating an Efficient Transportation System
  4. Renegotiating Unfair Contracts
  5. Implementing FairWage and Malaysia Bonus Scheme
  6. Open, Competitive & Transparent Tenders
  7. Open, Competitive & Transparent Auctions
  8. Seeding Creativity & Innovation
  9. Revitalising Malaysian SMEs
  10. Restructuring Personal Income Taxes
  11. Introducing Green Taxes
  12. Increasing Women Workforce Participation
  13. Reviving the ICT Sector
  14. Participation from the Civil Society
As mentioned earlier, details on these policies and others are available from our 2009 Budget Brief as well as our 2008 Budget.
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