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Friday, October 25, 2013

Budget 2014: Najib hints at unpopular measures

FMT Staff | October 24, 2013
He says the government must fulfil its pledges to the people, and avoid populist measures that undermine economic stability.

KUALA LUMPUR: Prime Minister Najib Tun Razak today said that the Malaysian economy must remain resilient, in order to lay the foundations for future growth and prosperity.

Speaking ahead of his Budget which will be presented tomorrow, Najib underscored the importance of continuing with the government’s transformation agenda.

He added that the government must fulfil its pledges to the people, and avoid populist measures that undermine economic stability.

Noting the recent global financial crisis and Eurozone crisis, the prime minister said that a robust economy helps safeguard Malaysia’s future.

“We cannot control what happens abroad, but we can work to strengthen the domestic resilience of our economy,” he said in a statement issued by his office.

“The government will do what is right for our economy. Some measures may not be popular now, but over the medium term what is good for the economy is also good for the people,” he said.

Najib in his budget tomorrow is expected to rationalise subsides further which will result in a hike in fuel prices and several other items.

Managing subsidies

On Tuesday, he said in his 1Malaysia blog that he would have to take responsible steps in managing subsidies, suggesting that he was in favour of cutting subsidies, which will result in price hikes.

“I believe it is important for us to rationalise a few current subsidies to hover the global economy of today, including fuel subsidy,” Najib has said in his blog entry.

“I believe we must take long term measures to reduce dependence on government subsidies now, in order not to burden our future generation,” he had added, further urging the people to accept the subsidy rationalisation with open heart.

Najib had stressed that Malaysia could not take irresponsible fiscal steps by continuing to dish out RM10 to RM20 billion from the country’s finances for fuel subsidy.

On the contrary this money can be channeled towards more important sectors like education and infrastructure enhancement.

He also promised that the government will implement steps gradually and all price controlled goods and services will be monitored to avoid irresponsible parties exploiting the situation.

“I hope these necessary steps will be received well with an open heart by all parties and cooperate towards our objectives to become a high income nation,” said Najib.

He is also likely to announce the implementation of the Goods and Services Tax (GST) which is largely seen as a way for the government to increase its revenue. It detractors however say this new tax scheme in unfair to the poor and low income earners.

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