Another report grumbled that it was not hard-hitting enough and that more should have been done to address the current account deficit.
It is really a no win situation. Without doubt most people, including Malaysians, have expected the Budget to be a tougher one but a “slash and burn'' approach would not have helped.
The aim of the Budget is to restore confidence and, hopefully, to bring back the good times for Malaysians. It is a good mix of measures, aim at cutting away the fats. It is supposed to be a cure, not a burial.
The signal is Malaysians will be thrifty and we will be careful in our spending. Known for his habit of introducing new Bahasa Malaysia words, sometimes tongue-twisting ones, in his Budget speeches, Anwar decided to stick to plain language this time.There were no frills and certainly no need to attach a glossary to his speech to explain the use of certain words.
His message was clear: The time has come for Malaysians to exercise prudence.
The Budget, he said, might not be well received by everyone because it did not contain any “goodies'' and some segments of society might even feel bitter about strong measures to control the growth in credit and imports. “Consider what is bitter as medicine,'' he said.Though tough measures had been predicted, the Budget can be described as a “right dosage''.
The bright points include a cut in the corporate tax which will help companies reeling from the shock of the stock market losses and a reduction in petroleum tax. Foreign investors,analysts and the media got to hear what they wanted measures to curb the deficit such as corporate tax exemption for exporters, lower duties on crude oil exports, higher duties on imports of heavy machinery, consumer durables, construction materials and cars.
The ordinary travellers who use up only a few pages of their passports will feel the pinch of the sharp increase in fees for international and restricted passports, aimed at reducing the number of Malaysians travelling abroad.
An introduction in exit tax for Malaysians would, perhaps, be more appropriate since the target should be the frequent travellers.
For the many Proton-driving Malaysians, they will welcome the hike in import duty on completely built up and completely knocked down vehicles as it will control excessive credit and discourage spending.
Malaysians now no longer see the car as a mere form of transport but a status symbol to flaunt their new found wealth. However,for Sabahans and Sarawakians, who need to use four-wheel drive vehicles for real reasons, the new tax will be a hard pinch.One surprise omission is the imposition of “sin tax''" on cigarettes, liquor and gaming.
On the part of the Government,Anwar came out clearly with a list of mega projects, worth RM66bil,which had been deferred.
The annual economic report accompanying the Budget forecasts gross domestic product growing by 7% next year, down from an estimated 8% this year and 8.6% last year.
It maybe a damper for Malaysians used to high growth rates for many years but many countries,including those in the West with massive unemployment, would never dream of such growth rate.
“It's like driving a Mercedes Benz for years and now we have to drive a Proton Perdana.It's still a good car but we just have to get used to it,'' said one businessman.
“And as you drive your Proton, to cut down cost, you are criticised by some outsider who cannot even afford a car in his country. That about sums up our economy.''
For the business sector, there should not be any reason to be too unhappy, considering the Budget incentives.All this while, businessmen have been having it so good because of a pro-business and strong political leadership.Through privatisation,some have become super rich, enjoying the kind of prominence and status they will never get elsewhere.
Now that some money was lost in the stock market and currency attacks, they should stand by the leadership.They should not forget where they were ten years back. Some were bankrupts and some had no records to show, let alone shout about. A few have become rich simply because they seem to have the right political connections. But the years of wealth have made some arrogant and a little too sensitive.
Now that the Budget has been tabled, Malaysians from all walks of life should wake up with a clear head and set their priorities right that is to restore the country's economy.
