KUALA LUMPUR, Feb 1 — The recalibrated Budget 2016 announced by Prime Minister Datuk Seri Najib Tun Razak last week is a proactive and transparent move.
Mohd Hassan Ahmad, Section Head, Fiscal and Economics Division, Finance Ministry, said with the uncertain global economy coupled with falling oil prices, the government was transparent in announcing to the rakyat what is happening currently and the meaures taken to ensure the economy continues to expand.
Speaking during an interview with RTM1 for ‘Selamat Pagi Malaysia’ programme, he explained that Malaysia was not in a crisis or recession but the proactive measures were needed to sustain the country’s economic growth.
“Our economy is still growing at 4.0 to 4.5 per cent. The government is ensuring the growth countinues to be strong. Personally, for me, we are preparing for any untoward circumstances,” he said.
The government and Finance Ministry were always monitoring the economic position and would make revisions according to the needs.
“(If we look) these challenges are out of our control. Malaysia is a small trading country and depends on outside developments. Because of this, the government will ensure domestic activities need to be stimulated,” he said.
Similarly, if oil prices recovered to over US$40 a barrel, the country would have more revenue which would be ploughed back for the wellbeing of the rakyat, said Hassan.
He also explained that unpopulist measures, such as reducing expenditure for the ministry did not mean cutting the ministry’s existing activities, but the scale of operating expenditure and leakages was reduced to achieve efficiency without affecting the public delivery system.
The Finance Ministry, he added, had discussed with all the ministries before taking the approach and the reduction, which was two per cent to five per cent on average, would not affect the salaries and allowances of civil servants.
On the reduction of Employees Provident Fund contribution, Hassan said it was on a voluntary basis to ease the burden of the rakyat.
“Even though (this is) taking savings for the future, this choice is crucial for those who need to buy important things such as baby milk. The period given is until Dec 31, 2017, after that the contribution is automatically back to 11 per cent. Besides that, depositors have a choice to maintain or cut by 3.0 per cent,” he said.
He further added that the employees and employers’ contribution now is about 23 per cent, and if this was reduced by three per cent, it was still at a sustainable level, that is, 20 per cent.
In the interview, Hassan also stated that the government had also urged government-linked companies to close the income gap between the management and workers, while increasing productivity.