Latest news with #FiscalResponsibilityAct
Daily Express
07-08-2025
- Business
- Daily Express
Understanding fiscal responsibility
Published on: Thursday, August 07, 2025 Published on: Thu, Aug 07, 2025 By: David Thien Text Size: Fraziali said there was a series of subsidies removal from eggs, chicken to diesel. Energy, water, the big one remaining will be Ron95. Kota Kinabalu: Sabahans may not be aware what Bank Negara Malaysia Assistant Governor Tuan Fraziali Ismail described at a recent Rotary Club of Kota Kinabalu dinner event, as the 'Fiscal Responsibility Act'. It is actually known as the Public Finance and Fiscal Responsibility Bill focussing on the Government's policies and strategies to ensure responsibility and transparency in the country's fiscal and economic policies for the people's wellbeing. Advertisement 'The Government needs money. The Government doesn't have much money. 'Malaysia is one of the countries where the income tax revenue collection in proportion to the GDP is one of the lowest. GST in the past got rescinded. Subscribe or LOG IN to access this article. Support Independant Journalism Subscribe to Daily Express Malaysia Access to DE E-Paper Access to DE E-Paper Exclusive News Exclusive News Invites to special events Invites to special events Giveaways & Rewards 1-Year Most Popular (Income Tax Deductible) Explore Plans Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
The Star
30-07-2025
- Business
- The Star
13MP likely to prioritise development expenditure
PETALING JAYA: Development expenditure is expected to remain a key pillar of the government's strategy in the 13th Malaysia Plan (13MP), with allocations projected to hover around RM80bil annually over the next five years as Malaysia prioritises infrastructure, socio-economic development and domestic growth. MBSB Research said the projected allocation would maintain the government's contribution in supporting investment and business activities. 'We expect development may be maintained around RM80bil a year, maintaining the government's contribution in supporting investment and business activities,' the brokerage noted. Based on the Fiscal Responsibility Act (FRA) provision for a minimum of 3% of gross domestic product (GDP) for development expenditure, MBSB Research estimated the government would at least provide around RM73bil annually. 'This can be utilised to support multi-year infrastructure projects such as, among others, the mass rapid transit three and other railway projects (such as the East Coast Rail Link and Penang light rail transit), highway constructions and expansions (such as in Johor, Penang, Sabah and Sarawak), and airport expansions (such as in Miri),' it said. The brokerage said the development expenditure allocations of RM80bil per year is estimated to contribute around 3.3% of GDP in the next five years. 'We argue against a strict tightening in government spending, while it is positive in improving the fiscal position, which would constrain the broader economic growth,' it said. To balance fiscal discipline with growth objectives, MBSB Research expects greater participation from the private sector. 'We expect there will be continued adoption of public-private partnership (PPP) which can help to reduce the fiscal burden in driving domestic investment. In addition, national investment can be supported by greater investments by the private sector, be it from domestic and foreign companies,' it said, adding that attracting foreign direct investment remains crucial to securing Malaysia's role in the global supply chain. MBSB Research said it expects the government to reiterate in 13MP its commitment towards improving the overall fiscal space by reducing the fiscal deficit to minus 3% of GDP, which is another target set under the FRA2023. 'At this point, we estimate the decline in fiscal deficit towards minus 3.8% of GDP this year looks challenging given the uncertainties on the external front and renewed global trade tensions (triggered by the US tariff hikes). 'Nevertheless, there is a higher chance that the minus 3% GDP target can still be met within the next five years,' it said. However, limiting debt growth remains a challenge. 'The government recently announced that the outstanding government debts reached RM1.3 trillion as of June 2025 (end-2024: RM1.25 trillion), which we estimate will keep the government debt-to-GDP ratio around 65% of GDP this year (2024: 64.6%). 'This suggests the government needs to do more in lowering the ratio to not more than 60% of GDP in the medium term, adhering to the debt limit as set under the FRA2023,' MBSB Research said. On growth, the brokerage projected the economy to expand between 4% and 5% annually in the next five years. 'We expect 13MP development plans will support more sustainable growth of above 4%,' it said. The continued progress in infrastructure projects, a healthy labour market and government initiatives to address structural labour market issues are expected to sustain household spending and investment. MBSB Research highlighted the growing role of private consumption, which now accounts for more than 60% of GDP compared with 45% in 2005-2006. 'While we expect it will be more demanding to keep Malaysia's economic growth to be sustainably above 4%, successful implementation of the 13MP development plans, including catalysts such as the Johor-Singapore Special Economic Zone, could support growth at the upper end of our estimated growth target of 4% to 5% in 2026-2030,' it said. The research house expects the 13MP to be framed around three dimensions: quality and sustainable living, high and equitable income and a sustainable environment. 'Greater confidence by enjoying higher income and improved livelihood will translate into increased domestic spending, especially when there is less concerns about the safety net even after retirement,' it said.
![Malaysia on track to cut debt-to-GDP to 60pct [BTTV]](/_next/image?url=https%3A%2F%2Fassets.nst.com.my%2Fassets%2FNST-Logo%402x.png%3Fid%3Db37a17055cb1ffea01f5&w=48&q=75){kind=small}
New Straits Times
24-07-2025
- Business
- New Straits Times
Malaysia on track to cut debt-to-GDP to 60pct [BTTV]
KUALA LUMPUR: Malaysia is on track to reduce its debt-to-GDP ratio to 60 per cent over the medium term, backed by disciplined fiscal management and lower annual borrowings. Treasury secretary-general Datuk Johan Mahmood Merican said the country's fiscal consolidation efforts are bearing fruit, with the budget deficit narrowing from 5.5 per cent of gross domestic product (GDP) in 2022 to 4.1 per cent last year and further targeted to reach 3.8 per cent in 2025. Concurrently, annual new borrowings have declined significantly, from RM99 billion in 2022 to RM77 billion in 2024, reflecting the government's commitment to long-term fiscal sustainability, Johan said in an interview with TV3. "This shows that each year, the level of new debt is being lowered. This is consistent with the government's target to reduce the national debt level to 60 per cent of GDP. "Currently, it stands at around 64 per cent, but the reduction in annual deficit and new borrowings will support the achievement of the 60 per cent target. "So far, the government is on track, and what has been implemented is aligned with what was targeted under the fiscal responsibility legislation," he said. He said certain parties may attempt to distort the narrative around the government's financial management, but international bodies such as the International Monetary Fund have acknowledged Malaysia's commitment to fiscal reforms, particularly through the implementation of the Fiscal Responsibility Act. Prime Minister Anwar Ibrahim said the government has successfully lowered annual new borrowings, marking progress toward its commitment to more responsible fiscal management with only interest payments on existing debt yet to be reduced. He said the decline in new debt aligns with the government's efforts to narrow the fiscal deficit, adding that the administration remains committed to reducing the deficit gradually and responsibly, without disrupting national development. Anwar, who also serves as finance minister, said the government has deliberately taken a phased approach to ensure that deficit reduction does not compromise development priorities or undermine investor confidence. Progressive tax reform protects rakyat. Johan said the government's expansion of the Sales and Services Tax (SST) was part of a progressive and targeted tax approach, one designed to avoid overburdening the rakyat and support sustainable growth. "If we were to reintroduce the Goods and Services Tax (GST) using the same parameters as SST, it would generate more than double the tax revenue. But this could be too heavy a burden on the economy," he said. Instead, Johan said SST is structured to exempt essential items such as basic food and focus taxation on non-essential or premium goods. "For example, service tax is applied to industrial buildings but not to residential homes. This ensures that those with higher purchasing power contribute more," he shared. He added that additional revenue collected would go towards improving core public services. In 2025, welfare assistance under Sumbangan Tunai Rahmah (STR) will increase from RM10 billion to RM13 billion. Meanwhile, allocations for education and healthcare have also been raised. The Education Ministry will receive RM74 billion, up from RM59 billion, and the Health Ministry RM45 billion, up from RM41 billion. "These funds will be used to repair schools and clinics, fix road conditions, and upgrade basic infrastructure, ensuring the rakyat enjoys better quality of life through responsible and equitable fiscal measures," Johan said.
New Straits Times
23-07-2025
- Business
- New Straits Times
Malaysia on track to cut debt-to-GDP to 60pct
KUALA LUMPUR: Malaysia is on track to reduce its debt-to-GDP ratio to 60 per cent over the medium term, backed by disciplined fiscal management and lower annual borrowings. Treasury secretary-general Datuk Johan Mahmood Merican said the country's fiscal consolidation efforts are bearing fruit, with the budget deficit narrowing from 5.5 per cent of gross domestic product (GDP) in 2022 to 4.1 per cent last year and further targeted to reach 3.8 per cent in 2025. Concurrently, annual new borrowings have declined significantly, from RM99 billion in 2022 to RM77 billion in 2024, reflecting the government's commitment to long-term fiscal sustainability, Johan said in an interview with TV3. "This shows that each year, the level of new debt is being lowered. This is consistent with the government's target to reduce the national debt level to 60 per cent of GDP. "Currently, it stands at around 64 per cent, but the reduction in annual deficit and new borrowings will support the achievement of the 60 per cent target. "So far, the government is on track, and what has been implemented is aligned with what was targeted under the fiscal responsibility legislation," he said. He said certain parties may attempt to distort the narrative around the government's financial management, but international bodies such as the International Monetary Fund have acknowledged Malaysia's commitment to fiscal reforms, particularly through the implementation of the Fiscal Responsibility Act. Prime Minister Anwar Ibrahim said the government has successfully lowered annual new borrowings, marking progress toward its commitment to more responsible fiscal management with only interest payments on existing debt yet to be reduced. He said the decline in new debt aligns with the government's efforts to narrow the fiscal deficit, adding that the administration remains committed to reducing the deficit gradually and responsibly, without disrupting national development. Anwar, who also serves as finance minister, said the government has deliberately taken a phased approach to ensure that deficit reduction does not compromise development priorities or undermine investor confidence. Progressive tax reform protects rakyat. Johan said the government's expansion of the Sales and Services Tax (SST) was part of a progressive and targeted tax approach, one designed to avoid overburdening the rakyat and support sustainable growth. "If we were to reintroduce the Goods and Services Tax (GST) using the same parameters as SST, it would generate more than double the tax revenue. But this could be too heavy a burden on the economy," he said. Instead, Johan said SST is structured to exempt essential items such as basic food and focus taxation on non-essential or premium goods. "For example, service tax is applied to industrial buildings but not to residential homes. This ensures that those with higher purchasing power contribute more," he shared. He added that additional revenue collected would go towards improving core public services. In 2025, welfare assistance under Sumbangan Tunai Rahmah (STR) will increase from RM10 billion to RM13 billion. Meanwhile, allocations for education and healthcare have also been raised. The Education Ministry will receive RM74 billion, up from RM59 billion, and the Health Ministry RM45 billion, up from RM41 billion. "These funds will be used to repair schools and clinics, fix road conditions, and upgrade basic infrastructure, ensuring the rakyat enjoys better quality of life through responsible and equitable fiscal measures," Johan said.
NZ Herald
02-07-2025
- Politics
- NZ Herald
Fiji's path to equality offers lessons for New Zealand's race debate
Fiji has since taken steps New Zealand should study. Its 2013 Constitution abolished the race-based electoral system. All citizens, regardless of ancestry, are now called 'Fijians'. In 2022, there was a peaceful transfer of power. Fiji now has a multi-racial Government, something once thought impossible. Fiji still faces challenges. There's a meth epidemic. But the political consensus is clear: the way to govern a multi-ethnic country is for all citizens to be equal before the law. Meanwhile, in New Zealand, a Parliamentary select committee is considering the Regulatory Standards Bill. The reaction has been hysterical. Both supporters and critics exaggerate its effects. The bill is modest. It simply promotes better law-making by requiring transparency and clarity. Its principles are recommendations that are not binding. The courts can't enforce them. A future government can ignore it, just as governments ignore the Fiscal Responsibility Act's requirement for balanced budgets. So why the fury? The critics are not just wrong, they are revealing. Tobacco companies can't sue under the bill. The claim by the Waitangi Tribunal that Māori weren't consulted is refuted by the number of Māori who have made submissions. The claim that it erases the Treaty of Waitangi is absurd. If a Regulatory Standards Act had been in place, many breaches of Māori Treaty rights might not have occurred. A lawyer at Tāmaki Legal articulated the real reason the critics oppose the bill: one of its principles is that 'all citizens are equal'. That, apparently, is the problem. There's nothing in the bill that prevents governments from promoting equality, or Māori language and culture. One of New Zealand's endearing features is that anyone can claim to be Māori. I have sat on select committees where witnesses, blue-eyed, fair-skinned with no te reo, have not only claimed to be Māori but to speak for Māori. No MP questioned their claim. I recall one eccentric MP declared that she felt Māori. Despite having no Māori ancestry, she was admitted to her party's Māori caucus. The Treaty of Waitangi, Article Three, grants Māori the rights of British subjects. In 1840, that meant equality before the law, the same as every other citizen, regardless of birth. If we are equal who cares what race we claim to be? Once we claim our ancestry entitles us to extra rights then who we are becomes important. Recently, in Parliament, Winston Peters was heckled by Te Pāti Māori MP, Tukau Ferris. Peters fired back asking, 'What is the majority of your DNA?'. Te Pāti Māori MPs were claiming that being Māori meant they did not have to observe Parliament's protocols. If the tribunal is correct that Māori have extra rights, it raises Peters' obvious question: Who is a Māori? That question is politically toxic. It is considered the height of rudeness in New Zealand to ask someone to justify their claim to be Māori. But if it comes with superior rights, it's a necessary question. With apologies to David Seymour but it is his bill, is he Māori? He is 1/64th Māori. He is entitled to be on the Māori roll. Are those who are 1/64th Māori one of the Māori the tribunal says should have been consulted. If so, why? If not, why not? It is a question that the tribunal has yet to answer. We will regret the passing of the unspoken rule: say you're Māori, and you are, no proof required. Fiji confronted the question head-on. Only those classified as indigenous Fijians were eligible to vote for the Fijian communal seats. If that standard applied in New Zealand, there would be no Māori electorates and few Māori for the tribunal to consult. This is where we're heading, down a road where the state defines and divides us by race, then treats us unequally. Fiji has already been down that road. It didn't end well. Fiji has also shown us the way back. Fiji's new constitution says every citizen is Fijian. Full stop. No exceptions, no privileges. I used to think the Regulatory Standards Bill was a helpful but modest reform. After reading the critics, I've changed my mind. It's not just helpful. The bill is essential.
