Prime Minister Dato Seri Abdullah Ahmad Badawi tabled the 2009 Budget much earlier this year as compared to previous years due to the upcoming Ramadhan (fasting) month and Hari Raya festival in September and October 2009 respectively.
The petrol price hike a couple of months ago have resulted in inflationary pressure on consumer goods resulting in increase in price of goods and services thus reducing the disposal income of the man in the street. Consumers from all walks of life faced difficulties as consumer spending have been curtailed putting less money in the pocket.
As such it is important to look at whether the Budget 2009 did address the bread and butter issues such as increasing the disposal income (putting more money in the pocket of people to raise consumer spending) in time of economic uncertainties. To further spiral the slowdown in economy, boosting consumer spending will create a multiplier effect to enhance the economy. A responsible govt will look at this approach at addressing the economic concerns.
Lets now look at the major components of the Budget 2009 proposals:
The increase in the tax rebate for the income bracket RM35ooo and below from RM350 to RM450 will result in some 100,000 taxpayers from paying tax. This will result in increase in disposal income which can boost consumer spending and can mitigate the increase in petrol prices.
Announcement of a one month bonus or a minimum of RM1000 to be paid in two instalments in September and December 2009. This will definitely assist those celebrating Hariraya festivals as they are able to use thsi instalments for purchase of hariraya items an the December instalments will assist parents of school going children to use the money to buy school items. this is expected largely to increase in the consumer spending in the months of september, October and december 2009. This in turn will have a multiplier effect on the economy.
Increase in pension amount from a minimum pension of Rm72o a month effective Jan 1, 2009. This will definitely put more in the hands of the pensioners who can cushion the effect of petrol price hike and increase in prices of goods.
Reduction of road tax for owners of diesel engines vehicles. This will increase the disposal income.
Increase in the monthly allowance of the physically challenged on welfare assistance from RM400 monthly household income to RM 720 for Peninsula Malaysia, RM960 for Sabah and RM830 for Sarawak.
One way to manage therisk of increased petrol price is the introduction of an efficient public transporation system. The Government in the Budget 2009 has made significant strides to address this issue by increasing the capacity of LRT & KTM kommuter System. However the full implementation of this will only be felt in 2014. The inefficient public transportation system until then will not solve the day to day woes of the public. It is recommended that the government relook at the implementation timeline as the under capacity issues will need to be addressed almost immediately.
Allocation of RM3billion to sabah and RM 3.3 billion to Sarawak augurs well for the foundation of an equitable sharing of wealth and the unification of the concept of Bangsa Malaysia as both the east Malaysia states has been repeatedly asking the Federal Govt for assitance with the compalints that t hey have not been given additinal allocation to alleviate poverty and lack of infrastructure. They also claim that they have been neglected over the years. This is a step in the right direction of the BN led government.
One key point that that came out of Budget 2009 sppech is the political stability of the country viz a viz the performance of the economy and the Stock market. Malaysia was once considered a safe "haven " by the investing community. However, this has taken a drastic change since the so many demostration that has taken place. The BN led govt need to seriously address this concern and radically reform its implementation of its projects and programmes proposed for 2009. The rakyat expexcts to see tangible benefits from the proposal in Budget 2009 . This will then lead amd increase the confidence in the present govt. People expects to see a governments that delivers.
Past election results (March 8 and permatang pauh) do not speak well on the peoples apprehension of the actions taken by the BN government . The expectation of the ppl in the street is the govenment representative who 'walk the talk" i.e to deliver their promise.
