Three Things We Learned From Malaysia Budget 2022

KUALA LUMPUR, October 30 – Yesterday, Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz submitted a massive allocation of RM 332.1 billion for Datuk Seri Ismail Sabri’s first cabinet budget.

The budget is expected to provide measures that can revive the economy and also support the lives of those affected by the Covid-19 pandemic, as well as including under the concept of the “Malaysian family” announced by Ismail .

In addition, the budget is seen as the first time that the government and the opposition have held a meaningful pre-budget meeting as part of their memorandum of understanding to ensure a stable government so that Malaysians can have a soup after two years of uncertainty breath.

Tengku Zafrul presented a budget to focus on the “three mistakes”: “recovering, building resilience, catalyzing reform” (in Malay for recovery, building resilience and leading reform).

Here are three things we tabled in the 2022 budget yesterday:

1. Healthcare is the biggest part of the budget, is it just difficult?

The Malaysian healthcare system has been severely affected during the height of the Covid-19 pandemic, with public hospitals running out of beds, personal protective equipment and oxygen tanks.

Putrajaya has since announced an allocation of RM32.4 billion to the health sector, the second highest allocation in the 2022 budget after the education sector. In addition, an additional RM 2 billion will be allocated to strengthen vaccines as well as RM 4 billion to improve the public health system for Covid-19.

Despite this number, some health observers note that the increase may be too small to fill systemic gaps.

“This is a 1.5% increase, and this amount is probably the smallest increase in the health budget in more than a decade,” Azrul Mohd Khalib, director general of the Galen Center for Health and Social Policy, said in a press release. .

“There is a false impression that despite the crisis that Malaysians have experienced in the last 22 months, the need for health and service delivery remains the same.”

Also, University of Malaysia Sains and Technology (MUST) economist Geoffrey Williams told the Malay Mail that health care is not responding to the necessary structural changes in the region.

“For health care, the public will still be too dependent on direct private health expenditures, which represent 35% of total expenditures. Health care costs are still below international standards,” he said.

Contract doctors who were dismissed after years of exclusion and did not receive the same pay as their regular counterparts were also given only four years of contract extension instead of being promoted.

2. A balance is needed to redistribute the wealth of the rich

Putrajaya said he expects to receive RM 234 billion in federal revenue to fund the RM 332 billion budget.
Despite the expectation that the ultra-rich and elite should pay more than those who need it, especially to fund the Covid-19 initiative, there is only one tax called ‘wealth tax’ – literally ‘prosperity’. Tax ”or durian tax for“ high income businesses ”.

Nevertheless, the RM100 million threshold of taxable income before a business is taxed under this Durian tax may be too high to be extended – as noted by the audit firm KPMG.

The government will also no longer impose the Real Estate Income Tax (RPGT) on disposal of individuals, permanent residents and businesses from the sixth year.

On the other hand, middle-income earners are likely to face the heat as Putrajaya announced a sales tax on goods not sold for more than RM500 from abroad and imported through services. Lazada.

The extension of taxes on sugary drinks and nicotine-based products can also affect these households, while they are unlikely to benefit from tax exemptions for electric cars, which are inaccessible to regular drivers.

3. The “Malaysian family” is moving towards inclusion by responding to the needs of women

Before the budget was tabled, some MPs raised the issue of a gender-sensitive budget to underline the needs of women that need to be considered in the future of post-pandemic recovery.

It was over, but Putrajaya announced a number of initiatives that would target sex crimes against women and children and address menstrual poverty.

Financial aid is also provided for housewives and widows to have a better future, in addition to single mothers earning less than RM 5,000 per month.

There is also a mandate for listed companies to have at least one female director by 2023, although far from the 30 percent representation is required.

But is it enough? The women’s group thought there was still a lot to do – but trying to budget with this gender objective was a commendable example.