Budget 2023 and International Work

By Wong Chen

I am writing this article on the morning of 25th February 2023; the morning after the Budget 2023 was tabled in Parliament. We are currently in the middle of a long Parliament session which is slated to end on 30th of March. In this article, I will address some budget issues and provide an update of what I will be doing in the month of March 2023.

As I stated in my last article, I am not involved in the budget process this year. I was also not involved in the budget process under the Pakatan government of 2018 and 2019. However, for all the other years since I was elected as an MP, I was involved in orchestrating the alternative budgets. Such is life. My advisors joked that perhaps I should change my work style, to do less actual technocrat work and instead focus on networking and social media more. They mean well, but my answer is a very firm no.

The 2023 budget is very big at RM386.1 billion, but as a consolation, it is smaller by RM9.2 billion compared to the 2022 actual budget spending, which came to a whopping RM395.3 billion. The deficit is also smaller at 5% of GDP compared to the 2022 deficit of 5.6%. In addition, the government will be passing a Fiscal Responsibility Act soon and has set a target of sustainable fiscal deficit of 3.2% by the year 2025.

On the Operating Expenditure (opex) side, the government is intending to spend RM289 billion, which is lower than the RM292.7 billion seen in 2022. There are many ways to interpret a smaller opex; one better version is that this could be attributable to cost savings by fighting corruption and wastage.

On the Development Expenditure (devex) side, this is a new spending record of RM97 billion. This raises a fundamental question on how the government intends to contain the growing national debt. It appears from the budget documents, that it intends to β€œcontain” the national debt by growing the GDP faster, so that as a percentage the national debt shrinks but in real ringgit terms, it will still grow.

The truth of the matter is these numbers, are ultimately projections. Only time will tell if they are realised and are on mark. More importantly in his budget speech, Prime Minister Anwar Ibrahim pledged to fight corruption and wastage. This is a crucial pledge, as the effectiveness of his budget will largely depend on eradicating corruption and delivering better governance.

Now all the above macro numbers may be a bit too technical for some of you. So let me just highlight a few more relevant budget plans for 2023.

For the middle-income group earning RM35.000 to RM100,000 a year, you will be enjoying a 2% reduction on your personal income tax. This will impact roughly 2.4 million taxpayers and free up disposal income up to RM1,300.

However, for those earning above RM100,000, they will be paying 0.5% more, and those earning RM1,000,000 above will be paying 2% more in personal income tax. This higher personal income tax rate will impact about 150,000 taxpayers. While the above tax rate may not substantially change the overall tax collection of the government, it is in the right step towards fairer and progressive taxation.

As for the lower income households earning less than RM2,500 per month, the government has allocated up to RM3,100 aid for these families. The Rahmah Cash Aid will provide up to RM2,500 direct cash aid and with the help of e-kasih data, the government will provide an additional RM600 for the hardcore poor.

Most of you are awaiting news on the budget for the USJ 1 Klinik Kesihatan. At the time of writing this article, my officers and I are still unable to find any documentation to confirm its allocation. Not to worry, I will be delivering my speech as the first budget debater for PKR on Monday 27th February; and I will raise the matter and ask for direct confirmation from the minister. Hopefully we can get a positive answer from MoH within the next two weeks.

Lastly, as I stated in my last article, I will be moving away from policy work on finance and the economy and re-focusing more on international relations, human rights, and climate change.

On that front, I am happy to report that I will be busy for most of March 2023. Lately, I have increased my diplomatic meetings by a factor of three. For the month of March, I will be hosting ambassadors of the United Nations, Turkey, Tanzania, New Zealand and Switzerland for dinners at my home. Yesterday, I had lunch with Vadym Halaichuk, a Ukrainian MP and special envoy of President Zalenskiy, to discuss resolutions to the Russian invasion of Ukraine.

Next week, I am going to a human rights conference in Jakarta for ASEAN Parliamentarians for Human Rights. I will also be representing Parliament Malaysia and attend the Inter Parliamentary Union conference in Bahrain in mid-March for the Science and Technology Working Group, focusing on climate change. While my role at the national level has been somewhat curtailed by politics, I will continue to do my best in serving my constituents and also take on a more international role.