Economist Yeah Kim Leng says the Government should limit the use of the 1 Malaysia People’s Aid (BR1M) for employment, education and skills upgrading purposes.
This, he said, would ensure that the allocation for BR1M was spent more efficiently.
Speaking to FMT, the Professor of Economics at Sunway University Business School said if the BR1M cash hand outs were tied to employment, education and skills-upgrading, it would better benefit those who needed the handouts.
“If those who receive BR1M just use the money for frivolous reasons, then it will not be very helpful, compared to them using it for learning new skills to help them earn a better income,” he said, adding that this was a more sustainable use of the BR1M allocation.
Yeah was commenting on what the Government should do in the upcoming Budget 2017 to ensure economic growth remained on track.
Conditional use of the BR1M, he said, was a way of optimising targeted subsidies and reducing wastages.
In the past, criticisms have been levelled against BR1M that it did not go far in alleviating the financial burden of the people, and that it was a form of bribery by the Government.
Other measures, he said, would be keeping spending in line to meet the target of reducing the country’s fiscal deficit to 3 per cent of the Gross Domestic Product (GDP) for 2017.
“The Government must also concentrate allocation and measures to alleviate the economic hardships faced by the B40 and M40 households to tackle the rising costs of living, especially in areas such as housing, healthcare, transport and education.”
Yeah also said the Government should implement income tax breaks and the use of selective tax credits and financial incentives to spur investments in SMEs, online businesses and start-ups, as this would help create jobs and wealth.
Earlier this year, Treasury Secretary-General Mohd Irwan Serigar Abdullah said the finance ministry had requested the Inland Revenue Board to conduct a thorough evaluation of the possibility of taxing online businesses.
Yeah said the government should increase development spending while reducing operating expenditure gradually to ensure the efficiency and effectiveness of public service delivery was not compromised.
On a separate note, Yeah said in Budget 2017, it would be prudent for the Government to benchmark the budget at a conservative USD45 to USD55 per barrel of crude oil, to avoid having to recalibrate the budget.
In January, the government recalibrated this year’s budget following the drop in crude oil prices from USD48 per barrel when the budget was announced in October 2015 to USD30 this January.
Yeah said for the coming year, crude oil prices were forecasted to range between USD45 and USD55 a barrel, with the possibility of prices touching USD60.
Budget 2017 is set to be tabled on Oct 21 by Prime Minister Najib Razak.