The state will spend a total of RM5.706 billion on ordinary expenditure which is RM385 million more than its expected total revenue of RM5.321 billion in the proposed State Budget for next year. It will be first budget deficit after 14 consecutive years of budget surpluses.
Chief Minister Datuk Patinggi Tan Sri Adenan Satem said this during the tabling of the 2017 State Budget at the State Legislative Assembly yesterday.
“Since 2015, the state’s revenue has been on a declining trend, significantly impacted by the falling of oil and gas prices, and the weakening of Ringgit Malaysia. And at the same time, expenditure is on a rising trend,” he added.
With the expected weak global economy next year, Adenan warned that it is imperative that the state continue to have an expansionary fiscal policy to cushion the economic recessionary pressures, and to ensure a continual development momentum to support the state’s much-needed economic and rural development.
“In light of this, the state government therefore proposed for a higher development budget for 2017 so as to sustain a desired level of economic growth and development,” shared Adenan.
A total of RM5.928 billion or approximately 73 per cent of the budget is proposed for development while RM2.206 billion or 27 per cent is proposed for operating expenditure.
“Being a developing state, it is essential that we continue to have a budget that is biased towards development,” added Adenan.
Continuing on, the Chief Minister said the budget would also be rural-focused with RM2.982 billion or 50 per cent of the allocation for rural transformation to narrow the development gap between urban and rural areas in the state.
“This is in line with our commitment to give greater focus on the implementation of programmes and projects in the rural areas to accelerate rural development transformation,” he pointed out.
Although the proposed budget continues to be development-biased and rural-focused, it expects to create greater and more balanced development in the state while achieving the desired level of economic growth.
As such, he said the budget would also continue to prioritise the commerce and industry sectors as well as other economic activities and productive sectors such as social and community development, general administration, transport and communication, public utilities and agriculture and land development.
He explained that the growth would be driven by productivity and efficiency with efforts concentrated on ensuring that the operating expenditure is adequately managed and controlled to avoid suffering from a ‘Runaway Operating Budget’ while ensuring the available resources are properly optimised in order to minimise wastage.
Adenan also mentioned that the proposed budget was formulated by taking into consideration the various challenges from external and domestic fronts, and any anticipated possible outcomes that could have an impact on the development of the various economic sectors in the state.
Additionally, the state government had also taken steps to relieve the cost of living and improve disposable income through the reduction of electricity tariffs, land rents and assessments, he said.
He also said these steps were expected to help sustain economic growth as private consumption was anticipated to increase.
Source : Samuel Aubrey, Marilyn Ten, Rintos Mail, Peter Sibon, Lian Cheng, Saiful Bahari, Daryll Law, Lim How Pim, Antonia Chiam, Irene C and Rachel Lau, Photographers: Muhd Rais Sanusi and Chimon Upon@The Borneo Post Online