Brace for a tough budget and sacrifices, says Guan Eng

Malaysians should brace for a tough budget if the remarks by Finance Minister Lim Guan Eng (pic) ahead of Budget Day on Nov 2 is anything to go by.

(The Star) – Lim said in an interview with news portal Malaysiakini that he might just end up becoming the most unpopular finance minister in the nation’s history .

“It is going to be a very difficult budget.

“It is likely I will end up as the most unpopular finance minister because I have no goodies to give out,” he said.

“So we are looking for sacrifices from Malaysians who are used to getting goodies, and now suddenly are not getting goodies,” Lim said at his office in Putrajaya.

He said sacrifices were necessary to help reduce the RM1tril national debt so that Malaysia could get back on track fiscally.

“There are no two ways about it.

“Make a bit of sacrifice so that, hopefully, in three years’ time, Malaysia will be back on track,” he said.

Lim had previously said that scrapping the Goods and Services Tax (GST) for the Sales and Service Tax (SST) would create a RM21bil shortfall for the national budget.

“We had to fulfil that principal (election) promise (of abolishing the GST). It was tough on us, but we had to fulfil it.

“Despite abolishing the GST, we are still able to pay Bantuan Sara Hidup and we are able to keep prices of petrol stable,” he pointed out.

He reiterated in the interview that the government would make up the difference in revenue from the rise in global oil prices and with other methods such as bond issuance, refinancing and asset monetisation.

According to Lim, there were strong economic headwinds worldwide fuelled by the trade war between the US and China.

At present, he said, it was unclear whether a global recession was underway although the trade war had so far been positive for Malaysia.

“We have actually received increased interest from investors, principally because Malaysia is seen as a safe harbour for both American and Chinese companies,” Lim said.

However, he said this was likely only for the short-term.

He said if the trade war dragged on for more than two years, Malaysia would also suffer like other countries.