KUALA LUMPUR – The development expenditure under Budget 2021 for construction projects cannot be cut, as doing so will adversely impact the country’s economic cycle and people, said Datuk Seri Mustapa Mohamed.
The minister in the Prime Minister’s Department said more than 40% of the development projects contained in the Budget are a continuation of incomplete ones, such as the construction of schools, hospitals and highways.
If the projects are halted, the people will suffer, he told TV3’s Soal Rakyat programme today.
“The government does not have the option to cut the allocation, as it would be unreasonable.
“I am sure the people will understand. What’s important is that we have to explain to them that it is difficult for the government to cut this allocation because the projects already exist.”
He was asked why Putrajaya has not opted to postpone such projects and instead channel the allocation to Malaysia’s Covid-19 response.
Mustapa said reducing the amount will also hamper economic growth, as about 200 sectors, including banking, architectural and consultancy, depend on the construction sector.
Citing Budget 2019 as an example, he said many professionals lost their source of income when the government cut allocation for the industry.
“The construction sector has a large multiplier effect. (Reducing the allocation) will adversely affect many quarters, and thousands of contractors will lose their jobs.
“The government has allocated RM322.5 billion, or 20.6% of gross domestic product, for Budget 2021, an increase from the total expenditure allocation for 2020, which was revised upwards to RM314.7 billion from the initial RM297 billion.
“Of the total Budget 2021, RM236.5 billion, or 73.3%, will be channelled to operating expenditure, RM69 billion (21.4%) to development expenditure and RM17 billion (5.3%) to the Covid-19 Fund.” – Bernama, November 28, 2020
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