PETALING JAYA – Dealing with the rising cost of living must be the government’s priority in Budget 2024, experts said.
Universiti Tun Abdul Razak economics professor Barjoyai Bardai said the country is now in a “crisis” situation, and the government must prioritise the well-being of households, especially those in the lower income groups.
He said the government needs to target economic growth that can help ease the lower income groups’ burdens.
“It is important for the government to focus on issues that matter to the people in the coming budget,” he said.
He said while the government can help find ways to reduce the cost of living, it cannot control external factors beyond its powers.
Yet, the government cannot afford to be sidetracked by less pressing issues and still needs to find ways to increase the income of families.
Among the options were to introduce a higher minimum wage and progressive wages, he said.
Fiscal consolidation
Sunway University economics professor Yeah Kim Leng said the government must not look at aggressive spending but fiscal consolidation with the aim of reducing the budget deficit of 5% to 4.5% or 4.8%.
“Various allocations for ministries will continue that will likely include a rise in development expenditure.
“Good governance is very crucial here to ensure money is spent prudently and with minimum wastage and leakage.
“The government also needs an efficient delivery system to ensure help reaches those who most need it.”
He said government spending in Budget 2024 must also look at the Covid-19 pandemic’s aftermath and how to help lower income groups manage the rising cost of living.
Cash aid
Yeah said cash assistance to targeted lower income families instead of blanket subsidies for everyone will help reduce the government’s burden.
He said it is important to deal with technical issues such as food security, as it has an impact on household budgets.
“The government in the coming budget needs to urgently expand production capacity so that it is efficient and productive.
“This will help create adequate supply which is produced at competitive prices.
“Food import substitution is an important tool, and this can be done by expanding domestic supply.”
Yeah also said in the coming budget, the government should encourage the use and deployment of technology for food production.
He said smart agricultural practices will help lower cost and increase output and yield.
He said this is a unique opportunity for the government to use the budget to help reduce the suffering of the lower-income group.
He added by looking at the entire value chain, the government must encourage the private sector to produce products locally instead of relying on imports.
Budget 2024 will be tabled on October 13. – The Vibes, October 5, 2023
