Malaysia: Budget 2022 to be expansionary, lay foundations for wider reform

• Budget 2022 will be expansionary and lay the foundations for the government’s wider and longer-term reform efforts with sustainability continuing to be a major focus, said Finance Minister Tengku Zafrul Abdul Aziz.
• He said the budget would be focusing on three areas: speeding up recovery, strengthening economic resilience, and catalysing reform.
• “Financial assistance will remain ongoing for those most impacted, especially the Bottom 40 group, the unemployed and the vulnerable.
• “Support for businesses will remain steadfast, be it via affordable financing schemes or better access to credit or grants, to support operations while pivoting them towards increased automation and digitalisation,” he said at Invest Malaysia 2021.
• Zafrul said there would be an increased focus on sustainability and improving the resilience of Malaysia’s environment and water assets, following increased focus towards environmental, social and governance (ESG), net-zero emissions targets and further development of the circular economy.
• The government would also improve the labour market by, among others, focusing on hiring incentives in addition to subsidising wages, while enhancing fiscal prudence by improving procurement and debt management process while enhancing tax enforcement measures, he said.
• Meanwhile, in complementing the Perkukuh Pelaburan Rakyat (Perkukuh) initiative, Zafrul announced the establishment of the Public Listed Company (PLC) Transformation Programme (PLCT) which aims to deliver a high-performance Corporate Malaysia.
• New benchmarks and targets to strengthen the Bumiputera Economic Community will also need to be considered given that the challenges Malaysia faces today are very different from those 50 years ago, said Finance Minister Tengku Zafrul Abdul Aziz.
• He said the country must acknowledge that establishing the Bumiputera Economic Community is a multi-dimensional national endeavour – one that is critical to Malaysia’s long-term stability and growth.
• If the bumiputera are to become a rising economic force, well-intended plans like the New Economic Policy (NEP) must be modernised, the minister said.
• “Therein, we must strive for policies that emphasise outcomes, one that will benefit the entire nation,” he added.
• Zafrul said since the NEP was introduced in 1971, poverty among the bumiputera community has decreased by 89% to a level below 7.2%.
• In 2020, a total of 61.6% of bumiputera were employed in skilled occupations, and 73.7% of bumiputera households owned a home, he said.

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