Amid expectations that a difficult budget will be announced this November, Lim Guan Eng has said he may end up as the most unpopular finance minister in the nation’s history.
- Brace for a very difficult budget
- Sacrifice to reduce RM1 trillion debt and be back on track in 3 years’ time
“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 quipped.
“So we are looking for sacrifices from Malaysians who are used to getting goodies and now suddenly are not getting goodies,” Lim said in an interview with Malaysiakini at his office in Putrajaya.
These sacrifices are necessary, he said, to help reduce the RM1 trillion national debt so that Malaysia can get back on track fiscally within three years.
“You have to sacrifice if you want to reduce the RM1 trillion debt. 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 noted there were strong economic headwinds throughout the world fuelled by the trade war between the US and other countries especially China.
A safe harbour
For now, he said, it remains unclear whether a global recession is on its way although the trade war between the US and China has so far benefitted 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 revealed.
However, he warned that the benefits from the trade war are only for the short-term and if the war dragged on for more than two years, Malaysia will also suffer like other countries.
Since becoming the finance minister, Lim has “exposed” many purported cases of misappropriation of funds by the previous government.
Among them, he claimed that over RM19 billion was “robbed” from refunds meant for the good and services tax.
Lim told Malaysiakini the previous administration had been playing “musical chairs” in trying to cover up these misappropriations of funds.
“It’s just like you have ten holes but you only have nine covers, so you play musical chairs.
“That hole needs to be covered, so you cover it first but there is still one hole not covered, so you keep on playing that type of musical holes.
“But in the end, you will get caught because you will find that suddenly another hole has popped up and you have run out of covers,” he said.
The GST was abolished in the last parliamentary sitting and replaced with the sales and services tax (SST) which came into effect this month.
Lim previously said that scrapping the GST for the SST would create a RM21 billion shortfall for the national budget.
He reiterated the government plans to make up the difference with revenue from the rise in global oil prices and with other methods such as bond issuance, refinancing and asset monetisation.
“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. – Malaysiakini