The budget was much anticipated to propose measures that can kick-start the economy as well as prop up the livelihoods of those affected by the COVID-19 pandemic, as well as be inclusive as part of Ismail’s touted “Keluarga Malaysia” concept.
Moreover, the Budget was seen as the first time the government and the Opposition had a meaningful pre-budget session as part of their memorandum of understanding to ensure a stable government to ensure Malaysians could breathe easily again after two years of uncertainty.
Tengku Zafrul has since tabled a Budget that aims to focus on the “three Ms”: “Memulih, membina ketahanan, memangkin pembaharuan” (Malay for recovery, building resilience and driving reforms).
Here are the three takeaways we get from the 2022 Budget tabled by yesterday:
1. Healthcare gets biggest slice of budget, will it just paper the cracks?
Malaysia’s healthcare system was severely stretched during the peak of the COVID-19 pandemic, with public hospitals running out of beds, personal protective equipment and oxygen tanks.
Putrajaya has since announced a RM32.4 billion allocation to the health sector, the second-highest allocation in Budget 2022 after the education sector. Additionally, a further RM2 billion was allocated for vaccine strengthening as well as RM4 billion for enhancing the public health system for COVID-19.
Despite the amount, several healthcare observers noted that the increase may be too little to address a systemic shortcoming.
“It is an increase of 1.5 per cent, and the amount is arguably the smallest increment to the health budget in more than a decade,” said Azrul Mohd Khalib, the chief executive of the Galen Centre for Health and Social Policy, in a statement.
“It gives the wrong impression that despite the crisis that Malaysians have endured over the past 22 months, somehow health needs and service delivery remain the same.”
Similarly, Universiti Sains Malaysia’s economist Geoffrey Williams told Malay Mail the allocations for health is not addressing the structural changes needed in the areas.
“For healthcare people will still rely too much on out of pocket spending on private health which accounts for 35 per cent of total spending. Healthcare spending is still below international norms,” he said.
Contract doctors, who had staged a walkout after years of being sidelined and not receiving equal pay as their permanent counterparts, also were only given a four-year contract extension rather than being promoted.
2. Balance needed to redistribute wealth from the rich
Putrajaya said it expects to receive RM234 billion in federal revenue to fund the RM332 billion Budget.
Despite an expectation that the ultra-rich and elites will be expected to pay more compared to those who are needy, especially to fund COVID-19 initiatives, there was only a one-off tax so-called “Cukai Makmur” ― literally “Prosperity Tax” or windfall tax for “high-income firms”.
Even then, the threshold of RM100 million in taxable income before the firms would even get taxed under this windfall tax may just be too high to be wide-ranging ― as noted by audit firm KPMG.
The government will also no longer impose the Real Property Gains Tax (RPGT) for disposals by individual citizens, permanent residents and companies from the sixth year onwards.
Instead, it is those in the middle income that may face the heat, as Putrajaya announced a sales tax on goods not exceeding RM500 from abroad sold online and imported through air courier service ― which will target sellers and customers of platforms such as Shopee and Lazada.
Expanded tax on sugary drinks and nicotine products may also impact these households, while they will unlikely to benefit from the tax exemption for electric cars that remain out of reach for normal drivers.
3. ‘Keluarga Malaysia’ moves towards inclusivity by addressing women’s needs
Prior to the Budget being tabled, several MPs had brought up the issue of gender-responsive Budget to highlight women’s needs which needed to be addressed in the post-pandemic recovery future.
It has been a long time coming, but Putrajaya has announced several initiatives that will be targetting sexual crimes against women and children, and tackle period poverty.
Financial aid will also be given so housewives and widows to have better future security, in addition to single mothers who earn below RM5,000 per month.
There was also a mandate for publicly-listed companies to have at least one female director by 2023, although far from the desired 30 per cent representation.