The Prime Minister Datuk Seri Najib Razak described the Budget being about “gifts, rewards and incentives”. It is most mistaken view. It is a tool or instrument for presenting a statement about the state of the economy, its prospects, and policy announcements for improving governance. A well-crafted budget statement should be an objective and honest presentation meeting the goal of accountability.

Sadly, the Budget for 2018 presented by Najib fails these basic tests. His speech of almost 12,000 words was more akin to a laundry list of items of giveaways, expenditure allocations both real and imagined, and vague statements about the economic consequences that would result.

The speech omitted any reference to urgently needed policy changes to restore the competitiveness of the economy that would enable the nation to escape the middle-income trap it finds itself in. The speech was silent about measures to correct the stagnation in real incomes, and address the looming danger associated with the mountain of debt: – public, corporate and household.

The Budget has been turned into an unabashed and irresponsible first salvo in the campaign for the GE 14. Page after page of the speech detailed expenditures and proposed allocations; no group was ignored in the largess being extended.

Little was said about how the proposed expenditures were designed to advance the overarching economic goals; no reference was made to how the addiction to deficit spending was to be overcome.

The projected deficit was itself a meaningless figure as the profligate spending in some measure would be financed outside of the budget, and nor did the Prime Minister in his speech or in the Economic Report provide details about the level of contingent liabilities or the new liabilities being assumed. Read the rest of this entry »