Use resources wisely in Malaysia's 2016 budget: Sin Chew Daily

Malaysian Prime Minister Najib Razak speaking at the KL Convention Centre on Oct 21, 2015.
Malaysian Prime Minister Najib Razak speaking at the KL Convention Centre on Oct 21, 2015.PHOTO: EPA

In its editorial on Oct 23, 2015, Sin Chew Daily reminds that the government's revenue is limited and it should be used judiciously.

Allocation of resources is one of the directions of economic studies. Our resources are limited and it is therefore imperative that the government distribute them in the most efficient way for maximal effects.

Indeed in our day-to-day lives we need to allocate our own resources wisely. For instance, we need to decide whether to spend our money on a luxurious sedan or buy a house, whether we want to spend our year-end bonuses on a romantic European vacation or put the money in a unit trust fund.

Our value systems and objectives will decide how we are going to allocate our resources.

Normally for individuals like us, the allocation of our resources should only affect ourselves or our relatives.

But when the government is making a decision on resource allocation, it is going to have far-fetching effects on the whole society and must therefore be made with utter prudence.

Take a widely known example.

Because the government is unwilling to come up with huge sums of compensation, it has to allow highway concessionaires to raise the toll rates.

Such a move actually involves redistribution of government resources, as the money saved from here will be spent elsewhere.

The government's revenue is limited and it must therefore spend it wisely.

While the consequences of imprudent resource allocation might not show up immediately, they will most positively affect operational efficiency and even bog down the country's development.

The government is going to table the 2016 Budget in Dewan Rakyat very soon.

We really hope its resources will be better allocated this time, especially in relation to operating and development expenditures.

The total expenditure for the 2015 Budget was RM273.9 billion (S$89.4 bilion), of which RM223.4 billion was operating expenditure, only RM50.5 billion or less than a fifth for development.

The massive operating expenditure would not help propel the national economy but will instead become a weighty burden for the government.

With the economy now sluggish and domestic demand dampened, it is essential for the government to put in more money for development in order to stimulate the market and kickstart development instead of continuously dumping a big chunk of our resources on inefficient operating expenditure.

Additionally, the government will continue to hand out BR1M (a handout to the country's poor) and it has been said the sum for this purpose will be higher.

BR1M is a relatively new populist measure adopted by the government in recent years, and it seems that there is no turning back now.

The government is inclined to distribute more and more while the public are getting so used to it.

At a time when the national economy is weak, the government has an obligation to hold out a helping hand to alleviate the pressure on the shoulders of people from lower and middle-income groups.

That said, BR1M is only an expediency plan which is not going to bring improved productivity in the long run.

When the government is dumping large sums of money on BR1M, it will not be able to allocate more of its resources for projects that will actually create positive long-term effects.

Our resources are limited.

Whether a person succeeds or fumbles in life will depend very much on whether he knows how to effectively leverage on his limited resources.

The same goes for a country. The country will thrive if its government efficiently deploys the resources available.