Budget 2011

The Leaders note that the budget has all the hallmarks of a consultative budget and a foundation-setting budget with lack of surprises. We do see a small increase in spending levels but we will not be uncomfortable with it as the external environment could pose headwinds towards the budget. The budget will sets the stage for the Economic Transformation Programme and that the smaller-than-expected cut in the current deficit was understandable given the economic uncertainties in the US and Europe. Some analyst said that it is a balance budget though with small increases in spending levels. For example the plan to raised the service tax to six per cent from five per cent, is sweetened with a slew of measures targeting consumers, such as a five-year freeze on highway tolls, tax waivers on mobile phones and designer goods and stamp duty discounts for first-time home owners.

According to Prime Minister speech the private sector will lead economic growth and the government’s bold moves to spend on infrastructure should boost investor confidence, but some critics noted that the budget was more likely to please voters than investors. Many feel that the RM212 billion spending plan was set to disappoint investors who continue to be frustrated with lack of progress in reforms of Malaysia’s subsidies and its race-based policies.

Whatever it is, The Leaders wish PM and his planned budget all the success to propel Malaysia forward as high income nation.