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Post Budget 2019: Economic Outlook & Perspectives

22 Nov 2018

“The business of the government is not to be in business,” said YB Tony Pua, echoing the familiar words of Minister of Finance YB Lim Guan Eng in Parliament. “It’s a key driving motto behind the decisions that we make on a near daily basis at the MOF, and the principle that the Government doesn’t know best.” The real consequence of this phrase, elaborated Tony Pua, was to project two elements. Firstly, that the Government needs to be ‘competitively tendered.’ And secondly, that ‘the Government realises its constraints.’

Speaking at the BMCC’s first half-day conference held on 22 Nov organised in collaboration with the Malaysian French Chamber of Commerce & Industry (MFCCI) and sponsored by Standard Chartered Bank Malaysia, YB Tony Pua, Political Secretary to the Minister of Finance delivered a comprehensive and thought provoking address on the Budget, which he played an instrumental part in its drafting.

Covering several aspects including bringing fiscal growth, increasing opportunities and exporting more Malaysian businesses abroad, Tony Pua stressed on establishing more partnerships whilst ensuring an environment with a level playing field for competition. “We want to favour our local Malaysian companies but not at the expense of the taxpayers. [And] we will welcome joint venture partnerships between foreign and local entities,” he said. On the role and constraints of the Government, he laid out the futility of over-ambition in striving to take on too many projects. “The Government cannot do everything the private sectors do better. And when you try to do everything, you’ll do it badly. And hence if you read the Budget, you will find splattered across the entire Budget, you have various forms of partnerships and collaborations with the private sector to deliver goals that the government wants to achieve.”

“We have cancelled many projects that are not only expensive and burdensome but also from a long term perspective are not economically productive for this country, for example the East Coast Rail Link.” However he reassured the audience that there will be more projects in the future after due identification and evaluation before implementing the right infrastructure projects that will bring the necessary returns for the country.

Amarjeet Singh (Malaysia Tax Leader) and Aaron Bromley (Indirect Tax Partner) represented EY in presenting detailed analysis of the Budget from a tax perspective, including changes in corporate and resident tax rates over the years, the replacement of capitalisation rules versus earning stripping rules, incentives and tax controversies. Finally, a further in-depth panel discussion on private and public sector initiatives ensued between Richard Record (Lead Economist, World Bank Malaysia), Datuk Norazman Ayob (Deputy Sec. Gen, MITI) and Abrar Anwar (CEO, Standard Chartered Bank Malaysia) with (Ainol Yaacob (Head of Country Malaysia - Tax & Strategy, BP Malaysia).

A full house of over 100 participants attributed to the overall success of the event, with the Q&A sessions and Networking Lunch providing them the opportunity to express matters of real concern to their industries with the speakers.

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