Balanced budget timeline needs to be extended by two or three years: Johari
KUALA LUMPUR: Second Finance Minister Datuk Seri Johari Abdul Ghani has reiterated that the country is unlikely to meet its balanced budget target by 2020 and will need another two to three years to reach zero fiscal deficit due to rising emolument and pension expense.
He said the government will work on both increasing revenue and cut costs. Johari said the government wants to bring everyone to be tax-compliant to create a level playing field for all.
“Otherwise genuine companies that pay taxes have to fight with shadow economy that doesn’t pay. The system of compliance is key,” Johari said at a conference today.
He added that cutting spending and costs are ongoing but the government will focus more on trying to increase productivity and bring innovation and e-government into play to reduce its headcount going forward.
“We want government staff to embark on multi-tasking. We use technology as much as we can, we try to be e-government. We grow our economy without growing our staff strength. That’s the strategy going forward,” said Johari.
He explained that the government prepared the fiscal deficit target at a time when the oil price was high, but today it needed to spend to stimulate the economy, and more time is needed to achieve the target.
“If you squeeze (fiscal deficit target) too fast, it will affect the spending and the economy going forward,” said Johari.
Source: The Sun Daily