Questions arise as to whether overhauling Putrajaya’s automotive fleet is a financially prudent means of implementing a green transition, given the 2024 budget’s emphasis on fiscal consolidation, subsidy rationalisation and a reduction of RM9 billion in development spending compared to the 2023 budget.
Unchecked contradictory policies and messaging may not only increase operating expenditures but also undermine the widespread buy-in needed for successful long-term fiscal reforms. Alternative policies – such as expediting the implementation of the shelved carbon tax – that would fulfil the twin goals of sustainability and fiscal consolidation, should be more strongly considered.
ELECTORAL AND POLITICAL CONSTRAINTS
Meanwhile, electoral cycles and political considerations constrain reform ambitions. Emoluments and retirement payments for civil servants and pensioners – a significant voter base – constitute 42 per cent of the RM394 billion budget.
If these dues were smaller, there would be less borrowing to compensate for the 2023 fiscal deficit of RM86.2 billion and finance development spending.
The government expects emolument and pension costs to rise further. Tightened spending on these fronts is necessary for effective fiscal consolidation.
But Malaysia’s August state elections show the Anwar government losing ground, particularly in Malay-majority seats, due to greater ethno-religious polarisation and weaker grassroots machinery.
Vote banks – such as the civil service – may be more crucial than ever going forward. Plans for pension restructuring will be weighed against the risk of further diminishing electoral and popular support.
Source: CNA
