Prior to the release of the first ever government budget by the Pakatan Harapan coalition, Prime Minister Mahathir Mohamad had warned Malaysians that it would be a budget of "sacrifice".

Said Mahathir in Sept. 2018:

"This budget is of sacrifice, everyone will have to sacrifice. The budget has to be careful. We can't spend more than our earnings.

We can't entertain all sorts of requests. We have to accept that we must sacrifice."

On Nov. 2, Finance Minister Lim Guan Eng unveiled the Budget in Parliament.

Here are some of the more interesting points from his speech.

Spending and deficit increase

Despite Mahathir's talk of sacrifice, the government will boost spending, according to the Malay Mail.

The total budget for 2019 stands at RM314.6 billion (S$103.78 billion), excluding an RM2 billion (S$659.75 million) contingency fund.

This is higher than the RM282.3 billion (S$95.8 billion) tabled by the previous Barisan Nasional government in 2018.

The Ministry that will benefit the most is the Ministry of Education, receiving RM 60.2 billion (S$19.86 billion).

Kementerian Pendidikan adalah penerima peruntukan yang terbesar berjumlah RM60.2 bilion atau 19.1% daripada keseluruhan perbelanjaan Kerajaan tahun 2019. #Belanjawan2019

— Ministry of Finance🇲🇾 (@MOFmalaysia) November 2, 2018

However, due to the increased spending, Malaysia's deficit is also set to grow larger.

According to Malaysiakini, Lim said that the fiscal deficit for 2018 is expected to hit 3.7 per cent, before being gradually lowered over the next three years:

• 3.4 per cent in 2019
• 3.0 per cent in 2020
• 2.8 per cent in 2021

He blamed the previous government for failing to pay off debts related to various infrastructure projects and GST refunds.

Petronas to help out

Petronas, the state-owned oil and gas giant, will be doing its part to contribute.

In 2018, it paid out RM26 billion (S$8.58 billion) to the government.

In 2019, it will be asked to contribute RM54 billion (S$17.81 billion), including a special dividend of RM30 billion (S$9.9 billion).

[related_story]

Tolls on motorbikes on link to Singapore abolished

Lim announced that road tolls on motorcycles on the Tuas Second Link will be abolished.

He said,

"[T]he Government will prioritise solutions for both the Causeway and the Second Link to Singapore to ease congestion and hardship of Malaysians and residents who travel on a daily basis. It will include an allocation of RM10 million (S$3.3 million) to upgrade the Autogate Malaysia Automated Clearance System and M-Bike."

The abolishing of road tolls will also take place on both Penang bridges next year.

Tolls on inter-city highways will also remain the same in 2019.

Lim explained how much this would cost the government:

"Freezing the increase of inter-city highway toll rates is estimated to be RM700 million ($$230.1 million), and the yearly estimated cost of abolishing the motorcycle toll is at RM20 million (S$6.6 million), starting from January next year."

Debt Management Office to review and manage current and future debt and liabilities

Lim announced the setting up of a Debt Management Office responsible for reviewing and managing the government and its agencies’ current and future debt and liabilities.

Lim added that the office shall have oversight over debt issuance by the Federal Government, statutory bodies and Special Purpose Vehicles.

In reviewing Malaysia's existing debts, Lim said that the government must also review its future debt commitments.

Therefore, the Malaysian government has decided to cancel the RM15 billion (S$4.94 billion) Multi-Product Pipeline and Trans-Sabah Pipeline projects.

In the context of the cancellation of projects, Lim spoke about the Kuala Lumpur - Singapore High-Speed Rail.

"We have cancelled the RM60 billion MRT3 project for now, pending the completion of MRT2. We have also postponed the implementation of the Kuala Lumpur – Singapore High-Speed Rail which would have cost us at least RM110 billion (S$36.25 billion)".

Rise in minimum wage

The minimum wage will rise to RM1,100 (S$363) in 2019.

According to PH's manifesto, it had initially called for a rise in minimum wage to RM1,500 (S$495).

It initially proposed a rise to RM1,050 (S$346) nationwide from the current level of RM1,000 in Peninsular Malaysia and RM920 ($303) in Sabah and Sarawak.

However, this led to protests in Oct. 2018.

Signs are good for Malaysia's economy

Lim also highlighted certain positive indicators of Malaysia's economy.

He said that the Ringgit had appreciated against several different Asian currencies, including Singapore's.

#Budget2019: The ringgit has appreciated 12.3% against the Indian Rupee, 8.1% against the Indonesian Rupiah, 3% against Philippine Pesos, 3.2% against Chinese Renminbi and 0.6% against Singapore Dollar

— The Star (@staronline) November 2, 2018

He also said that the KLCI, Malaysia's stock exchange, was doing better than other Asian countries like Singapore, Hong Kong, South Korea, Philippines, Indonesia and Thailand, and also the MSCI Emerging Market Index.

Said Lim:

"This shows that domestic and foreign investors are confident of the new Harapan government."

And near the end of his speech, he said:

"To borrow from what the Prime Minister said, Malaysia is like an Asian Tiger that has been sleeping and now has been awakened."

Top image adapted from Lim Guan Eng's Facebook page.

Content that keeps Mothership.sg going

??
Don't miss out on this.

?
Few things we wish you knew

???
Earn some karma points here. Say real one.

? vs ?
You're on the MRT. Do you read or surf?
Why not both??

?
Damn cheap movie tickets here.