The 2010 budget will emphasise on ways to spur the country’s economy by making it “high income” based, with the services sector playing a pivotal role in the new economic model currently being finalised, Prime Minister Datuk Seri Najib Tun Razak said
Najib, who is also Finance Minister, also promised that all government policies would be consistent, with no “U-turns or flip-flops”.
Policies, he said would be designed to spur growth and instill greater confidence among investors for an improved inflow of Foreign Direct Investment (FDI), taking into account the stiff competition due to the global economic meltdown.
“FDIs worldwide are expected to be 50-60 percent less than what was available last year. We need to get a slice of that (remaining FDIs),” Najib said in his opening address at the 2010 Budget Consultation meeting here today.
“We have to look at how to ensure greater confidence in terms of government policies. We have to be market friendly and generate more domestic activities.
“At the same time, we must create a more just and fair society.This goal has not been forgotten or put on the backburner. The root is that, we have to be more market friendly and at the same time, have a just and fair society,” he added.
The Prime Minister also revealed that he would make a “major announcement” pertaining to greater liberalisation at the 2009 Invest Malaysia at the end of this month.
“We are tackling the short term challenges.It is important for us to chart a new direction for the country with a new economic model developed by the goverment,” he said.
He also said that the medical sector, especially medical tourism, would be placed in the high priority basket “to position Malaysia as a world class health care services provider”.
According to Najib, the proposed Corridor developments, especially the Iskandar Regional Development, would also continue as Malaysia saw ample potential in these projects.
On creating a just and fair society, he said it would emphasise on addressing the needs of every community. On assistance to Bumiputeras, he said it would be targeted at those deserving it.
“Helping the Bumiputeras in the wrong way may not be sustainable.We want to make them more resilient and competitive. To rely on a quota is something that is unrealistic. We have to identify good Bumiputera companies rather than rely on a quota,” he said.
He said greater liberalisation will come with more competition within companies in Malaysia and from aboard.
“So, we have to look at ensuring that Bumiputera companies are not eliminated in the process and there are ways and means to help them, not so much in the traditional manner but in making them more resilient,” he explained.
On the size of next year’s budget, he said, the government was currently looking at its revenue forecast and expenditure.
“We need to fine-tune that.I would not want to commit to the figure at this stage as I want to be as precise as possible,” he said, when asked if the size of the budget would be RM200 billion as indicated earlier. The government, he said wants to table a budget that is well accepted by the market, which is looking at the deficit.
“A large deficit is only acceptable if it is temporary and I think people are talking in terms of between 1-2 years,” said Najib. He said, the budget deficit figures would be announced when the 2010 budget is tabled.