Is Najib’s 2017 budget a bid to secure the upcoming election?

Former Malysian prime minister Najib Razak speaking Michael Wuertenberg

Najib has rolled out his new annual budget, and in an attempt to gain the favour of the masses he has introduced new subsidies and tax breaks. Will Najib’s 2017 budget win him back the confidence of his people? 

By Tan Zhi Xin 

On the 21st of October, Malaysian Prime Minister Najib Razak announced the national budget for 2017, which highlighted the determination of the government to accelerate economic growth amid the global slump in oil prices and high public debt. 

Malaysia is currently facing many economic issues, including a loss of RM 30 billion ($7.2 billion USD) in revenue, due to the global slump in oil prices, high public debt, economic instability due to the economic slowdown of China (its largest trading partner), massive outflow of capital, and increasing inflation rates.

What does the 2017 budget entail?

The latter problems threaten to suffocate Malaysia’s economy, thus Najib’s proposed budget aims to address many of these issues.

As a result, the budget Najib unveiled is no doubt ambitious, as it stands at RM 260.8 billion ($62.3 billion USD), which is a 3.4 per cent increase from 2016.

Moreover, Najib has stated “in line with our commitment to put the people first; we intend to accelerate economic growth, empower human capital, drive education, increase connectivity, strengthen inclusive development and improve public service delivery”.

One of the main highlights of the budget is an increase of financial aid to the Malaysians. A total of RM 6.8 billion ($1.6 billion USD) was allocated to the 1Malaysia People Aid Scheme (BR1M) program. According to the Prime Minister, this increase is certainly not “animal feed nor bait” but “sincere assistance from the government”.

Cash payments for households with a monthly income lower than RM 3,000 ($712  USD) would increase from RM 1,050 ($249) to RM 1,200 ($285 USD) and RM1,000 ($237 USD). Additionally, households with monthly income between RM 3,000 ($712 USD) and RM 4,000 ($950 USD), payment would increase from RM 800 ($190 USD) to RM 900 ($214 USD). Single individuals are not left out either, and would receive RM 450($107 USD) instead of RM 400 ($95 USD) if they earn less than RM 2,000 ($475 USD) a month. Village heads and Muslims clerics would also benefit from an increase in allowance.

Najib stresses that this change in policy is because the peoples’ economy is as important as the public economy. “The overall happiness and welfare of the people is [a] key objective,” he added.

Besides trying to consolidate the support of his traditional allies, Najib is also trying to win the hearts of the masses. To do so, he announced his intention to “extend tax relief to all taxable income earners to include smartphones and internet subscriptions.” However, the GST rate that most Malaysians are eagerly against would remain as it is.

Can Najib commit to his new budget?

In response to criticisms that the 2017 budget is aimed at gaining political trust and sympathy for the upcoming general election, Najib said, “[this] is a commitment budget… others may put short-term political gain first, but this government will not.”

Consequently, many Malaysian’s aren’t taking the PM for his word, as this is not the first time Najib has turned to dispensing money in exchange for votes. Each time before the general election would take place, the Najib government would promise various developmental projects and schemes intended to improve the peoples’ livelihoods. But each time after the end of the election, the government holds out on making good on their promises, and at times they never come to fruition.

Corruption in Malaysia is not a new phenomenon, but government transparency has become so bad in recent times that the Malyasian government is being labelled as a kleptocracy. The turning point of this crisis was Najib’s involvement in one of the largest and disconcerting political scandals in Malaysian history – the 1MDB scandal. The 1MDB scandal has sent shockwaves around the world; however nothing with regard to corruption was mentioned during Najib’s 2017 budget speech.

This, according to opposition party member, Lim Kit Siang, is Najib’s “denial syndrome at its worst”.

Can Malaysian’s forgive Najib for his incompetence? 

Former Prime Minister Mahathir Mohamad has predicted that Najib’s incompetency would soon result in him being ousted by the people.

The former PM’s comments are not a baseless claim. Mahathir said that the amount involved in the 1MDB scandal is now close to RM 4 billion ($950 million USD), rendering Najib the most incompetent Finance Minister Malaysia has had to date.

Moreover, Mahathir also pointed out that Najib has little control over Malaysian affairs, and acted in ways that undermined the independence of Malaysia and generated racial tension between the different ethnic groups within the country. Perhaps the biggest fault in Najib’s government is the presence of too many Ministers in the Prime Minister’s Department, which has led to increased bureaucracy and lower productivity.

Given the current situation in Malaysia, many Malaysians believe that the country is progressing towards a “failed state”, which Najib defined as the failure of a government to implement and carry out its basic functions.

In response to public outcry against Malaysia becoming a failed state, Najib has said that “these characteristics do not exist in Malaysia and this government will never allow our country to become a failed state”.

Najib is aware that the upcoming 2018 general elections will be his biggest electoral test. If he wants to stay in power, he needs to change the current perception held by the people and improve the economic situation in Malaysia. Accordingly, in light of Najib’s involvement in the 1MDB scandal and his mismanagement of the country, he has introduced his 2017 budget, as an attempt to recover the massive support he has lost, so he can win the 2018 general elections.