Govt committed to restoring sound public finance

KUALA LUMPUR: The government is committed to restoring sound public finance by enhancing its fiscal framework, particularly through institutional reforms, public expenditure review and tax policy reforms.
The Finance Ministry said these reforms must be carried out in a comprehensive and inclusive manner with full support from society.
"In this regard, effective engagement with all stakeholders is a key success factor," the ministry said in its Fiscal Outlook and Federal Government Revenue Estimates 2019 report released in conjunction with the 2019 Budget presented in Parliament today.
The report said it was timely for the government to undertake fiscal reforms proactively, given the magnitude of the adverse impact of the global financial crisis in 2007 and 2008 on countries with high debt levels.
"The experience on the conduct of fiscal policies and reforms of other countries provided a valuable reference for the government in adopting and adapting best practices with regard to fiscal reform initiatives.
"The reforms will strengthen the government's fiscal position, thus creating fiscal space to build up economic resilience, particularly during a crisis," it added.
The report also said several fiscal reforms were already implemented including rationalising subsidies, streamlining of government agencies and increasing transparency in government procurement.
It said the reforms enhanced government spending efficiency such as moving from blanket subsidy to targeted subsidy.
"The subsidy rationalisation reined in expenditure for subsidy and social assistance from RM39.7 billion in 2014 to RM22.3 billion in 2017.
"Nevertheless, the subsidy is only a small subset of fiscal policy levers and there are other areas of fiscal policy that are worth revisiting for the purpose of fiscal reform," the report added. — Bernama