KUALA LUMPUR, March 28 ― Putrajaya must consolidate its finances in the medium term to ensure better fiscal capacity in the long term as a result of the RM250 billion stimulus care package announced by Prime Minister Tan Sri Muhyiddin Yassin yesterday.
Senior Minister Datuk Seri Azmin Ali told talk show programme Bicara Naratif today that the prime minister and the Cabinet had taken a bold step with the biggest stimulus package in the nation’s history but was left with no choice other than to protect the interest of the people.
“We (the Cabinet) came up with this based on the government’s fiscal capability. After we had studied and discussed the matter, we were confident that the package will not burden federal government finances on a short-term basis and as a temporary measure.
“However, the government must consolidate its finances in the medium term to provide for fiscal space in the long term,” he said.
When he was told that some detractors had lambasted the stimulus package and compared it to the efforts of other nations, Azmin, who is the International Trade and Industries Minister said that Malaysia has its own unique needs in comparison to other countries.
He explained that the critical reasoning behind the stimulus care package was to prioritise the Malaysian public ― especially those who have lost their income during the movement control order (MCO) period.
The Gombak lawmaker explained that even though Putrajaya’s package amounts up to 17 per cent of the country’s gross domestic product (GDP) and can create a bigger deficit, the average Malaysian who are suffering right now will not understand nor care about such macro-economic issues.
“The prime minister’s priority is not the question of deficit that we are discussing today. His priority is to help the people. People like Makcik Kiah who are facing hardship will not care or understand that the government has a fiscal deficit.
“So, we will focus on the public first. After that we can focus on the long-term fiscal solution. I am confident we can do this,” said Azmin.
He also explained that a large amount of the RM250 billion is aimed at supporting small and medium enterprises’ (SMEs) sustainability and cashflow.
Azmin also gave a reminder that the current economic situation faced by the government does not stem from the Covid-19 and its subsequent MCO alone but also on the very volatile global economy which has been impacted by multiple headwinds.
Among the ongoing problems facing the world’s market that he mentioned include the trade war between superpowers China and the USA as well as the unheard-of Brent Crude oil price of US$30 per barrel.
He explained that the Cabinet had taken all these matters into account before deciding it needed to recalibrate the nation’s economy to face these challenges and had taken the bold step with the stimulus care package.
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