Budget focus likely on targetted assistance, development spending

KUCHING: The 2024 State Budget is expected to focus on two main aspects, according to economist Dr Dzul Hadzwan Husaini.

The Universiti Malaysia Sarawak (Unimas) academic said this is because the approach adopted by Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg focuses more on balancing the distribution of state revenue directly to the people and developmental expenditures for the economic and social sectors in Sarawak.

“During the Covid-19 pandemic, Abang Johari used state revenue to directly assist the people by providing cash assistance and business grants. However, as we transition into the endemic phase, Abang Johari is seen to continue with the same method, but this direct assistance is now more focused on educational purposes.

“The Sarawak government is expected to provide assistance in facilities and educational tools to Sarawakian students, aligning with the current digitalisation of the education system, where digital needs are crucial for students.

“In the field of development expenditures, I expect that the Premier will further strengthen the urban and rural infrastructure.

“The development of the Autonomous Rapid Transit (ART) and coastal highway projects will undoubtedly receive attention. These projects are crucial as a paradigm shift to advance the overall economy of the people,” he told New Sarawak Tribune ahead of the budget tabling on Monday.

Dr Dzul hoped the state government will further enhance health and sustainability in state spending and revenue as Sarawak’s income comes from four main categories namely tax revenue, non-tax revenue receipts, federal grants and repayments.

He said tax revenue is the highest contributor, with oil, gas and commodity products being the largest contributors.

“Dependence on continuous income from this sector in the long run is not healthy and sustainable.

“The state government needs to restructure the state revenue system to make it more sustainable and healthy. This economic framework should be cyclical. If the spending cycle is not effective and efficient, our economy is not sustainable.

“This means that the government needs to adopt a cyclical economic model where every expenditure generates returns for the state government, not for others, including the federal government. These returns can be used directly by the state government to assist the people,” he added.

He cited the ART as an example where its services will be enjoyed by the people here, including foreign workers and high-income groups.

“The faster the state’s economy grows, the higher the revenue from ART due to widespread use in the market. This revenue can be used for the development of the social and economic sectors.

“If targeted assistance continues, it is sustainable because it is supported by the revenue from domestic cyclical economic activities.

“The same goes for the coastal highway in the future. If there is political will to impose toll charges, this will make state revenue more sustainable,” he said.

He added that the use of the highway will not only be for the middle-class residents of Sarawak but also for the wealthy, corporate sector, and external residents who migrate and travel to Sarawak.

“It is unfair for them to enjoy these facilities for free. If this can be done, I believe Sarawak will be able to restructure new, more sustainable revenue sources. This revenue can be distributed in the form of monthly cash assistance to needy groups and also cash assistance to students.

“In essence, every government expenditure should be healthy, sustainable, and responsible,” he said.