Source: The Sun Daily
The government, which lost some RM30 billion in revenue from the oil and gas sector due to the slump in prices, is looking at ways to stimulate the economy, said Second Finance Minister Datuk Johari Abdul Ghani.
He declined to elaborate on the specific areas targeted as the government is still engaging with some focus groups.
"We also have to be very mindful about anything that we want to do. We have to look at our capacity, the government's ability to have the revenue to do what we need to do because we cannot simply do something that continues on borrowing games.
"This is where we need to strike a balance. In any budget, at the end of the day, we need to look at what will be our estimate on our revenue. From there we work out how we are going to spend the money," Johari told reporters at a press conference after the 31st National Economic Briefing yesterday.
He said the information and feedback will be given to the prime minister, who will announce the strategies at the presentation of Budget 2017 in October.
The loss of revenue from the oil and gas sector is expected to affect the government's spending power.
"We have lost about RM30 billion of our revenue from this sector. To a certain extent it will affect us in terms of our ability to spend money on the rakyat, infrastructure and so on because it is a huge amount. Nevertheless, our economy is well diversified and we're not relying only on oil and gas," Johari said.
He highlighted the need to reduce reliance on foreign workers, especially in the services sector such as hotels, malls and restaurants. He said these businesses can reduce reliance on foreign workers by offering reasonable salaries and increasing prices, and emphasised the need to continue increasing the minimum wage.
Commenting on the impact of the US Department of Justice's civil lawsuits on investments into Malaysia, Johari said he has not seen any foreign investors pulling out at this moment.
"In terms of foreign direct investments, if you compare last year and this year, it will drop a little but that is expected because the global economy has slowed down," he said.
Johari said the sale of 1Malaysia Development Bhd's power assets under Edra Global Energy Bhd to China General Nuclear Power Corp and the joint venture with Iskandar Waterfront Holdings and China Railway Group Ltd to develop Bandar Malaysia are signs of investor confidence in Malaysia.
"In fact, that (sale of power assets) is positive to the country because that shows confidence from foreign investors; they are willing to come here and invest close to about RM17 billion."