Malaysian govt needs backup plan in case Petronas payout falls through, say some MPs

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KUALA LUMPUR – Several MPs have voiced concerns over Malaysia’s Budget 2023 delivered on Friday, saying it hinged on the expectation of a large dividend from national oil firm Petronas.

Referring to the budget’s expectation of a RM35 billion (S$10.7 billion) dividend to the government from Petronas, former second finance minister Johari Abdul Ghani from the ruling Umno party said the government needed to have a contingency plan in case this did not work out.

“What happens if Petronas is unable to pay the government RM35 billion?” he said on TV3’s post-budget analysis telecast live on Friday.

This concern was echoed by Parti Keadilan Rakyat MP Fahmi Fadzil.

“RM35 billion is expected in 2023 – will that really be the case? We will have to wait and see,” he told The Straits Times.

“I am also concerned whether the government will be able to sustain the amount of subsidies given this year and in years past, especially for food and cooking oil, going forward, and how are they going to pay for all of this.”

He added: “You can tell this is an election budget from the amount of goodies they have given away.”

“Whether it’s civil servants or bachelors, more than eight million households will benefit,” he said, referring to bonuses and pay rises for civil servants and cash handouts for certain segments.

“Plus, there’s the reduction in income tax for certain tax brackets.”

Democratic Action Party MP Chan Foong Hin welcomed a tax reduction for micro, small or medium enterprises (MSMEs) from 17 per cent to 15 per cent on the first taxable RM100,000.

“This will give MSMEs some breathing space as they focus on building back their business after two years of braving the onslaught of restrictive Covid-19 control measures,” he said.

However, he questioned if the budget would even have legs.

“Since there has been strong speculation of early dissolution of Parliament, will this budget even see the light of day? Or will they just be sweet nothings that Barisan Nasional intends to dangle in front of voters for the upcoming election?”

Umno information chief Shahril Hamdan said the budget was not just about “goodies”.

While acknowledging that Budget 2023 allocated the highest cash aid in history, he said it did not forget long-term goals that were not purely populist in nature.

Targets towards becoming carbon neutral and exemption of approved permit fees for car importers bringing in electric vehicles were some examples he cited.

Sabah, the third-most populous state in Malaysia, was allocated RM6.3 billion – a 20.45 per cent increase from last year – which includes upgrades to the Eastern Sabah Security Command security enforcement agency in Lahad Datu.

“Sabah welcomes the federal government’s commitment to continue emphasising the state’s development,” said Sabah Chief Minister Hajiji Noor, who is also Bersatu’s Sabah chief.

“It is a continuity of the momentum of the nation’s recovery from the pandemic, which is now in the endemic phase, and the state government welcomes such an inclusive budget,” he said.

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