Wednesday 24 Apr 2024
main news image
  • Civil servants’ emoluments to exceed RM82 billion
  • Civil servant pension will cost RM27.1 billion  
  • Govt to spend RM24.2 billion on subsidies and social assistance
  • Higher development expenditure of RM56 billion

Civil servants’ emoluments to exceed RM82 billion

Civil servants’ emoluments are projected to increase by 2.6% to RM82 billion in 2019 and RM82.6 billion in 2020 primarily due to annual salary increments.

Emoluments are the largest component of the Government’s operating expenditure (Opex). The big sum covers payment of wages and salaries, allowances and other remuneration for Federal Government’s civil servants of about 1.4 million, according to the Ministry of Finance’s 2020 Fiscal Outlook and Federal Government Revenue Estimates.

Of the 1.4 million civil servants, 67.5% of them are working in the Ministry of Education and Ministry of Health — mainly teachers, doctors and nurses.

Civil servant pension will cost Govt RM27.1 billion in 2020

As for the retirement charges, it is estimated to be higher at RM26.6 billion in 2019 and to increase to RM27.1 billion in 2020 due to annual increments and to accommodate the rising number of pensioners and beneficiaries.

The number of pensioners will increase to 853,000 in 2019 and 874,000 in 2020.

“In view of escalating pension commitment and concerns over the sustainability of the present scheme, the Government is exploring options for a more robust scheme to efficiently manage future pension obligations,” said the report.

In 2020, the Government’s Opex is estimated to be higher at RM241 billion or 14.9% of GDP, an increase of 7% from RM225.3 billion allocation in 2019 after excluding one-off tax refund allocation of RM37 billion.

The bulk of the Opex is channelled to emoluments which constitutes 5.1% of GDP, followed by supplies & services 2.4%, debt service charges 2.2%, retirement charges 1.75 as well as subsidies and social assistance 1.5%.

Govt to spend RM24.2 bil on subsidies and social assistance – including RM5 billion on BSH – in 2020

Subsidies and social assistance is estimated to register RM24.2 billion, up 2.5% from RM23.6 billion in 2019.

The allocation is mainly for Cost of Living Aid (BSH) and welfare assistance; fuel and agriculture-related subsidies; toll compensation; as well as education-related assistance including scholarship, said the Ministry of Finance’s 2020 Fiscal Outlook and Federal Government Revenue Estimates.

The Government will provide BSH assistance amounting to RM5 billion in 2020, which is similar to the allocation for 2019, according to the report.

The allocation of RM5 billion is lower compared with RM6.4 billion in 2018 because of the restructuring of recipients’ criteria and assistance amount effective 2019.

About 3.6 million households continue to receive the restructured BSH of which households with special needs children receive higher assistance and better benefits as compared to the previous BSH programme.

Fuel subsidies are estimated to be lower with the expectation to reinstate the managed-float system for RON95 and diesel in line with the implementation of targeted fuel subsidies programme.

Higher development expenditure of RM56 billion in 2020

Federal government will allocate RM56 billion for development expenditure in 2020, which is higher than the allocation of RM53.7 billion in 2019.

“The higher allocation is mainly for accelerating implementation of programmes and projects in supporting the growth momentum and strengthening of the long-term capacity of the economy,” said the Ministry of Finance in the 2020 Fiscal Outlook and Federal Government Revenue Estimates report.

A large bulk of the development expenditure, or RM53.5 billion, is in the form of direct allocation while the balance of RM2.5 billion is for loans to State Government and Government-linked entities.

In addition, the allocation is also provided for rationalisation plans of FELDA and Lembaga Tabung Haji as well as higher debt servicing commitment of SRC International Sdn Bhd.  

Of the 2020 allocation, RM53.2 billion is allocated for 4,744 ongoing projects, while RM2.8 billion is for 722 new projects.

The economic sector remains the largest recipient at 55.4% of the development expenditure, followed by social (26.9%), security (11.7%) and general administration (6%) sectors.

The transport subsector remains the largest beneficiary constituting 21.8% of total development expenditure or RM12.2 billion.

Projects under the subsector include public transportation and highways, such as MRT2, Klang Valley Double Track and Pan Borneo Highway; expansion of airports in Sandakan and Kota Bahru, as well as maintenance and upgrading of roads, bridges, ports, and railways.
Expenditure under the social sector is estimated at RM15.1 billion or 26.9% of total development expenditure.

Of this, RM7.9 billion is set aside for the education and training subsector which includes the rebuilding of dilapidated schools nationwide and improving school infrastructure.

      Text Size