KUALA LUMPUR (Oct 12): The effectiveness of implementing Budget 2027 depends on how promptly the government disburses aid and how well the federal government, state governments and local authorities coordinate their efforts to reduce the bureaucratic burden on businesses, said an economist.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said this was because bureaucratic red tape remained a risk, given that aid distribution involved various ministries and agencies at the federal level, in addition to state governments and local authorities.
He said all these elements formed part of an ecosystem that needed to be closely monitored to ensure smoother business operations.
"So, this requires the government machinery, whether at the federal, state or local authority level, to show empathy towards the business sector because businesses constantly face various challenges such as rising raw material costs, labour costs and compliance costs.
"The cost of complying with these regulations certainly forms a hidden cost that can affect business performance," he said on the Bernama TV programme Fokus 15 in conjunction with Budget 2027, titled "Driving the Economy, Enhancing People's Well-Being", on Monday.
Therefore, he said the three levels of government needed to demonstrate good coordination to ensure smoother business operations and a more competitive business and industrial sector in the future.
Commenting further, Mohd Afzanizam said Budget 2027 was pragmatic as the government had taken into account the difficulties faced by the people and businesses through various assistance measures and tax reductions.
He said the government remained committed to making fiscal discipline the main pillar of its fiscal policy, targeting a reduction in the fiscal deficit to 3.3 per cent of gross domestic product (GDP) in 2027 from 3.6 per cent in 2026.
"If we look at the amount allocated by the federal government, it is worth RM459 billion, and this is higher compared with the allocation in 2026, which was around RM444 billion.
"So I think that approach is pragmatic and addresses the issues faced by households and businesses, while still maintaining fiscal discipline in managing the government's finances," he added.
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