The Edge Markets
21 August 2018
Govt targets 2.8% fiscal deficit this year, says Lim
KUALA LUMPUR (Aug 21): The government is committed to long-term fiscal consolidation and aims to cut the fiscal deficit to 2.8% of gross domestic product this year, says Finance Minister Lim Guan Eng.
He said the target would be met through various measures, including cancelling and postponing unimportant low-multiplier government expenditure by RM10 billion.
“The government is confident of saving more money in the future, especially as the government makes its procurement more transparent by the wider use of open tender process,” he said in his speech at the signing of a memorandum of understanding (MoU) between Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP) and United Overseas Bank (Malaysia) Bhd.
SJPP is an administrator and manager of credit guarantee schemes under the Finance Ministry.
Furthermore, he said the need to optimise government expenditure calls for a true public-private partnership that splits the developmental cost between the two, as this would help the government provide public infrastructure without having to spend too much of public resources.
He said public-private partnerships are one of many measures to be discussed by the Public Finance Committee (PFC), which would be tasked to strengthen public finances by outlining the government’s medium-term fiscal plans.
“The PFC would also help the government deal with the RM19.4 billion unpaid Goods and Services Tax refund, whereby, in order to manage the government’s fiscal position, disbursements will be phased gradually beginning next year.
“Payments for small businesses will be prioritised, as they are likely to be most affected by the delay in the refund,” he added.
Following the signing of the MoU, small and medium-sized enterprises (SMEs) can obtain collateral-free loans of up to RM1 million through the SJPP-UOB BizMoney financial solution, with SJPP guaranteeing up to 70% of the loan through its Working Capital Guarantee Scheme and Services Sector Guarantee Scheme.
The SJPP-UOB BizMoney financial solution provides flexible repayment tenures of 18, 24, 36, 48 or 60 months, with interest rates starting from 0.54% per month. — Bernama