PETALING JAYA: Budget 2024 must entail approaches to alleviate cost of living pressures, initiatives to help small and medium enterprises (SMES) towards a self-sustaining path, and economy-boosting measures capable of inspiring investors’ confidence, say business groups.

       The upcoming federal budget must also synergise the government’s New Industrial Master Plan 2030 (NIMP 2030) aspirations and Madani Economy framework to empower the people and steer the economy, said the groups.

       Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) treasurer-general Datuk Koong Lin Loong said Budget 2024 should first and foremost be about strengthening the country’s fiscal sustainability and governance.

       “Budget 2024 must send a message to the rakyat and to foreign investors on how Malaysia is strengthening its economy and the ringgit,” he said when contacted yesterday.

       On what could be done differently this time, Koong said recommendations on targeted subsidy and rationalisation must be considered to avoid wastage to government coffers, and aid geared towards those in need, such as B40 households, must use targeted, accurate and updated data and not be mere cash handouts.

       “Budget 2024 must also address the high cost of living,” he said, adding that the government’s NIMP and Madani Economy aspirations, which Budget 2024 is premised on, must also re-emphasise encouraging Malaysia’s domestic direct investment (DDI).

       In line with this, SMEs must be assisted, he said.

       StarPicks

       Building and designing for a vibrant community

       Koong added that the government must also think of ways to broaden the country’s revenue, for example by modifying and reforming the Sales and Service Tax (SST).

       “Even though the government does not wish to look at the Goods and Services Tax (GST) because of political sensitivity, I think we should reform the SST to be much more transparent and broader.

       “We cannot keep relying on direct taxes as the world is moving towards indirect taxes, which in fact will help the government increase revenue. We need a balance between direct and indirect taxes,” he said.

       Small and Medium Enterprises Association of Malaysia (Samenta) chairman Datuk William Ng said Budget 2024 must ease off the “crutch” approach and instead help SMEs be more self-sustaining.

       Thus, a gradual transition to a more design- and innovation-oriented economy is crucial to supporting the government’s NIMP 2030 and Madani Economy aspirations, he said.

       “Budget 2024 must reflect this direction by increasing allocations to help SMEs be more self-sustaining while easing off the ‘crutch’ approach that has created a whole generation of ‘grantpreneurs’ and even associations that keep demanding more grants each year.

       “We cannot continue the ‘grant, grant, grant’ narrative, which benefits a small number of businesses at the expense of building a sizable number of SMEs that are independent and are able to operate at a wider span of the value chain,” he said when contacted yesterday.

       He added that if the government must provide a cash handout to the rakyat, such as the B40 and M40 groups, then such a handout must be made usable only with local retailers and businesses to enable the cash to remain locally.

       On Samenta’s Budget 2024 wish list, Ng said it is based on three core principles, namely fostering independent SMEs, upgrading SMEs in the value chain, and narrowing the financing gap for competitive SMEs.

       Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai said the initiatives under Budget 2024 should focus on strengthening the competitiveness of the industry, especially the SMEs, in terms of mitigating the impact of the global economic slowdown and inflationary cost pressures, enhancing productivity by increasing digitalisation, and supporting the green growth and sustainability agenda.

       “In 2022, there were approximately 2.72 million people employed in the manufacturing industry in Malaysia.

       “The aspiration is to once again increase the manufacturing sector’s contribution to gross domestic product (GDP) and to further increase job opportunities in manufacturing, especially highly skilled jobs,” he said.

       However, at the same time, Soh noted that the industry faces new challenges as a result of the current global economic slowdown, such as meeting their digital transformation goals towards more technology adoption and net zero carbon emission targets.