Malaysia passes largest ever budget

15 Dec 20

Malaysia’s parliament has narrowly passed its largest ever budget for 2021, in what is being seen as a confidence vote for the government.

The 322.5bn ringgit (£59.6bn) budget, which is even higher than the 313bn it expects to have spent by the end of 2020, was passed by 111 votes to 108.

Input from opposition parties was sought for the first time in Malaysia’s history amid the pandemic, as prime minister Muhyiddin Yassin tried to keep his relatively new government –in office since March – in power.

“This budget is for the prosperity of all of us,” said finance minister Tengku Zafrul Aziz.

“My heartfelt thanks to everyone who supported the 2021 budget. It was crafted for the people especially in facing these challenging times.”

Although revenue is expected to recover slightly next year, it will still remain well below its 2019 level.

The deficit will reduce from 6% of GDP this year to 5.4% in 2021.

Measures introduced in the budget include increasing welfare payments, raising tax relief on healthcare costs and a pay rise for frontline workers during the pandemic.

It also includes an extra 20bn ringgit (£3.7bn) for the government’s Covid-19 relief fund, which will go towards health service costs, financial aid schemes and vaccine purchases.

The budget will now need approval from the senate before being submitted to the king for royal assent.

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