KUALA LUMPUR (Oct 27):  An economist has called for a reprioritising of expenditure to address the imbalance between the development expenditure and operating expenditure in the country’s Budget.

Socio-Economic Research Centre executive director Lee Heng Guie said that while the federal government’s revenue is expected to grow 6.4% to RM239.9 billion in 2018, the development expenditure is estimated at RM46 billion suggesting a "disappointing" 0.1% growth.

“Operating expenditure has been on the rise for two consecutive years now, but the development expenditure to gross domestic product ratio seems to be going downhill,” he said.

He added that the shrinking of the operating surplus to an average of RM3.6 billion per year in 2008-2018, from an average of RM13.9 billion per year in 2001-2007 underscores the lack of fiscal commitment to restrain operating expenditure.

Lee was one of the speakers at a forum on Budget 2018 jointly hosted by the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) and the Chinese Chamber of Commerce and Industry of Kuala Lumpur and Selangor (KLSCCCI).

Lee said a contribution system should be implemented for civil servants as one of the measures in addressing the imbalance in the government's operating expenditure.

Citing the Employees Provident Fund (EPF) as an example, he suggests a phased implementation of a defined contribution of public pension, instead of a fund civil servants are plainly being “entitled to”.

He said the decision to raise the minimum pension for retired civil servants to RM1,000 per month may in the longer term prove to be strenuous to the government’s expenditure.

Budget 2018 also provides a host of other measures for civil servants, including second time-based promotion, retirement benefits, increased days for maternity leave, flexible working hours, and unrecorded leave for umrah.

On another matter, Lee said there should not be any annual increment in the 1Malaysia's People's Aid (BR1M) payments as it may give an off-setting effect on the subsidy cut over the years.

In Budget 2018, the government announced that it is maintaining the BR1M payment at RM1,200 for next year.