This article first appeared in The Edge Financial Daily on October 27, 2017

PUTRAJAYA: The national budget for 2018, which will be announced later today, will prioritise the interests of the rakyat, said Prime Minister Datuk Seri Najib Razak.

Calling it a mildly expansionary budget, he said this budget will show Malaysians that the government is a responsible government which will prioritise the interest of the people, create high-impact programmes and enhance spending efficiency.

“This government is a government that is consistent. What people need is a government that gives them a sense of certainty as to what are the economic policies of the country,” he told a pre-budget briefing with news editors yesterday.

Najib said Budget 2018 will maintain the transformation agenda and direction of the economy, moving the country forward in terms of sustainable growth.

“It has to be sustainable and predicated on both the capital economy, as well as the people economy. I've always said these two are the important components ... these two components are intertwined, cannot be separated.

“Because if you do not have growth, if you don't have confidence of the global markets, if the ratings agencies don’t give you a good report card, it will affect the rakyat,” the prime minister explained.

“At the same time, the rakyat deserve the benefits ... the fruits of economic growth and progress because ultimately it is about the people. Those two are intertwined and whatever we do, it has to be responsible, credible and sustainable,” he said.

He noted that Budget 2018 will be inclusive and will benefit all Malaysians, including the middle- income group, known as M40.

He said the government will look into areas where it can create new sources of growth for the country, new wealth for the people which will cut across challenges, including those posed by the fourth industrial revolution.

The digital economy would not be left out either, as the budget will include incentives for this sector. Incentives for the automation of industries will be included, however, he noted that certain industries are in need of manual labour.

Najib also said the government will be monitoring closely growth in income and more importantly, the equitable distribution of income.

“We will also be concerned about regional development to make sure there is a fair distribution of projects in the region, and even states controlled by the opposition will receive [a] fair share of the budget,” he said.

Some other areas that the budget will address, said Najib, are issues concerning women, youth, the bumiputera agenda, the Indian blueprint and also the concerns of the Chinese community.

He reiterated that it will be a “very comprehensive budget”.

Nevertheless, Najib said that the government will keep to its commitment of fiscal consolidation. This year the fiscal deficit is expected to be at 3% of gross domestic product, while 2018’s deficit will fall below the 3% mark.

He said the government’s finances have limitations and cannot be expected to go on the basis of pump-priming the economy, but it has to be looked at within the context of what is affordable.

“When you pump-prime, the deficit goes up and national debt goes up,” he said.

Meanwhile, Najib said Malaysia has achieved the push to make the private sector the engine of growth for the country, where public sector investments now only amount to one-third of total investment, whereas the private sector makes up two-thirds of it. Secondly, the government has become less reliant on oil revenue, reducing its contribution from 41% to 14%.

“The fortunate part is that in the early days, the government saw the need to diversify,” he said.

Budget 2018 is based on an average crude oil price of US$50 per barrel, similar to 2017.

Najib will table the budget in Parliament today at 3.30pm.