It is well known that GDP in

It is well known that GDP in Malaysia has been risen substantially over a
thirty years. One of the reason that make GDP increase over a year and a year
is the government expenditure. Government
Expenditure defines the purchase or payment of goods and services that are
not provided by the private sector but it is important for national welfare.
Those expenditure including emoluments, subsidiaries, general administration,
public investment, and other expenses.

 

Economic analysis

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In the
article, we know that Malaysia has set Budget 2018 with the amount of
RM280.25billion which is 7.5% higher than the previous year RM260.8billion. Government
get the money through borrowing and revenue for Budget 2018. 14.4% of the
Budget 2018 is come from borrowing by using of government assets as advance and
the rest of 85.6% will be come from revenue that government earn, examples,
indirect tax which is the tax that government charge from us when we make a
single payment, direct tax, which is calculated in percentage that charge from
our salary, and the last one would be non-tax revenue which includes petroleum
royalties, investment income from Bank Negara Malaysia, Khazanah Nasional Bhd
and motor licences and foreign worker permits.

According to previous year’s GDP, expenditure from private sector always
be the primary driver of growth with private investment and consumption growing
8.9% and 6.8% respectively. However, expenditure from public corporation tends
to decline in 2018 due to lower capital outlays. Government allocate the budget
into two ways, a total of RM234.25billion for operating expenditures and
RM46billion for development expenditures. Compare to last year, operating
expenditures is 6.5% higher in 2018, while the development expenditures
increase slowly by 0.1%. Under operating expenditures, government use
RM79.15billion (28.2%) of the RM234.25billion for emoluments which have the
biggest portion among the expenditures. Second large expenditures come with the
supplies and services expenditures 12% (RM33.62billion) which showing an
increase of 3% compare to last year while refunds and write-offs will increase
10.7% to RM888million in 2018. Malaysia’s debt service charges is going to be
increase 7% from RM28.87billion for 2017 to RM30.88billion due to the huge
amount of interest on borrowings. Other large expenditure, including retirement
charges, has been allocated with RM24.55billion and subsidies expenditures will
be seeing the largest increase in allocation in 2018, up 15% to RM26.54billion
from RM23.09billion in 2017. Grants and transfers to state governments and
grants to statutory bodies will be increased by 0.8% to RM8.02billion and 2.6%
to RM13.1billion respectively. Finally, for the operating expenditure, 11.2%
(RM31.48) will put under other expenditure including grants to statutory bodies
such as public universities, trade and investment promotion agencies.

            Of the amount allocated for
development expenditure, RM26.34billion will go to the economic sector,
RM11.72billion to the social sector, RM5.21billion to security and
RM2.72billion to general administration. The social sector showing a decrease
of 3.3% in 2018 to RM11.72bilion. The biggest cut is from education and
training, which will be 11% lower at RM5.26billion compared to 2017’s
RM5.9billion. However, housing will see a 34.1% increased to RM1.17billion and
health, 24.7% to RM1.91billion. As for the economic sector, only the energy and
public utilities, and agricultural and rural development will get a larger
pieces of the pie with a 9.2% increase to RM2.75billion and 4.4% increase to
RM2.52billion respectively.

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