ETP, higher revenues could swell 2011 Budget

By Lee Wei Lian, The Malaysian Insider

KUALA LUMPUR, Sept 23 — The government may be tabling a bigger budget for 2011 as it plans to allocate funds to kick-start the Economic Transformation Programme (ETP) projects, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said today.

He also said that the government could potentially afford bigger budget allocations as it is expecting high revenues next year. He did not specify, however, if the increase was for the operational or development expenditure portion of the budget or both. This year’s budget was 11.5 per cent smaller than 2009 largely due to a 13.7 per cent cut in operational expenditure.

“Maybe higher,” Husni told reporters when asked about the size of 2011 federal budget allocations. “Because we are expecting revenues to increase compared to this year so we are able to give more. The National Key Result Areas and National Key Economic Areas are new initiatives and adding to the expenditure we normally give out annually.”

He added that although the private sector is expected to invest the bulk of the US$444 billion (RM1.4 trillion) worth of ETP projects, the government is aiming to provide eight per cent of the total funding to “facilitate the private sector.”

“We are expecting global economic growth to be slower in the second half of this year and also next year and we believe with the National Key Economic Areas initiatives, by the second half of next year we will be able to pick up higher growth.”

Husni said the government expects gross domestic product growth this year to be in the region of six to seven per cent or higher, and is targeting six per cent growth for next year. The economy grew at 9.5 per cent during the first six months of 2010.

The federal minister acknowledged that there was some scepticism over whether the private sector would be investing the required funds, but attributed this to the ETP being a new initiative.