Budget 2007

And as for the budget 2007...nothing to shout about. It looks like the Gov't servants will benefits a lot. They will get 2 months bonus (most of them), cola and higher pension for the retired. I am more interested in Individual tax relief, but there is non. Only increase in tax allowance for purchase on books & computers. Sin tax (Alcohol & Cigerattes) has also increased as expected -which is a good move. No more exam fees for all secondary schools - some relief here.

After the announcement of the Budget 2007 - the market is not even moving, the stock market which is usually "sensitive" to the budget announcement is NOT reacting. WHY?

All these tell us that, there is very very minimal impact the Budget is going to have on our economy and that the budget is NOT attractive enough to "arouse" domestic economy.

From an economist point of view, it is either the market is slowing down (dues to several factors - Gov't fiscal policy & monetary control, interest rates, Gov't external policies and the social-Political climate) or we are heading for another recession. The cycle is BACK, in 1987, 1997 next year is 2007. Question is: are we heading for another recession? Can our economy takes another beating? Can we pull through 2007? One thing is obvious, the recent budget does not seems to stimulate much activities in our domestic economy. Though it did address certain issues on the Finance Bill 2006, foreign tax, Corporate sector tax (lower by 1% if I am not wrong), re-defining "investment company" pertaining to tax, 9th M'sian Plan - all these are mostly for the Corporate sector.

So for income earners, or employees - there is nothing to shout about.

Now The Sweetener: Well, to counter-act the "not so attractive" budget, the Polis is giving a reduction in all summonses issued. The Polis said, "to lessen the burden on the rakyat...."

That much I can say about the budget 2007.

Personally, for 2007, my advise is be prudent, unemployment will rise (too many VSS, MSS, retrenchment), prices of goods will rise (inflation), petrol will rise (another round), interest rate will rise, domestic spending will fall, BANKS will TIGHTEN it's squeeze. In short, there will be "too many people" chasing after "too little money."

We will go into a mild "stroke" - our economy I mean. We could go into an inflationary recession if our economy could not recover from the mild "stroke". We will (wait and) see what the Gov't could do to tackle all these issues-in the most efficient manner - for the benefit of all Malaysians in the spirit of "Malaysia Boleh".