KUCHING, Nov 11: There is no point for the state government to keep stacking up money in reserves while the people are poor and suffer economically.
Kota Sentosa assemblyman Chong Chieng Jen pointed this out when debating the Supply (2021) Bill 2020 at the State Legislative Assembly (DUN) Sitting today.
“This is definitely not the time for a surplus budget. The state government has got its priority all wrong to maintain a surplus budget when the economy is facing a recession.
“The national economy has suffered a 17.1 percent contraction in Q2 (second quarter) this year and the forecast for Q3 (third quarter) is also in the negative growth. We are expecting to be officially in recession,” he told the august House.
In Sarawak, Chong claimed there was contraction across all sectors, with manufacturing seeing 6.9 percent contraction, mining (2.9 percent), construction (9.5 percent) and agricultural (1.5 percent) while trade was expected to drop 20.9 percent, export (24.8 percent), import (12.1 percent) and unemployment (5 percent).
If the state government still failed to appreciate the severity of the economic downturn, he urged the ministers to go around and ask the traders.
“Eateries and coffee shops which used to be packed with customers are now having empty chairs and tables everywhere.
“All these point to one hard fact, the economy is bad. The worrying thing is that the worst has yet to come,” he stressed.
With the bank repayment moratorium ending by the end of September, Chong stressed that there will be a squeeze in the disposable income when people start to repay bank loans.
With the past few months of various stages of Movement Control Order (MCO), he added that most companies have used up their reserves and many were on the brink of closing down.
Once these businesses close shop, he cautioned that retrenchment will follow suit.
“Surplus budget is by nature contractionary, not expansionary. Our economy needs an injection of government expenditure to stimulate, sustain and revive.
“A surplus budget is effectively a withdrawal from the system and not helpful to revive the economy,” he said.
Therefore, Chong called upon the government to increase spending to save the state’s economy.
