Malaysia to Cut Entertainment Spending as Budget Curbs Widen

December 31, 2013 Leave a comment

Malaysia to Cut Entertainment Spending as Budget Curbs Widen

Malaysia will reduce the entertainment budgets of ministers and freeze applications to renovate government offices as Prime Minister Najib Razak widens efforts to cut public spending.Eleven measures to curb public spending expenditure will start on Jan. 1, the Bernama news service reported yesterday, citing a statement by Najib. The government will reduce entertainment allowance of ministers and deputy ministers by 10 percent and that of certain senior government officials by 5 percent to 10 percent.

Having earlier given handouts and pay increases for civil servants to woo voters, Najib is adjusting his focus to improve government finances and avert a credit-rating downgrade. In October, he scrapped sugar subsidies and unveiled plans for a consumption tax in 2015.

The latest measures to cut spending include reducing the use of event-management companies, and decreasing the awarding of souvenirs and the amount of food and drinks at some government events, Bernama reported. Some civil servants will only be allowed to travel on economy class on domestic flights, while electricity utility costs at all government offices will be reduced by 5 percent, the report said.

It didn’t specify how much money the measures are expected to save.

Malaysia’s fiscal deficit will shrink to 3.5 percent of gross domestic product in 2014 from 4 percent in 2013, meeting targets set previously, the finance ministry said in an October report.

To contact the reporter on this story: Winnie Zhu in Singapore at wzhu4@bloomberg.net

Filed under Macro Trends

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