In 2023 our GDP was about US$400 Billion (World Bank)
In 2024 the GDP was about US$425 billion (dont know who's projection).
US$425 billion = RM1,882 billion or RM1.9 TRILLION.
In June 2024 the gomen's cumulative national debt (jumlah hutang kerajaan) was RM1,200 Billion or RM1.2 TRILLION or 63% of our GDP.
- For this year's Budget (2025) the total gomen revenue was RM340 billion.
- Total expenditure was RM421 billion.
- Hence the shortfall / deficit was RM81 Billion.
- So the hutang kerajaan increased by another RM81 billion.
Here is some basic calculation (rule of thumb ok but you will get the idea).
1. For 2025 the deficit of RM81 billion is about 24% of gomen revenue of RM340B. If the gomen revenue increased by 24% then there will be NO DEFICIT of RM81 billion.
Again by rule of thumb (because it does not work in this way) if the size of the GDP increases by 24% from RM1.9 TRILLION to say RM2.4 TRILLION, then the gomen revenue should increase by 24% and cover that deficit of RM81 billion.
2. Here is another rough calculation. This one focusses on corporate taxes from corporate activity. Meaning regular businesses, with books, proper records, bank accounts etc.
Lets say our GDP can suddenly jump and increase by about 1.4 times and become RM2,700B or RM2.7 TRILLION.
This means another RM2.7 TRILLION worth of sales and economic activity are added in our economy by Malaysian corporations. This means the number of cars and trucks on the roads, bulldozers and excavators at construction sites, apartments, condos, highways, LRTs, factories, hotels, resorts, shopping complexes, supermarkets etc all increase by 1.4 times. The number of jobs in the country increases by 1.40 times. The entire business activity of our country increase by 1.4 times.
Then we roughly calculate the amount of corporate taxes alone that can be collected from an extra RM2.7 TRILLION worth of GDP.
Lets say our businesses are very efficient and they can generate on average 10% profit before tax. So from RM2.7 TRILLION extra GDP, the taxable income is RM270 Billion.
Say the tax rate (average, rule of thumb, corporate tax plus sales tax plus donno what other tax) = 30%.
So from the extra RM270 billion taxable income, the tax fellows can collect 30% taxes = RM81 Billion extra tax income. Which will cover that deficit of RM81 billion in the 2025 Budget.
So just to cover the deficit of RM81 Billion in the 2025 Budget alone our GDP must increase to more than RM2.4 Trillion (from the present RM1.9 TRILLION).
What about the rest of the accumulated gomen debt of RM1,200 Billion or RM1.2 TRILLION?
Again by rough rule of thumb, our GDP must multiply to about 14 times more than its present size to generate enough tax revenue to pay off all the hutang kerajaan of RM1.2 TRILLION.
So Tuan-Tuan the gomen's finances are quite screwed. And this will have an effect on the whole country.
But where did all the money go to? Sekolah rosak, hospital tak cukup doctor, equipment rosak, hospital tak cukup ubat. And then RM100 million for Palestine, reconstruction of Gaza etc.
But here is the real super whammy. When (not if) the Sarawak fellows get their cut of the oil and gas revenue then our syarikat minyak is going to lose a substantial portion of their annual revenues. Some suggest about 30% but we dont know for sure. And the oil earnings contribute a huge chunk to the gomen's revenues. Meaning the gomen's deficit is going to increase. The gomen is going to have to borrow even more money.
Already the syarikat minyak has said that this year there will be no salary increments for their staff, no bonuses and they may have to let go about 12,000?? of their people.
Now, if our economy is managed properly and our GDP had expanded by another 24% then the gomen would have collected about another RM81 Billion in tax revenue to cancel the deficit for 2025.
But the gomen is not trying their best to grow the economy. The Dasar Ekonomi Bebal is still in place with its choking quotas, monopolies, oligopolies, franchises, 30 year concessions, licenses, permits, restrictions, cartels etc. They can only generate RM340 billion in revenue for 2025.
Now they are going to lose about a third of the oil revenues to Sarawak.
So in a situation where the Dasar Ekonomi Bebal only knows how to shrink the size of the cake, the gomen is increasing the taxes imposed on the economy. The Sales Tax has been increased 33% (from 6% to 8% is a 33% increase). Other taxes are going up. Quit rents and assessments are going up.
The gomen is choking the economy more and more which prevents the economy from growing as fast as it is capable of. As the Missy once said, 'You cannot make the people rich by taxing them'.
Anywhere in the world wealth and productivity is relative to your neighbours. Our currency is falling like a stone compared to our neighbours and trading partners. (Please do not compare with Zimbabwe or Myanmar). Our per capita GDP is decreasing relative to those with whom we were at par or close.
That loss in oil and gas revenue to Sarawak is going to be a huge nail in the coffin.
Tuan-Tuan orang Melayu, please wake up. Your well being is so dependent on gomen expenditure. On tax revenues. You need to really increase the number of geese which can lay golden eggs.
Please forward this view of mine around your friends and community. And talk about it. Discuss things objectively and honestly.