The Institute for Democracy and Economic Affairs (IDEAS) said budget consolidation should not rely solely on spending cuts.

Its CEO Tricia Yeoh also pointed out that government revenue was “already low and trails comparative peers”.

“With government revenue expected to continue declining this year due to moderating crude oil prices, the government should consider revising the personal income or sales and services tax.

“A conversation around the return of a form of consumption tax will also need to urgently happen in parallel with a revised social safety net,” Yeoh said in a statement.

She called for the social protection system – including instruments such as pension schemes, labour policies and the social safety net – to be strengthened.

Yeoh said the government must re-balance priorities in government expenditure, especially in the health sector which was “chronically underfunded”.

“The budget needs to address critical infrastructure and service needs in healthcare and education.”

The country, she said, spent “relatively less” compared with neighbours Thailand and Singapore on healthcare, despite increased allocations to the health ministry in recent years.

The sum set aside for the ministry increased to 10.4% from 9.1% of the total budget from 2019 to 2022.

In order to address critical issues of talent shortage and insufficient infrastructure capacity, Yeoh said the country’s current public health expenditure, which was 3% of the GDP, should be raised to meet the World Health Organization’s recommended level of 5%.

As for education, IDEAS highlighted the need for a nationwide study to investigate the impact of Covid-19 school closures on learning loss among students, particularly in marginalised and vulnerable groups, and to prioritise resources on addressing these impacts.