Economist Barjoyai Bardai of Universiti Tun Abdul Razak said the government could start by moving away from short-term solutions such as cash handouts.

Meanwhile, his counterpart at the Malaysia University of Science and Technology, Geoffrey Williams, proposed that subsidies for some products be discontinued under a reformist budget.

Barjoyai said longer term solutions such as the setting up of an endowment fund were more viable.

He proposed that the government establish such a fund under Budget 2023 for the people’s benefit.

“A substantial allocation for such a fund will offer long-term social protection for the benefit of all Malaysians. This will really give us a big bang,” he told FMT Business.

Barjoyai said the government could set up a foundation with a capital injection of RM500 billion. The funds could then be channelled for investments.

“Unlike the protection provided by the Social Security Organisation, returns from the endowment fund’s investments could be channelled towards social protection of households, including for loss of income, as well as towards education, healthcare and relief from natural disasters,” he said.

Williams said the government should take advantage of the end of special measures put in place during the Covid-19 pandemic by presenting a smaller budget instead of a laundry list of projects aimed at key voter groups.

“The savings should be passed back to the people to enable them to spend more of their own money as they choose, rather than having the government spend it for them,” he told FMT Business.

He said exciting proposals would include ending subsidies on specific products, brands and companies, which is a recipe for high transaction costs and corruption.

Instead, the government should focus on a reform of its Bantuan Keluarga Malaysia scheme to incorporate a universal basic income programme involving regular monthly payments for low-income groups via a cash transfer mechanism, he said.

Williams also urged the government to undertake a full reform of higher education financing, saying that the National Higher Education Fund Corporation had only two years’ worth of funds in its coffers presently.

“The government must also help the people build their retirement income, for instance, by increasing the tax exemption for voluntary Employees Provident Fund (EPF) contributions,” he said.

The government had allowed four EPF savings withdrawals during the Covid-19 pandemic, which saw RM145 billion paid out to contributors.

He also said the tax and duties system across the board needed reform, calling for the government to put an end once and for all to the debate as to whether the goods and services tax (GST) or sales and service tax (SST) should prevail.

Budget 2023 will be tabled in the Dewan Rakyat on Oct 7, three weeks ahead of the originally scheduled date of Oct 28.