KUALA LUMPUR, Oct 11 -- Finance Minister Lim Guan Eng opined that policy flexibility is crucial for the government to ensure domestic growth will remain robust to continue raising the people's living standards.

As a trading nation, he cautioned Malaysia would not be spared from the impact of a synchronised global growth slowdown.

"The government will monitor all external developments closely and be ready to act, if necessary, to ensure sustainable economic growth," he stressed.

In a report titled Fiscal Outlook and Federal Government Revenue Estimates 2020 released by the Ministry of Finance today, Lim said the government remained committed to consolidating its fiscal deficit and debt level relative to the gross domestic products.

Thus, measures to improve the government's fiscal health are required to achieve macroeconomic stability and support long-term national development agenda.

The Tax Reform Committee has been set up to make a comprehensive review of the country tax system by rationalising various tax incentives, simplifying tax administration, and by exploring new sources of sustainable revenue without burdening the people.

The Debt Management Committee has been established to consolidate the management of all debt, guarantees and liabilities of the federal government.

As part of the institutional reforms, Lim noted the government would enhance its zero-based budgeting process in allocating resources while strengthening its open tender process.

"High-impact programmes and projects will be prioritised, while institutional reforms will help to cut down on leakages," he noted.

Lim pointed out the Government Procurement Act would be introduced in 2020,  aims at promoting good governance in managing public spending.

The government is also formulating the Fiscal Responsibility Act, which is expected to be tabled in 2021, to strengthen fiscal stability, transparency and accountability within the public sector.

-- BERNAMA