1. Macroeconomic (DBF 106) Assignment 1 : ComicGovernment Expenditure

2. Daddy, whats with that face?Im reading newspaper. Theres no jokes, so why should I laugh?Hehehe, ang ry lettew. 3. So whats up dad?The Federal government will record a lower 4% fiscal deficit of GDP in 2013. With a higher tax revenue of RM 159.2 billion., the Federal Revenue is expected to reach RM 208.7 billion whereas total expenditure is projected to reduce by 1.1% lower fiscal deficit. Non-tax revenue is expected to be RM 49.5 billion, a 9.6% reduction- mainly due to lower investment income returns, petroleum royalties income and the Malaysia-Thailand Joint Authority. 4. Honestly daddy, I would like to know about this kind of thing. But, I dont really understand, what are you talking about just now. Are you joking?Im home. What are you guys talking about?Hello mommy. Actually I have no idea whats daddy talk about. Something about tax revenue. I would like to know. Whats that suppose to mean mommy. 5. Actually darling, its all about the role of government. A government can obtain revenue from many sources. That thing you say just now is some of the sources of revenue. The major portion of the revenue is from taxes.Okaaaayyy..? So they just receive the revenue from tax whatsoever? Do they spend anything? 6. Of course they spends. There are two types of government expenditure. One is operating expenditure and other one is development expenditure.Seriously daddy? What is so important the tax rate and governme nt expenditu re in the economic s?Broadly speaking, fiscal policy is the use of taxation and government spending for the purposes of macroeconomic goals. 7. When governments increase their spending, crowding out can occur government spending reduces available funds and increases the cost of capital, leading many businesses to abandon expansion projects. Likewise, when a government spends in excess of receipts (a deficit) and must borrow funds to finance that deficit, crowding out can occur.Likewise, taxation causes problems of its own. Taxes shift the equilibrium for goods and services away from its optimal level, therefore reducing consumer and producer surpluses. This reduction is called the deadweight loss and it basically represents the net benefit that is being sacrificed by society because of the presence of the tax. 8. So, you understand now darling?NOO!! Why is this so complicated ???Its okay, you still a kid though. No need to take this seriously. Its absolutely amazing when a kids like you interested in this. Im proud of you daughter.Okay 9. Ermm, one more thing. I just want to know, what is the government expenditure?Another question? Why lahh?Sorry 10. Okay, let me see. Like I mentioned just now, there are two types of expenditure. Operating and Development.What with the operating, daddy?Operating expenditure is the government expenditure allocated to cover the expenses of operating and administering government departments. It consist of emolument, pensions and gratuities, debts, service charges, supply and service, subsidies and other type of expenditures. 11. Really? Wow. And how about Development expenditure?If Im not mistaken, it is a government expenditure for investment purposes to improve facilities in the basic physical infrastructure. This expenditure is focused on development projects that can boost economic growth.Wait, I think I know this. It consist of Defence and Security, Economic Services, Social Services and General Administration. Am I right ? 12. Yeahh. Good girl.Do you know that economic service comprise agriculture and rural development, trade and industry, transport, public utilities and other service including communications, feasibility studies and mineral resources? While general administration includes the Department of Public Services (JPA), Inland Revenue Department (LHDN), Royal customs and Excise, Department of Statistics, and the ministry of Foreign Affairs. 13. Ive read that before. I know about the social service. The social service comprise education, health, housing and social and community services.Yeahh, we proud to have a daughter like you.Yeap. Now, off to bed. 14. Yeahhh, Im fantastic !