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QUESTION 3 (25 MARKS) Govt to spend RM1.2 billion to extend contracts for 14,000 medical, dental officers, pharmacists KUALALUMPUR, July 26- The government has agreed to extend the contracts of about 14,000 medical doctors, dentists and pharmacists for a period of two years (or 7,000 per cohort/year) which will involve a financial implication of RM1.2 billion, said Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz. This is a follow-up to the government's decision for contract-appointed medical officers, dental officers and pharmacists to be offered contractual appointments for a period of two years after completing the compulsory service period to ensure continuity of service and preparation for specialist studies. "The government is very concerned about the demands of the contract-status health workers group and is aware of their contribution and role as the front line of health in providing the best health services to the people, especially in the COVID-19 pandemic situation," he said in Parliament today. Tengku Zafrul said the government has also agreed to extend the appointment on a contract basis for a maximum period of four years, medical officers and dental officers who are accepted to pursue specialist studies during the first two-year contract period. He said the move is to ensure that the officers concerned successfully complete their respective specialist studies. He also said the Prime Minister had instructed the Health Ministry and relevant agencies to draw up a comprehensive and inclusive plan comprising immediate action, short-term, medium and long-term plans to enable the direction for the medical services to be drawn up. https://www.mof.gov.my/enews/press-citations/govt-to-spend-rm1-2-bin-to-extend-cont racts-for-14-000-medical-dental-officers-pharmacists Source: Adapted from Ministry of Finance (MOF), 26 July 2021 (a) "The government has agreed to extend the contracts of about 14,000 medical doctors, dentists and pharmacists for a period of two years (or 7,000 per cohort/year) which will involve a financial implication of RM1.2 billion, said Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz" Page 6 of 9 CITY UNIVERSITY Date: SEPTEMBER 2021 Course: BBCE3013 Malaysian Economy Based on the statement above discuss the pros and cons when government decide to extend the contracts from the concept of government expenditure. (10 marks) (b) As government spending is a component of GDP, the more the government spends the more the economy is stimulated, and cause to higher budget deficit. Discuss THREE (3) contributing factors in budget deficit occurring. (10 marks) (c) There are variety of functions of the public sector such as policy employed, budget, sources of revenue and ways to reduce budget and improve the productivity. In your opinion, discuss why low productivity or inefficiency in the public sector result in low revenue productivity