- IEA points out limited investment due to high spending on free benefits
- Budget introduces free university fees, primary healthcare, and sanitary pads
- Urges focus on investment for future growth
The Institute of Economic Affairs (IEA) is warning against the 2025 Budget’s heavy dependence on social interventions.
The institute suggests that this approach could yield both positive and negative outcomes.
In its assessment of the 2025 Budget, the IEA argued that it is more prudent to allocate a larger share of the nation’s resources today to generate greater national income, which can later be distributed more fairly.
However, it cautioned that prioritizing equity may lead to a smaller national income in the future. While maintaining existing free benefits such as Senior High School education, nursing trainee allowances, teacher training allowances, LEAP, and the National Health Insurance Scheme (NHIS), the 2025 Budget also introduces new measures like free first-year university fees, free primary healthcare, and free sanitary pads for schoolgirls.
The IEA acknowledged the social and economic benefits of these interventions but warned that they impose a significant strain on the budget, leaving less room for more productive investments. The IEA also pointed out that with the budget heavily focused on employee compensation and free services, there is limited investment spending, which could stifle economic growth.
