How important is the public spending in promoting economic growth in Malaysia. Will Malaysia be able to sustain the economic boom if cuts the size of the government? Is there any long run relationship between government expenditure and GDP? If there is, is it positive or negative? Does the growth of government expenditure promote economic growth in Malaysia? Or does the causality run in the reverse direction? Time series data are likely to shed light on these issues. A modern approach to these issues is lacking for Malaysia. This paper attempts to fill this void.