Revised 2016 Budget

Prime Minister Datuk Seri Najib Razak announced the following measures under Putrajaya’s recalibration of Budget 2016.

  • Malaysia is not in recession or in technical recession; weak ringgit doesn’t reflect Malaysia’s true position
  • Najib says he’s confident Msia will grow at 5pct GDP this year, with fiscal deficit at 3.2pct. An announcement will be made next month.
  • Falling oil prices required 2015 Budget to be revised, Msia’s oil revenue fell close to RM14b
  • In 1997-98, Malaysia experienced economic downturn affecting growth by -7.4 per cent. This led to layoffs, rising inflation. Economic downturn in 2008-09 was due to US subprime crisis and rapid rise of world oil prices reaching USD$130 per barrel
  • Measures taken were formulated after taking into account views and consultations with various parties
  • Recalibration of 2016 Budget based on two thrusts – ensuring continued economic growth & preserving rakyat’s welfare, says Najib

Eleven restructuring and adjustment measures to be taken as part of Budget recalibration:

  • EPF contributions by employees to be cut by 3% from March this year until December 2017. Contribution rate by employers, however, remains the same.  Najib said the reduced contributions would boost spending by an estimated RM8 billion.
  • Tax exemption of RM2,000 for Malaysians earning RM8,000 and below for the financial year of 2015, a move that would affect two million tax payers.
  • Effective immediately for new housing projects, sale of all houses up to RM300k limited to first-time buyers only
  • Introduction of MyBeras programme will see registered hardcore poor families receive 20kg of rice a month
  • FAMA to open MyFarm outlets which will sell food at 5-20pct cheaper than market price
  • To ease cost of living, govt to liberalise APs for agriculture produce including coffee and meat
  • Domestic Trade, Cooperatives and Consumerism Ministry ordered to increase enforcement and action against unethical traders.
  • 30% of contributions to the human resource development fund to be utilised for skills training, including those who are unemployed.
  • The Government will update the management system of foreign workers, with levies clustered into two categories, not including foreign maids.
  • Government will exercise prudent spending on supplies and services and to continue with grant rationalisation.
  • Development budget to focus on projects and programmes that place the people first, have high multiplier effect and reduce imports.
  • Development financial institutions and Government venture capital funds to increase allocations by RM6bil for benefit of start-ups and SMEs.
  • GLCs urged to implement initiatives to reduce the income gap between senior management and workers, to be monitored by the Economic Planning Unit.