How much is being allocated for Budget 2016?
Budget 2016 allocates RM267.2 billion to be spent, with a projected federal government revenue collection of RM225.7 billion.
How will GST affect the budget?
The Prime Minister announced that more medicines will be zero-rated under Budget 2016. It is also claimed that the GST will boost government revenue by RM39 billion, as compared to RM27 billion in the initial half of 2015. According to Datuk Seri Najib Razak, had the previous sales and services tax been maintained, collection would have only been RM18 billion as opposed to the GST revenue of RM39 billion.
Will minimum wage levels see a change?
The monthly minimum wage will be increased to RM1000 from RM900 in Peninsular Malaysia and to RM920 from RM800 in Sabah, Sarawak and the Federal Territory of Labuan. This applies across the board except for areas involving domestic service.
Are there any notable tax reliefs?
Children providing for their parents can now claim tax relief amounts of RM1500 for each parent, so long as each parent does not earn more than RM2000 per month and is over 60 years of age.
What about affordable housing?
175,000 new houses will be built with an allocated RM1.6 billion for affordable housing projects. First-time buyers can expect assistance in financing deposits under the First House Deposit Financing Scheme, which has been allocated RM200 million. Perumahan Penjawat Awam 1Malaysia also plans to build 100,000 houses priced between RM90,000 and RM300,000 by 2018.
How will the budget affect people living and commuting to KL?
To reduce congestion in the increasingly dense areas of Kuala Lumpur, a whopping RM900 million has been proposed for the Jalan Tun Razak traffic dispersal project. This is set to be a collaboration between public and private partnerships.
There will be a reduction in subsidies for certain forms of transport, such as KTM trains.
What about BR1M and other support for lower income groups?
RM100 million will be allocated to eRezeki and eUsahawan programmes, projected to benefit 100,000 people from the income group making up the “bottom 40%. E-Kasih recipients earning below RM1000 will receive RM1050 under the BR1M (Bantuan Rakyat 1 Malaysia) initiative. Spending allocation for BR1M will be increased to RM5.9 billion in 2016, a RM1 billion raise from 2015.
However, it was reported that other forms of support have been hit: for example, funding for the Poor Students’ Trust Fund has been cut to just 5% of last year’s budget.
What do supporters say?
WIth “prospering the rakyat” being the theme for Budget 2016, Defence Minister Hishammuddin Hussein praised its efforts in boosting incentives for Malaysians in light of the unstable economic landscape. Rohani Abdul Karim, Minister for Women, Family and Community Development, believes that the allocation for the Kuala Lumpur Women’s and Children’s Hospital is a positive step in the nation’s progress.
Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi highlighted how provisions were being made for the middle class in the form of lower tax rates, resulting in greater take home pay. He also praised the allocation for the home ministry, as “by increasing the assets of the security forces, there will be omnipresence of the police located at crime hotspots”.
What do critics say?
Tony Pua, MP for Petaling Jaya Utara, has stated that Budget 2016 does not cater to the welfare of Malaysians and fails to reduce the national deficit. Suggesting a lack of transparency in its tabling, the Malay Mail Online reports Pua stating that “the finance minister forgot to mention the fact that these projects are funded by off-budget financing which isn’t reflected in the official budget”.
With the plummeting value of the ringgit, Selangor Menteri Besar Mohamed Azmin Ali pointed out that the budget failed to address fiscal growth measures. He also criticised the GST, finding that it “imposes a greater tax burden on the ordinary folk in order to fund the financial mismanagement of the leaders”.
The matter of 1MDB was left untouched, and this was roundly criticised by the opposition. “It shows he’s trying to cover up. Not even a word on 1MDB. He wasn’t addressing our concerns,” The Malaysian Insider quotes Datuk Seri Dr Wan Azizah Wan Ismail as saying.
Justine Tan
Read the full budget speech here.
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