The budget included precautionary and proactive measures in managing national revenue and expenditures, while ensuring that the well-being of the people remained a priority.
Najib said the recalibr
ation is necessary due to a slump in global oil prices and a slower economic growth in the United States and China. When Budget 2016 was unveiled last October, the crude oil price was at US$48 (RM203) per barrel. However, the current price per barrel stands at US$30 (RM127), a sharp fall since the Budget was presented.Highlights.
- The 2016 global economy expected to be more challenging and economic growth expected to fall from 3.6% to 3.4%.
- Malaysia is not alone in facing global economic challenges. Current crude oil price stands at US$3o (RM127) per barrel.
- Latest developments indicate that the global economy is at a very volatile stage and requires a proactive move to revise Budget 2016.
- Malaysia is not in recession neither in a technical recession.
Eleven recalibrated measures announced.
1. EPF contributions by employees to be reduced by 3%. This is expected to increase private sector spending by RM8bil.
2. Tax relief of up to RM2,000 to those with income RM8,000 a month or lower. Two million taxpayers to benefit.
3. To reduce cost of living, the Government to liberalise APs for agricultural products including coffee beans and meats.
4. Domestic Trade, Cooperatives and Consumerism Ministry is to increase enforcement and action against unethical traders.
5. 30% of contributions to the human resource development (HRD) fund to be utilised for skills training, including those who are unemployed.
6. MyBeras programme to be introduced until Dec 2016. Each hard-core poor family will be given 20kg of rice every month.
7. The Government will update the management system of foreign workers, with levies clustered into two categories, not including foreign maids.
8. Government will exercise prudent spending on supplies and services and to continue with grant rationalisation.
9. Development budget to focus on projects and programmes that place the people first, have high multiplier effect and reduce imports.
10. Develop financial institutions and Government venture capital funds are to increase allocations by RM6bil for benefit of start-ups and SMEs.
11. GLCs are urged to implement initiatives to reduce the income gap between senior management and workers, to be monitored by the Economic Planning Unit.
Najib said that the recalibrated budget was based on the approach of "shared responsibility" by certain segments of society. Benefit measures such as the 1Malaysia People's Aid (BR1M) will continue and the present rate of the Goods and Services Tax (GST) will be remain at 6%.
Malaysia would not resort to imposing capital controls and pegging the Ringgit, such as was done during the 1997-1998 financial crisis.
"The Government remains committed to maintaining the fiscal consolidation measures for 2016, which is to achieve a GDP target of 3.1%. Our country's debt will be reduced and will not exceed 55% of the GDP."
/theSTAR 28-01-2016
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