Let’s zoom in Budget 2017

 |Oct 22, 2016
A round-up to examine the salient points said by PM Najib during tabling Budget 2017.
A round-up to examine the salient points said by PM Najib during tabling Budget 2017.

Prime Minister Najib Razak steadfastly unleashed a prudent and wellbeing of the people’s Budget 2017 yesterday evening at the Parliament house.

Najib prudently allocated a thorough budget to all the relevant ministries, agencies, sectors and community.

Amid the world economic uncertainty, Najib and his finance team should be praised for the well-balanced budget that covers all aspects.

For the past 60 years, Barisan Nasional government has successfully sustained the GDP growth at an average of 6% per annum.

A total of RM260.8 billion Budget 2017 has been tabled for the people.

Under the development expenditure, the economic sector will receive the highest share of RM25.9 billion, followed by social sector with RM12.2 billion.

The security sector is allocated RM5.3 billion and the general administration receives RM2.5 billion.

The government expects to achieve the fiscal deficit target of 3% of GDP in 2017, compared with 3.1% this year.

In reality, the government is always committed to implement an optimum budget for the people through prudent spending despite global economic uncertainties.

During his speech, Najib illustrated the definition of prudent spending by the Government is similar to a “sensible father or head of family manages his finances to meet household needs”.

Najib further exampled if previously “we could afford expensive toys, however, in the present situation we could continue to do so but within our means”.

I would rather admire Najib’s plan to encourage individuals, especially graduates to venture into entrepreneurship whereby an adequate budget is given for them to venture into own business.

Najib also pointed out that the diversifying the government’s sources of revenue, particularly to reduce the dependency on oil and gas sector related revenue from 41.3% in 2009 to 14.6% in 2016.

As a result of further diversification of our economy, the growth had been resilient and sustained despite the recent decline in oil prices by almost 50%.

As an alternative the government’s bold measure to implement Goods and Services Tax (GST) had diversified the sources of revenue.

The people should realise that there are only 2.1 million income tax payers out of 14.6 million of the country’s total workforce.

In addition, with the recent fall in oil prices worldwide, it is estimated a loss of government’s revenue by RM30 billion from income tax, corporate tax, royalty, Petronas dividend and Petroleum Income Tax.

Hence, the people must understand and be grateful with the implementation of GST.

With GST, the government is able to support its expenditure amid limited resources.

Najib also transparently announced that RM 30 billion GST collected as of Oct, 19 this year.

On the subsidy rationalisation, the oil subsidy in 1995 stood at RM123 million, constituting only 0.24% of the overall national budget.

At its peak in 2012, it reached RM24.8 billion or 9.8% of the overall national budget.

Overall, the inefficient bulk subsidy system clearly burdens the government’s financial position and causes leakages.

As such the government has replaced it with a targeted subsidy system, benefitting those who are really in need.

Najib highlighted that based on the purchasing power parity (PPP), Malaysia is now an upper middle-income country, surpassing many countries not only in Asia but also throughout the world.

Malaysia’s PPP per capita has increased from USD23,100 in 2012 to USD26,891 in 2015.

Najib also stressed that a nation’s economy is highly related to perception, as without confidence there will be no investment to drive the economy.

If our own people, undermine and sabotage our economy, we are bringing down our own nation.

Therefore, accusations by irresponsible internal and external parties must be stopped!

On the total approved foreign investment was more than RM28 billion during the first half of 2016, an increase by 32% compared with the same period last year.

Najib shared that during his official visit to Germany last month, the business community expressed their interest to continue to invest in Malaysia as they are confident with the government’s sound policies, meeting their expectations.

In the coming week Najib will be heading to China and hope to attract more investment into the country

Both examples Malaysia as a preferred destination for investment shooting down the negative detractors.

Najib in his speech also quoted that according to Kaushik Basu, Chief Economist and Senior Vice President of the World Bank…

“As many nations suffer because of falling commodity prices, Malaysia stands out for having transformed itself from a poor, commodity-exporting nation to a modern diversified economy”.

 

Five principles in Budget 2017

Najib has well categorized the Budget 2017 to five principles.

 

  • National integration in forming a nation state. Our ethnic diversity is an essential asset in the past, present and future.
  • Preserves sovereignty, upholding the Constitution and laws as well as national security.
  • This government is cohesive and stable as well as work as a strong team;
  • This government has clear direction, systematic planning as well as holistic, efficient and structured implementation plans.
  • Uphold the national ideology, Rukun Negara. As such, in governing the country, the government has been firmly upholding the universal Islamic philosophy and principle of Wasatiyyah.

This philosophy comprises moderation, balance, social justice, fairness and excellence.

This means that we are always striving for excellence, not just average and complacent, what more to settle for mediocrity.

In winding up Budget 2017 speech, Najib stressed that “A warrior never retreats” and vows to continue to do the best and care for the peoples’ wellbeing.

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Ramani has been a writer and analyst for the past 10 years believes in fair news reporting.