Malaysia revised budget 2016 to GDP growth 4.0%~4.5% from original 4.0%~5.0%

PUTRAJAYA: The Government’s recalibrated Budget 2016 reinforces its pledge to look after the people in times of economic challenges.

The adjustments – reflected in 11 measures to be undertaken – largely serve to cushion the impact of the increase in the cost of living.

In presenting the adjustments yesterday, the Prime Minister said the recalibration and restructuring of Budget 2016 centred on the need to ensure the economy remained on a strong growth trajectory and to protect and safeguard the welfare and wellbeing of the people.

“These measures are proactive, transparent and realistic, in tandem with the current global economic challenges,” Datuk Seri Najib Tun Razak said in his 46-minute address to a packed audience comprising ministers, senior civil servants, economic stakeholders, foreign missions and representatives of non-governmental organisations.

Also present were Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah, Chief Secretary to the Government Tan Sri Dr Ali Hamsa, Treasury secretary-general Tan Sri Dr Irwan Serigar Abdullah and Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz.

Najib said the recalibration was within the range of initiatives and allocation of the Budget approved by Parliament last year, and emphasised that Malaysia was neither in economic nor technical recession.

He noted that other countries were also affected by the slowdown, with world trade anticipated to be moderate from 4.1% to 3.4% and economies such as the United States, Brazil and China expected to grow at a slower pace.

“This trend proves that we are not alone in facing the global economic challenges. Other countries too, are affected by the uncertainties,” he said, adding the drastic decline in world crude oil prices had a significant effect on the nation’s revenue.

The strengthening of the US dollar also affected the economy and the ringgit, which depreciated by 11.3% from RM3.77 in June last year to RM4.25 as of Wednesday, said Najib.

Other currencies also affected are Brazil’s Real which depreciated by 23.2%, China’s yuan (-5.7%), Cana­dian dollar (-11.3%), Russian ruble (-29.3%) and Singapore dollar (-5.6%) against the US greenback.

“In fact, the ringgit is underva­lued and does not reflect the true economic fundamentals. However, the ringgit is expected to better reflect the strength of the economy when the global financial market stabilises and oil prices recover to more reasonable levels,” said the Prime Minister.

Sources: The Star  mazwin nik anis, foong pek yee, ho wah foon, joseph kaos jr, adrian chan, tho xin yi, tashny sukumaran, victoria brown, nurbaiti hamdan, akil yunus, hanis zainal, joash de silva, andrebecca grace rajaendram

Malaysia can withstand oil shocks

Meeting the media: (from left) Irwan, Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar and Bank Negara governor Tan Sri Zeti Akhtar Aziz at the 2016 Budget recalibration forum

PUTRAJAYA: Malaysia can withstand sustained oil price decline to US$25 (RM105) per barrel.

According to secretary-general of Treasury Tan Sri Mohd Irwan Serigar Abdullah, the various scenario analyses conducted by the Government showed that Malaysia would still be able to sustain its economic growth and its recalibrated Budget 2016 would remain on track as long as crude oil prices remain above US$25 per barrel.

He, however, acknowledges that if oil prices were to go any lower than that, there will be great challenges, not only for Malaysia, but also for the global economy.

“In our estimation (for Budget 2016 revision), we even went to US$25 per barrel and we find that the budget will still be intact ... that is not a problem because we have a lot of measures in place,” Irwan said.

“But if it goes further down to US$20 or US$15 per barrel, it will be a world recession! Every oil-producing country will face a problem,” he told reporters at a forum after the Budget 2016 recalibration announcement here yesterday.

The Government had been forced to revise its Budget 2016 three months after tabling it in Parliament due to the continuous decline in global crude oil prices.

The recalibrated Budget 2016 saw the Government lowering its average-price assumption for Brent, which is the international oil benchmark, to US$30-US$35 per barrel, compared with US$48 per barrel under the original Budget 2016 when it was unveiled in October last year.

Under the recalibrated Budget 2016, the Government’s revenue is expected to decline by 3.5%-4.2% to RM216.3bil-RM217.9bil, compared with the originally estimated RM225.7bil, while its total spending (operating and development expenditure) will be cut by 3.0%-3.6% to RM255.7bil-RM257.2bil from the initially proposed RM265.2bil.

“Most of the forecasts by analysts and research institutes expect oil prices to average at US$30-US$40 per barrel this year. But we have taken a more conservative estimate of US$30-US$35 per barrel.

“If it goes below US$30 per barrel, we can still sustain economic growth; it won’t affect the budget that much, given the various mechanisms we have at hand,” Irwan said.

Brent crude was traded at around US$33.50 per barrel yesterday. Last week, prices of the commodity fell to a 13-year low of around US$28 per barrel.

Irwan said the Government was expecting additional income from various sources to act as “buffer” if oil prices declined further.

He pointed out that the Government had yet to add this additional income into its revenue projection for the revised Budget 2016.

Among the new measures expected to generate extra income for the Government were the sale of telecommunications spectrums and greater reinforcement to reduce leakages in duty-free islands such as Labuan.

As for managing its expenses, Irwan said the Government would continue to optimise and slash unnecessary spending to manage its operating expenditure; and prioritise high-impact projects and programmes for the country’s growth and people’s well-being, while postponing non-critical projects to manage its development expenditure.

“In terms of reprioritising our development expenditure, what we are going to do is to go further into project-implementation planning.

“There are some projects that will be shifted to beyond 2016 but some important projects that will have an impact on people such as rural roads, schools and hospitals will continue to be implemented,” Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar said.

Wahid, together with Irwan and Bank Negara governor Tan Sri Zeti Akhtar Aziz, were the three panellists at the forum yesterday.

Essentially, Wahid said, the Government would continue to pursue its overall fiscal consolidation targets.

On that note, the fiscal-deficit to gross-domestic-product (GDP) target for 2016 remained unchanged at 3.1% under the revised budget.

Malaysia’s GDP growth, however, had been revised to a narrower range of 4.0%-4.5% for this year, compared with 4.0%-5.0% under the original Budget 2016.

“We have detected moderation in domestic demand,” Zeti said. “The key to support domestic demand is to boost private consumption by putting money into the pockets of consumers through income transfers,” she added.

She pointed out that the newly introduced measure to allow employees’ EPF contribution to be reduced by 3% between March 2016 and December 2017 was one of the ways to boost consumer spending.

However, she stressed: “These measures are only temporary because retirement savings are important.”

By Cecilia Kok The Star

Main points of Budget 2016 revision

KUALA LUMPUR: Datuk Seri Najib Tun Razak had on Thursday announced the revised Budget 2016 in the face of the fall in crude oil prices which has affected the government's revenue.

The Prime Minister said the government revenue would be based on Brent crude oil at US$30 to US$35 per barrel when compared with the US$48 when it prepared the Budget 2016 last year.

He also said the economy was expected to grow at a slower pace of between 4% and 4.5% when compared with the earlier forecast of 4% to 5%.

Later, Ministry of Finance Secretary-General Tan Sri Dr. Mohd Irwan Serigar Abdullah said the recalibrated Budget 2016 remains on track even if Brent crude oil prices were to deteriorate further to US$25 per barrel

Main points of Budget 2016 revision:

• Revised Budget 2016 will enable the government to save RM9bil
• Govt will maintain the Goods and Services Tax
• Fiscal deficit target at 3.1% of GDP
• Govt revenue to be based on Brent crude oil at US$30 to US$35 per barrel from US$48
• Trimmed GDP growth outlook for 2016 to 4%-4.5% from 4%-5%
• Govt debt to be reduced to 55% of GDP
• Govt will not peg the ringgit
• Govt to reduce EPF contributions for employees by 3% from March 2016 to December 2017, contributors from employers unchanged Govt to give special tax relief of RM2,000 to individual tax payers earning RM8,000 a month for year of assessment 2015
• Malaysia to restructure foreign labour system
• Govt to give special tax exemption for some selected income groups
• Govt to allocated RM5bil for the Higher Education Fund (PTPTN)
• Govt will liberalise the control on import quotas or approved permits for eight agricultural produce for temporary period. It includes raw coffee beans, buffalo meat, beef and mutton
• To enhance the efficiency and amount of tax collection, govt will double compliance and auditing efforts on tax evaders
• Govt to give special consideration on relaxation for penalty on taxpayers to encourage them to come forward and declare their past years’ income. The tax arrears must be settled before 31 December 2016.
• For duty-free islands, to reduce leakages which resulted in revenue loss of nearly RM1bil, the government will restructure the selling channel of cigarettes and liquors limited to duty-free outlets licensed by the Royal Malaysian Customs Department (RMCD)
• The free duty treatment on imported vehicles in duty-free islands will be tightened.
• However, the restructuring of sales on cigarettes, liquors and vehicles will not affect the tourists and locals who are residing in these duty-free islands
• Govt will optimise the revenue from the telecommunication spectrum through a redistribution and bidding process which will be implemented soon

Related:

Welcome news for SMEs and startups
Experts: Extra money in pockets can spur growth
Scholarships for top 20 in SPM
Bursary recipients in tears after budget revision
China tourism industry players welcome visa-free policy
Liow: Government will help tourism industry to thrive
Ali: Civil servants should raise productivity
GDP growth revised down slightly
EPF contributions can stay at 11%

Related posts:

 State of Malaysian economy: to grow 4~5% in 2016, lead ...

Nov 4, 2015 ... Budget 2016 has failed to address the decline of the ringgit, the worst in Asia! The strength and weakness of the currency is directly linked to ...

 Budget 2016: Malaysia not bankrupt ! PM said

Nov 4, 2015 ... Prime Minister Najib Abdul Razak is tabling Budget 2016 themed 'Prospering the Rakyat' in the Dewan Rakyat. Budget 2016 is the first budget ...

Hills clearing in Penang: NGOs not impressed with mitigation work at Botak Hill

http://www.thestar.com.my/metro/community/2016/01/28/searing-queries-on-clearing-ngos-not-impressed-with-mitigation-work-at-botak-hill/
An aerial shot taken from the bald patch on Bukit Relau, George Town, during a visit by the state delegation and NGOs to check on the mitigation work. — Photos: CHARLES MARIASOOSAY.

Chow (left) being briefed by technical consultant Khoo Koon Tai during the visit up Bukit Relau.

THE climb up the steep track on Bukit Relau is an arduous one. And there is little reward now for those who endure the climb.

The infamous Botak Hill seems to be getting balder. It’s a sad sight. What was once a lush hill had become a wide open patch of brown. Now, it is a giant scar of boulder, sand and concrete. The developer General Accomplish-ment Sdn Bhd is carrying out mitigation work which it says will be completed in June this year. For now, however, the hill looks worse than it did before.

The trip up the hill was arranged by the state and led by Local Government Committee chairman Chow Kon Yeow. Others in the entourage included Deputy Chief Minister 1, Datuk Mohd Rashid Hasnon, executive councillors, state assemblyman, Penang Forum and Malaysia Nature Society, Penang.

It was no surprise that the NGO members were not impressed with the mitigation work. The condition of the hill has deteriorated so badly. The only greenery in sight were patches of grass on the boulders.

The NGOs are even more upset that with less than six months before the mitigation work is completed, there seems to be no plan in place to halt the erosion of the hill or to carry out restoration work, which will have to include replanting of trees, the undergrowth and comprehensive hydroseeding.

Roads and drainage systems built right down the hill have destroyed whatever greenery there was. The explanation given was that the roads were needed for the mitigation work rings hollow. “How can you carry out mitigation work and clear more land for the so called roads for mitigation work,” asked a Penang Forum member.

There are metal poles bordering a part of the hill, and it look like some hoarding is about to come up. Is there any development being planned for the spot of the hill?

A spokesman for the developer, General Accomplishment Sdn Bhd said RM20mil has been spent so far for the mitigation work and the amount could rise to RM50mil.

“Why would you want to spend RM50mil for mitigation work if you are not going to do anything with the land,” asked a reporter.

“Well, we are open to development of the land if that is what the people want,” replied the project manager for the developer.

Chow was non-committal when asked if the state would reject any development on the land saying it was a “hypothetical” question as there wasn’t any application (to develop the land).

Despite the long explanation, the burning question remains.

Will the hill be restored to its old state and or is the mitigation work just the start of plans to develop the hill for housing.

It was rezoned for housing in 2012.

By K. Sekaran The Star

Related posts:

Penang Forum tells Chief Minister: the unmitigated disasters on hill projects

The Penang Forum steering committee released the following ‘executive summary’ to the media during its meeting with the chief minister of P...

Penang Forum concerns over hill clearing and floods ...

Dec 13, 2015 ... Dr Kam was delivering a talk titled, 'What is happening to our hills' at the Save The Hills of Penang public forum at Dewan Sri Pinang here ...

Save Penang Hill from the greedy Dec 11, 2015 ... The spate of hill clearings has prompted the Penang Forum, a coalition of public interest NGOs, to hold a forum on Save the Hills of Penang ...  Penang flood aftermath: design pump system needed to ... Dec 3, 2015 ... PENANG'S drainage system is unable to cope with heavy rain falling within a short ..... Penang Forum concerns over hill clearing and flood.    Errant hill clearing by developers causes of floods, sinkholes, seepages damaged houses! Errant hill clearing by developers causes of flood, sinkholes,   Errant hill clearing by developers causes of floods, sinkholes, seepages damaged houses! Errant hill clearing by developers causes of flood, sinkholes, seepages,

We don't need billionaire philanthropists, we need change !

An elderly woman sitting inside a store at a border village near the demilitarized zone in Yeoncheon, South Korea, Jan on 8, 2016. PHOTO: REUTERS 

Society needs people who adopt business models that can enrich ordinary people's lives and free them from a life bound by servitude and dependency.

These days we praise charitable donations and philanthropy; however, we must understand that they are the symptoms of a dysfunctional society, not the remedy.

It’s similar to the Red Cross during wartime; they can’t stop the war. In many ways, they propagate the dysfunctions because the biggest funders of these temporary resolutions are also the greatest oppressors of our society, from whom these dysfunctions stem.

There are, for example, many people suffering around the world from curable diseases simply because they don’t have access to proper medical assistance. Why do they have no access? Because they are too poor.

That is to say, this problem is derived from the massive income inequality around the world. If they could earn a sufficient living on their own, they wouldn’t need any charitable aid from developed nations. They don’t need rich philanthropists giving them millions of dollars. What they need is rich philanthropists to stop hoarding money and allow them to make a sustainable living.

Let’s look at Bill Gates, who was simply driven to make as much money as possible at any cost. Along the way, he has smothered many smaller companies, copied others’ ideas, and snuffed out many innovative competing products. Yet, all is forgiven and forgotten because now he donates a lot of money.

It is exactly this type of thinking that breeds income inequality around the world, which leads to people dying from poverty, and thus preserves the need for these billionaire philanthropists to remedy the situation.

Another exemplary indication of this problem is Lance Armstrong. He cheated to further his career and eventually got caught. Yet, today he is still a millionaire and is respected by millions of people: 3.8 million followers on Twitter to be exact. Why? Because he is a philanthropist who donated lots of money to cancer charities. None of this would have happened had he not cheated, but people forgive and forget. In our society, winners prosper no matter the means, as long as they become philanthropists in the end.

Take a moment to think of the other cyclists who didn’t allow themselves to cheat. Where are they now? Can you name them? Are they rich and famous?

To address the real origin of the problem, we need to change the way we go about earning and spending money at the very basic level. Instead of being driven to become philanthropists, treat people around you without greed and with consideration. Make your living and enable others around you to do so as well. If you aim to save money in order to be a philanthropist, you provoke everyone to be protective and hoard money also in order to control how the money gets spent. The more everyone does it, the more we are compelled and even forced to do it. We need to stop this vicious circle.

The resolution I’m putting forward is not a utopian concept. We simply need more people investigating and adopting business models that can enrich ordinary people’s lives, which can free us from a life bound by servitude and dependency.

In turn, this would empower us to solve our societal problems without asking such billionaires to solve them for us with their accumulated wealth. Nowadays I’m starting to see more and more entrepreneurs and business owners trying to figure this out, and it is quite inspiring. I think the real change derives from the ordinary things we do.

If this type of mission is to succeed and be sustained, the principal function of business must be ordinary. It is impossible for a sustainable economy to remain healthy and upright if it is only supported by the crutch of charitable donations and philanthropy.

The principal drive to better our society must come from ordinary businesses.

Hero-worshipping rich benefactors and philanthropists encourages everyone to accumulate more wealth than they need. We do not need billionaire philanthropists; we need ordinary business owners who treat other humans with respect and encouragement.

They are not rare or even uncommon; they exist all around us if we look carefully enough. It’s just that we are so busy looking up to iconic figures like the Bill Gateses of the world that we can’t see them.

By Justin Hiraga
  / 
Asia News Network

Justin Hiraga is an assistant professor at the Department of International Business Languages of Seokyeong University in Seoul. He can be contacted at jthiraga@gmail.com. –Ed.

Related post:

Ma'sia economy structurally sound despite fall in oil prices, need to invest in people, say Eco World Liew

Star Media Group managing director and chief executive officer Datuk Seri Wong Chun Wai (right) presenting a souvenir to Liew. With them is... 

Related: Property Development Entrepreneur Tan Sri Dato' Sri Liew Kee Sin