PUTRAJAYA, Oct 23 — There will be something for everyone in Budget 2016 which will be tabled today, but the public should not expect too much because of the global economic situation.
A senior Finance Ministry official said when the budget was being drawn up it was generally accepted that it would be a painful one because of the falling oil prices “but fortunately the Goods and Services Tax (GST) came to the rescue”.
The GST has brought in more revenue for the government than expected but still not enough to cover the more than 50 per cent loss in revenue from the falling oil prices.
He explained that oil revenue from Petronas made up 29 per cent of the government’s coffers and the drop in prices had affected Malaysia badly.
However, the official stressed oil dividends used to be 40 per cent of the revenue about a decade ago but the government had since been able to diversify its income.
Besides the GST, the rationalising of the subsidy scheme for various products had also saved the government a lot of money — almost RM22 billion.
The official said all these savings and GST income had enabled the government to continue its development programme.
He said all major projects, like the MRT and LRT, would continue as these were important projects to further spur the economy.
The expansion programme for the LRT is almost complete and the first phase of the MRT is expected to take off in July. The MRT Line 2 and 3 are expected to be launched next year, while a third LRT line to connect to Shah Alam is being planned and is also expected to be announced.
To counter the rising cost of living, Budget 2016 is expected to continue with direct and indirect measures including 1Malaysia People’s Aid Payment (BR1M) and the 1Malaysia Shops (KR1M) would continue.
The official expects more KR1M outlets to be set up so the people would have access to cheaper goods to reduce their cost of living.
“Taking care of the people’s needs would remain a primary target of the Budget 2016 especially those in the B40 group and rural folk,” he said
“There will also be something for the middle class — the people who pay income tax.
“Prime Minister Datuk Seri Najib Razak is trying to spread the benefit as much as he can.”
However, he reiterated that it would be a tough year and the people’s expectation should be reasonable.
On the bonus for 1.6 million civil servants, the official expects something for them but it would not be three months as requested by Cuepacs.
“It will cost the government almost RM17 billion for three months of bonus. This is something that we cannot afford,” he said.
As for income tax, the official said he expects small adjustments, as the GST had been quite successful in getting more income for the government.