1MDB PM Najib: Malaysia not going bankrupt but ... It’s either GST or facing bankruptcy? What’s he saying?
Here are three fast news analysis on Malaysia’s shrinking Budget 2017 as tabled in Parliament by 1Malaysia Development Berhad (1MDB) Finance Minister Najib Razak today (Oct 21, 2016):
"NAJIB BRINGS DISASTER: 2017 WILL BE ONE OF THE WORST YEARS FOR MALAYSIA – TONY
Politics | October 21, 2016 by | 0 Comments
Budget 2017 proved that the government is not only running out of cash, but the situation will only deteriorate further, making 2017 possibly one of the worst years for ordinary Malaysians.
Gov’t failed to meet 2016 revenue targets
Last year, Prime Minister Najib Abdul Razak announced in his budget that the government expected to collect RM225.7 billion of revenue for 2016. However, the 2016 revenue has now been revised to RM212.6 billion based on the latest estimates. That represents a very substantial 5.8 percent or RM13.1 billion shortfall for 2016.
To put things into perspective, and to highlight the severity of situation, more often than not in the past, the government will collect more than they projected.
The shortfall has in turn caused lower than projected operating and development expenditure. The government now estimates 2016 operating expenditure to drop from RM215.2 billion to RM207.1 billion, while development expenditure will drop from RM50 billion to only RM45 billion.
For example, this is the reason why we are seeing a substantial shortfall in health expenditure, resulting in shortages of re-agents for conducting critical blood tests as well as increase in cost of medication for the man on the street.
Emoluments and debt servicing
In fact, it will only get worse in 2017 as the sins of the past catches up with the government of the day.
The increasing size of the civil service has ensured that the “Emolument” payments for 2016 has increased by RM3.8 billion to RM73.9 billion despite the RM8 billion decline in operating expenses. For 2017, the government has further projected that emoluments will increase further by at least RM3.6 billion. In the meantime, pension contributions, or “Retirement Charges” will also increase substantially from RM19.0 billion in 2016 to RM21.8 billion in 2017.
In addition, the annual “Debt Service Charges” – the instalments and repayments the government has to pay for loans taken in the past – has increased significantly. For 2016, it is estimated at RM26.6 billion or a RM2.36 billion hike from 2015. For the next year in 2017, the amount would further increase to RM28.9 billion. This is as a result of the government’s reckless ramping up of federal government debt over the past decade on the back of high oil prices.
The twin increases in emoluments and retirement charges and debt service charges in the context of constricted revenue and operating expenditure would only mean less funds for other crucial expenses.
“Subsidies and social assistance” has already been reduced from RM39.7 billion in 2014 to RM27.3 billion (2015) to an estimated RM24.6 billion (2016). It will be further reduced to RM22.4 billion in 2017.
There will also be less money for medicine supplies, housing, scholarships and other forms of educational support.
Gov’t over-optimistic on 2017 revenue projections
Finally, the only reason the government was still able to project a “moderate” 3 percent budget deficit for 2017 was by giving an optimistic projection in its tax revenues. Despite a significant drop in the estimated Petroleum Income Tax (PITA) from RM11.6 billion in 2015 to RM8.5 billion in 2016, the government is assuming higher oil prices and demand for 2017 to collect RM10.6 billion.
The government also assumes an increase in Corporate Income Tax (CITA) despite no corresponding assumption in a higher economic growth rate. CITA actually declined marginally in 2016 to RM63.2 billion from RM63.7 billion in 2015. However in 2017, the government has inextricably projected that it would receive RM69.2 billion.
Similarly, despite a declining trend of Goods and Services Tax (GST) collection in the recent quarters, the government is still projecting an increase in collections of GST from RM38.5 billion in 2016 to RM40 billion in 2017.
All the above goes to prove that the government is running out of cash very quickly and is struggling to balance its revenue and expenses. The government’s excesses of the past – including increasing the civil service hires to reduce graduate unemployment, excessive borrowings to finance inefficiency, corruption and wastages have severely constricted the government’s ability to allocate expenditure today.
Hence when the overly optimistic projections in government revenue collection fail to materialise, we can expect 2017 to be a very painful year for ordinary Malaysians.WRITER: TONY PUA is the DAP national publicity secretary and Petaling Jay Utara MP - Malaysia Chronicle"
"BIGGEST JOKE: NAJIB INCREASES BR1M TO RM1,200, THEN CLAIMS M’SIA IS ‘UPPER MIDDLE INCOME’ NATION
Politics | October 21, 2016 by | 0 Comments
PETALING JAYA – The Government will increase the 1Malaysia People’s Aid (BR1M) next year for various categories eligible for the assistance.
Prime Minister Datuk Seri Najib Tun Razak said households in the e-Kasih database with a monthly income below RM3,000 will see their BR1M increased to RM1,200 from RM1,050 and RM1,000.
To put things into perspective, and to highlight the severity of situation, more often than not in the past, the government will collect more than they projected.
The shortfall has in turn caused lower than projected operating and development expenditure. The government now estimates 2016 operating expenditure to drop from RM215.2 billion to RM207.1 billion, while development expenditure will drop from RM50 billion to only RM45 billion.
For example, this is the reason why we are seeing a substantial shortfall in health expenditure, resulting in shortages of re-agents for conducting critical blood tests as well as increase in cost of medication for the man on the street.
Emoluments and debt servicing
In fact, it will only get worse in 2017 as the sins of the past catches up with the government of the day.
The increasing size of the civil service has ensured that the “Emolument” payments for 2016 has increased by RM3.8 billion to RM73.9 billion despite the RM8 billion decline in operating expenses. For 2017, the government has further projected that emoluments will increase further by at least RM3.6 billion. In the meantime, pension contributions, or “Retirement Charges” will also increase substantially from RM19.0 billion in 2016 to RM21.8 billion in 2017.
In addition, the annual “Debt Service Charges” – the instalments and repayments the government has to pay for loans taken in the past – has increased significantly. For 2016, it is estimated at RM26.6 billion or a RM2.36 billion hike from 2015. For the next year in 2017, the amount would further increase to RM28.9 billion. This is as a result of the government’s reckless ramping up of federal government debt over the past decade on the back of high oil prices.
The twin increases in emoluments and retirement charges and debt service charges in the context of constricted revenue and operating expenditure would only mean less funds for other crucial expenses.
“Subsidies and social assistance” has already been reduced from RM39.7 billion in 2014 to RM27.3 billion (2015) to an estimated RM24.6 billion (2016). It will be further reduced to RM22.4 billion in 2017.
There will also be less money for medicine supplies, housing, scholarships and other forms of educational support.
Gov’t over-optimistic on 2017 revenue projections
Finally, the only reason the government was still able to project a “moderate” 3 percent budget deficit for 2017 was by giving an optimistic projection in its tax revenues. Despite a significant drop in the estimated Petroleum Income Tax (PITA) from RM11.6 billion in 2015 to RM8.5 billion in 2016, the government is assuming higher oil prices and demand for 2017 to collect RM10.6 billion.
The government also assumes an increase in Corporate Income Tax (CITA) despite no corresponding assumption in a higher economic growth rate. CITA actually declined marginally in 2016 to RM63.2 billion from RM63.7 billion in 2015. However in 2017, the government has inextricably projected that it would receive RM69.2 billion.
Similarly, despite a declining trend of Goods and Services Tax (GST) collection in the recent quarters, the government is still projecting an increase in collections of GST from RM38.5 billion in 2016 to RM40 billion in 2017.
All the above goes to prove that the government is running out of cash very quickly and is struggling to balance its revenue and expenses. The government’s excesses of the past – including increasing the civil service hires to reduce graduate unemployment, excessive borrowings to finance inefficiency, corruption and wastages have severely constricted the government’s ability to allocate expenditure today.
Hence when the overly optimistic projections in government revenue collection fail to materialise, we can expect 2017 to be a very painful year for ordinary Malaysians.WRITER: TONY PUA is the DAP national publicity secretary and Petaling Jay Utara MP - Malaysia Chronicle"
"BIGGEST JOKE: NAJIB INCREASES BR1M TO RM1,200, THEN CLAIMS M’SIA IS ‘UPPER MIDDLE INCOME’ NATION
Politics | October 21, 2016 by | 0 Comments
PETALING JAYA – The Government will increase the 1Malaysia People’s Aid (BR1M) next year for various categories eligible for the assistance.
Prime Minister Datuk Seri Najib Tun Razak said households in the e-Kasih database with a monthly income below RM3,000 will see their BR1M increased to RM1,200 from RM1,050 and RM1,000.
“For households earning between RM3,000 and RM4,000, BR1M will be increased from RM800 to RM900,” Najib said in his Budget 2017 speech in Parliament Friday.
Meanwhile, single individuals earning below RM2,000 monthly will enjoy an increase in assistance from RM400 to RM450.
In announcing the increase in BR1M, Najib hit out at those who referred to the aid as “animal feed’ and “bait”.
“Mr Speaker, BR1M is not animal feed nor is it bait. Rather, it is a sincere assistance from the Government as we always prioritise the rakyat’s needs. Hence, we are providing more assistance,” he said to cheers from the floor.
Najib, who is Finance Minister, also announced that the annual Bereavement Scheme would be continued with an RM1,000 compensation for next of kin of BR1M recipients for the households and elderly category.
“Overall, the BR1M programme will benefit seven million recipients with an allocation of RM6.8bil,” he added.
UPPER MIDDLE CLASS
Malaysia has achieved the status of an upper middle-income nation based on its Purchasing Power Parity (PPP) per capita, according to Prime Minister Datuk Seri Najib Tun Razak.
PPP, determined by the World Bank in a report every three years, refers to the quantity of currency needed to buy a common basket of goods and services, taking into account the cost of living and inflation.
In presenting the RM260.8bil Budget 2017 in Parliament Friday, Najib said Malaysia’s PPP per capita increased from US$23,100 in 2012 to US$26,891 in 2015.
In his speech titled “Ensuring Unity and Economic Growth, Inclusive Prudent Spending, Wellbeing of the Rakyat”, the Finance Minister proposed RM214.8bil be allocated as operating expenditure and RM46bil as development expenditure.
He said the total did not include contingency reserves of RM2bil.
This is the eighth budget presented by Najib since he became Prime Minister in 2009.ANN/Malaysia Chronicle"
"NAJIB INSISTS MALAYSIA NOT GOING BANKRUPT, BUT REFUSES TO CUT GST
Politics | October 21, 2016 by | 0 Comments
KUALA LUMPUR, Oct 21 — Malaysia is nowhere near becoming a bankrupt or a “failed state”, Prime Minister Datuk Seri Najib Razak said today.
“The word ‘bankruptcy’ is very far from the Malaysian economy dictionary,” he said while presenting Budget 2017 in Parliament today.
“The word ‘bankruptcy’ is very far from the Malaysian economy dictionary,” he said while presenting Budget 2017 in Parliament today.
He highlighted Malaysia’s performance according to reputable rating agencies such as Fitch and Moody’s, noting that Fitch had rated Malaysia A- compared to the Philippines (BBB-), Thailand (BBB+) and Vietnam (BB-).
“Another claim is that we are a failed state. This is also slander,” he said.
“A failed state defines a country that could not fulfill its basic commitments such as safety and security,” he added.
GST
There will be no increase in the Goods and Services Tax (GST) rate of 6 per cent, Prime Minister Datuk Seri Najib Razak said today when tabling Budget 2017.
“I want to stress here — don’t trust rumours that the GST rate would be hiked. All that is just empty talk and it’s not true at all,” Najib said.
Najib announced that Putrajaya had also managed to rake in almost RM30 billion in GST collection between April 2015 and October 19 this year.
“I am delighted to report that through GST, almost RM30 billion was successfully collected tillOctober 19, 2017,” he said.
Najib said that the implementation of GST had also diversified government revenue sources, as there are only 2.1 million income tax payers of the 14.6 million-strong workforce.
Putrajaya introduced the broad-based consumption tax in April last year in a bid to broaden the country’s tax base and address an over-reliance on petroleum-derived income.
MALAY MAIL/Malaysia Chronicle"
No comments:
Post a Comment