Despite falling oil prices, we could have managed without GST


I don’t know about you, but I didn’t watch Najib’s Budget 2016 speech. I thought it would be too painful to listen to. Not just because of the bad news but because of the thought of what could/might have been.

For a start, contrary to mainstream business wisdom, we could have managed without the regressive goods and services tax. It is regressive because it has passed the burden of tax from the rich to the entire population, even those who are poor.

The GST is expected to raise RM27bn this year since its implementation on 1 April 2015. Compare this to the revenue foregone of RM13.8bn from the discontinued sales and services tax, as estimated by Najib last October. So that means we have stumped up almost double the amount in consumption taxes.

This RM27bn raised from GST this year is also much higher than Najib’s October 2014 forecast of RM19.4bn (RM23.2bn GST – RM3.8bn exempted items).

No wonder Malaysians are hurting.

In 2016, GST is expected to rake in RM39bn, burdening the rakyat even more. According to Najib, the discontinued sales and services tax would have raised only RM18bn, hardly enough to compensate for the drop in oil prices – or so he says. So, again this means we are coughing out more than double in consumption taxes.

Full article on Aliran website.

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    • Speechless, just dont know what to say anymore !!! 1pm looks bodoh, talks bodoh and indeed is bodoh, however, he managed to get a “donation” of 2.6b and set up 1mdb to dig deep into the nation’s wealth, and yet he is untouchable and his position is as firm as a rock to the dismay of his mentor, Dr M…

    • Najib’s Budget 2016 is an austerity budget that shrinks the resources for key sectors, such as education, skills development, industry development, public transport sector, welfare, women’s health, youth etc. Such development are deprived funding and will hurt ordinary Malaysians, especially in view of the current slow economy coupled with our high indebtedness, high youth unemployment and overall underemployment, low women’s labour force participation rate, and the new unpredictable forces facing our local market under TPPA.

  1. Melaka folks can earn extra income as extras for gangster movie now filming with India Superstar Rajanikanth. Can earn so.e spate money as the budget does not help the needy much.

  2. Rafizi Ramli and Tony Pua to hold a talk on Budget 2016 on 31 Oct 2015 in Penang.
    Can someone tell us the venue of the talk?


    A Budget BY NAJIB, OF NAJIB, FOR NAJIB (or is it with Rosmah????)….

    • Massive cuts were imposed on education, welfare and social spending but Prime Minister’s Department not only did not cut back on its spending, more was allocated for 2016 (from RM 19 billion in 2015 to RM 20.3 billion in 2016) and taking a higher proportion from the national coffers.

      In 2016, the Prime Minister’s Department is taking 7.6 percent of the total budgeted expenditure.

      A decade ago in 2006, the Prime Minister’s Department only took up 2.67% of the total budgeted expenditure. In 2007 and 2008, it occupied 3.81% and 3.4% of resources respectively.

      After the disastrous electoral outing of March 2008 and the September 16th threat of crossovers of Barisan Nasional MPs in the same year, more resources were allocated to the Prime Minister’s Department for the Prime Minister to consolidate his base within UMNO and also to counter the Opposition.

      Prime Minister’s Department received 6.71%, 6.37% and 6.74% in 2009, 2010, 2011. For the following years, it was 5.38% (2012), 5.24% (2013), 6.23% (2014) and 6.96% (2015).

      Budget 2016 is the first time the allocation for Prime Minister’s Department hits more than 7%.

      It’s indeed a budget of Najib, by Najib and for Najib!

  4. This Budget shows we are in desperate measures.
    Yet we are sold to believe Malaysia is in good hands.
    Who would believe in a Snake Oil Salesman?
    Lest we want to, desperate to, in self-denial to Want To Believe in Malaysia Boleh Naik Jeep!
    Never in the history of Malaysia have we been led to such dire straits by a leadership bent lying to destroy Tanah Air Cinta Ku. No thanks to MadHatter of Helang Island for his legacy.

  5. Subsidy cuts and other things Najib didn’t tell you in Budget 2016

    Prime Minister Najib offered a list of good news under Budget 2016 which included a hike in civil servants’ pay, increase in BR1M cash handouts, and Goods and Services Tax rebate for mobile phone purchase.

    But where is all the money coming from when the country is facing falling revenue from a slump in commodity prices?

    Malaysiakini uncovers the ‘bad news’, by breaking down Budget 2016 for you based on ministries which have suffered the worst cuts.

    What the premier failed to mention in his budget speech include the likelihood of pricier cooking oil, more expensive train and flight tickets on ‘uneconomical’ routes, the poor having to pay for their electricity bills, and other subsidy cuts.

    1) Finance Ministry – General subsidies almost halved

    At first glance, it would appear the Finance Ministry had suffered the worst from an austerity budget, with its allocation being slashed by RM7 billion or 17.8 percent, from RM39.247 billion to RM32.247 billion.

    However, closer scrutiny showed the heavy cut was made possible through a reduction in subsidies which is expected to go down by a whopping 45 percent, or RM8.707 billion to RM10.633 billion.

    Other notable cuts in the ministry include a 95 percent reduction in allocation to the Poor Students’ Trust Fund (Kumpulan Wang Amanah Pelajar Miskin) from RM200 million to a mere RM10 million.

    These cuts allowed for increased spending in other areas, including an allocation of RM1.073 billion to deal with the new increase in minimum wage.

    The government has already embarked on an aggressive subsidy rationalisation exercise since the beginning of this year and it is unclear where the further subsidy reduction will come from.

    2) High Education Ministry – Less money for universities

    The second largest cut was targeted at the Higher Education Ministry which saw its budget reduced by RM2.4 billion to RM13.378 billion.

    To make up for the shortfall, public universities will suffer the brunt of the cut as they will see their funding reduced by RM1.442 billion.

    The worst hit universities are Universiti Malaya, followed by Universiti Malaysia Terengganu and Universiti Teknologi Mara, which budget were slashed b 27.3 percent, 23.76 percent and 23.72 percent respectively.

    Some MPs, including Bayan Baru MP Sim Tze Tzin, have raised concerns if this will mean higher tuition fees next year.

    3) Commodities Ministry – Pricier cooking oil

    Plantation Industries and Commodities Ministry saw a 60.76 percent reduction to its budget from RM1.659 billion to a mere RM651 million.

    While the ministry’s programmes saw an across the board reduction in allocation, it will be the consumers who will feel the burden the most.

    This is because the single largest cut came from the RM950 million cooking oil price stabilisation scheme which was completely defunded under Budget 2016.

    Under the scheme which was introduced in 2007, it ensured a ceiling price on cooking oil, as well as sufficient supply in the market by compensating producers.

    With the scheme effectively abolished next year, consumers are likely to pay more for cooking oil.

    4) Transport Ministry – Train, flight subsidies reduced

    The Transport Ministry will see a budget reduction of 14.1 percent, or RM648 million, to RM3.955 billion, the fourth largest cut among the ministries.

    Areas that will see cuts include subsidies for KTM trains and flights from rural regions.

    Specifically, the subsidy on “uneconomical” KTM routes will be slashed by more than half, from RM52.9 million to RM25 million.

    Subsidy for rural flights, as well as on aircraft rental, will also be reduced by RM5 million from RM160 million.

    Other reductions will come primarily from the ministries’ operations.

    5) Energy Ministry – No more electricity subsidy

    The Energy, Green Technology, and Water Ministry comes in at fifth place for the largest allocation cut under Budget 2016, with a reduction of RM605 million to RM2.262 million.

    Likewise, it will be consumers who will suffer the most as the single largest slash is the electricity bill subsidy of RM150 million which will be completely defunded.

    Presently, households which use less than RM20 in electricity have their bill fully subsidised by the government to help poor families.

    6) Defence Ministry – Downsized national service

    The Defence Ministry will see a budget reduction of RM459 million, the sixth largest cut to a ministry.

    The amount is relatively small compared to the Defence Ministry’s huge budget of 17.304 billion for next year.

    The cut came largely from the downsizing of the national service programme which allocation will be reduced from RM614 million to RM276 million.

    However, other areas have also seen cuts, including a reduction of RM100 million to RM2.701 billion for air defence, even as the government plans to acquire new assets in difficult economic times.

    Under Budget 2016, the Defence Ministry will acquire six Littoral Combatant Ships, Very Short Range Air Defence weapons system, armoured vehicles, and the A-400M Airbus.

    7) Urban Ministry – Solid waste management

    The Urban Wellbeing, Housing and Local Government Ministry is the only other ministry to have experienced a cut of more than RM300 million.

    Under Budget 2016, the ministry will be allocated RM4.173 billion – compared to RM4.572 billion this year – a reduction of RM399 million.

    The single largest cut will come from solid waste management; its funding will see a reduction of 17.3 percent from RM1.036 billion to RM857.1 million.

    It remains unclear how the ministry is going to handle solid waste management while still saving RM178.9 million.

    However, it should be noted the ministry’s budget provided for RM15 million for the operation of a new landfill next year, which is a more economical method of waste disposal.

    *This list excludes the Home Ministry; its Federal Expenditure Estimates has yet to be uploaded by the Finance Ministry.

    • The 2016 Budget will allocate a total of RM265.2b to support Development Expenditure and Operating Expenditure Of this amount RM215 billion is for Operating Expenditure while RM49 billion for Development Expenditure. Emolument make up the bulk of the country’s Operating Expenditure in 2016 with a share of 26.6 %.

      Despite all the cuts announced in the Budget 2016, the Operating Expenditure is expected to be above 80% with the balance being the Development Expenditure. It certainly very costly to run our country the BN style.

  6. PMO a super ministry to absorb more jobless 1Msia graduates to become obedient civilians to cast the votes?

  7. This Budget serves one purpose:
    To bluff the entire population of MalaysiaBoleh.
    It increases allocation to PM’s department.
    It increases GST revenue but deducts from public universities allocation (to these morons, education is dispensable). Note: Parents, be prepared for higher education fees in public unis.
    It takes from the higher tax paying states to pay for development in less tax payer states like Sarawak.
    Tax Money is Not Enough. With increase revenue from GST, it still is in the red, so time to tax from the rich (Yang is still happy with this???)
    It promises affordable housing but not to the whole of the nation. Btw, what happened to the land bought in Penang as promised for affordable housing???
    It doesn’t guarantee strict monitoring of tax revenue so that it won’t happen like 1MDB’s massive debt & missing monies.

    One thing is certain: we will not become a high income nation as long as Snake Oil Saleman is having a booth in Putrajaya.


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