Najib’s Budget 2018


How will Najib narrow the fiscal deficit ahead of the general election while dishing out the ‘goodies’ especially to rural voters? What about allocations for healthcare, low-income housing and universities?

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  1. Total government debt as of end-June 2017 stood at RM685.1 billion or 50.9% of the GDP.

    Of this amount, 96.7% or RM662.4 billion was domestic debt (49.2% of GDP) while 3.3% or RM22.7 billion (1.7% of GDP) was offshore loans.

    How will this government deliver upon its many budget promises, when it has not shown how it will increase revenue? This is not revealed anywhere in the Najib’s budget.

  2. Penang CM Lim GE received the thumbs up from backbenchers when he announced, for the first time since it was launched in 2009, a 30% hike for the annual senior citizens’ cash award.

    The amount will be up from RM100 to RM130, with a total of RM6 million allocated for 2018.

    For the first time in Penang, the state government is issuing an ‘I Love Penang’ card, a smart card for all Penangites.
    The card can be used to access various social amenities and benefits provided by the state government.

    He also announced that RM15 million has been allocated for free bus services during peak hours, and he urged Rapid Penang, which is managed by the federal government, to be willing to add on 200 new buses.

    “RM275 million has also been allocated to make 82 new badminton courts and four Olympic-sized swimming pools, as sports unite the people,” Lim said.

  3. Dr Wan Azizah Wan Ismail today thanked Prime Minister Najib for sharing the success story of chicken seller Wan Azizah Wan Salleh during the tabling of Budget 2018.

    “Thank you Pekan MP for the Kak Wan story and taking the time to invite her to the Dewan. Congratulations to Amanah Ikhtiar Malaysia on its success in producing a successful woman entrepreneur,” said Dr Wan Azizah in her opening speech today as the floor is open to debate the budget 2018.

    She reminded Parliament of how the other Kak Wan’s success came about, saying it was due to a programme initiated by her husband Anwar Ibrahim when he was the education minister.

    “It originated from the research and a proposal of a Universiti Sains Malaysia team. Anwar Ibrahim took the idea and made it a special programme to eradicate poverty. That special programme was named Amanah Ikhtiar Malaysia,” she said.

  4. @Russel,

    “Mr Scheiss
    Hope to hear your commentary on Malaysia’s competitive position in IT industry since no much update from Multimedia Super Corridor likely because Najib do not favour this Mahathir’s legacy, just like Proton.”

    As of itself, MSC Malaysia has had some success in helping to nurture and develop a number of successful Malaysian ICT entrepreneurs, some of whom have expanded overseas – no Malaysian “Googles” or “Facebooks”.

    IMHO, Malaysian does not have the all round ecosystem to support the development, sustenance and growth of startups which can become globally dominant Internet giants such as Google and Facebook, so has to focus on the development of more specifically focused ICT-related applications and services,such as Fusionex, MDT Innovations, Animonsta Studios, N2N Connect, TESS International and others.

    The others

    As for Najib and MSC Malaysia, it is quite apparent that he does not give it as much importance as Mahathir did. This is apparent from the focus of the Economic Transformation Programme (ETP) launched by Najib on 25 October 2010 which focuses on 12 National Key Economic Areas and six Strategic Reform Initiatives and only one – Communications Content and Infrastructure covers some aspects of ICT more specifically related to communication services and multimedia content.[email protected]_of_ETP.aspx

    You can download all 13 chapters of the ETP Handbook from over here

    However, I personally feel that the ETP is more holistically focused on a wider number of economic areas, which is healthier for the economy overall than to focus on just one area.

    When the focus was primarily on ICT, I noticed that government ministers and officials tended to regard Malaysia’s ICT development as a “Third Wave” industry, whilst they downplayed Malaysia’s “Second Wave” (manufacturing) and “First Wave” (agriculture) as somewhat “shameful” when manufacturing contributes a sizeable proportion to Malaysia’s GDP, which can be seen from the ETP Manual, whilst ICT contributed a minor proportion of Malaysia’s GDP back when that report was published around 2010.

    However, the philosophy of the ETP seems to view ICT as an enabler which can be used to enable the business activities in the other sectors, though ICT as an end in itself is not emphasised much in ETP progress reports.

    Whilst development of an ICT sector is important for any country, ICT alone is not enough, just as the ICT sector in the United States is not enough to address the problems of its economy as a whole.

    Politics aside, I feel that the ETP’s emphasis on multiple economic sectors makes more sense and is better for Malaysia as a whole.

    I have not researched Najib’s latest baby TN50, so cannot give an honest comment about it.

  5. What a waste of money, throwing money to the Penang lang.
    First, a bigger airport would mean for … from China would visit and pollute Penang. A small airport brought tons of … this week to MBI event. Imagine a bigger airport. The island would be full of ….
    Secondly, incentives to medical tourism. So to knock down Peel Avenue is now ok because we are to promote medical tourism. More Indon …. would flood the island.

    • Need more money to expand Penang airport as currently too congested. Also to improve security of the airport. Expect more Qatar people coming in on direct flight. Must promote more beer festival to encourage westerners.

      As for budget 2018, I am not a Malay so nothing fancy for me. I am working in Singapore so 2% income tax rebate not applicable. Maybe cheaper comics since no GST.

    • Why pg forum and ah pek don’t protest about airport expansion? More tourists create demand on pg limited resources and environment. Maybe they are greedy too.

  6. Basically a budget to benefit directly civil servants, penghulus (to influence rural ignorant folks), farmers, fishermen and Imans (to propagate Umno’s version of Islam) who are all fixed depositors of BN-Umno votes in PRU14.

    Chinese folks be known that only in principle approval is given to build 10 new SJKC schools (no time line defined) and no funding commited or approved, so MCA will as usual ask the Chinese community to donate and get money from doing charity events. This is happening while billions are given to JAKIM. Remember Chinese contribute the most in income tax and all the sin tax in liquor and 4D/Toto.

  7. 84% on operating expense, only 16% on development expense. No wonder 2020 vision has to be extended by another 30 years (6 more terms for BN?) via TN50 to achieve developed nation status.

    • The country will remain stagnant and ringgit will never rise since no real development is happening while the bloated civil service is maintained to burden the nation financially for years to come.

      Fiscal deficit will not be narrowed when BN overspend and wasted on unnecessary projects with huge leakage, and supplementary budget will be tabled again as usual, thus more borrowings.

      • Penang Institute (not Penang Forum) said that by spending a huge chunk on the civil service (the government setting aside 34% of its total operating expenditure or 28.2% of the total budget on emolument for civil servants) in Budget 2018, Putrajaya failed to recognise the need to reform the sector for sustainability.

      • With only RM46 billion being allocated for development expenditure and with literally hardly any stimulus announced that can create economic multipliers for Malaysia, Malaysia may continue to suffer further in 2018. I wonder if the government is really aware that many companies big and small here are really suffering? Already several Giant hypermarkets are closing for good.

      • PRC Chinese bring in cash, but must have AliPay facility to tap their cash. Nothing horrendous.

      • Pg forum and ah pek do not want development? There is no more land to build roads for cars which pg langs are buying. In the past pg lang sing daisy and bicycles built for two. Then pg lang boon siew introduces kapchai. Then no looking back. Ah pek get 4wds with 8 wheels for on and off road. The road increases is slower than vehicles. Of course roads get bottle neck and drain the productivity. But pg lang no complain when they are stuck in the traffic for hours. Either they work 2 hours less or 2 hours more to compensate for sitting in the traffic jam

    • So little for development because most money used up to feed 1.6 million civil servants and hundred of thousands of pensioners, despite so much privatisationin the past. No wonder Ringgit is suffering from … dysfunction.

  8. And may I add. I also welcome Pakatan’s alternative budget, which is not all that different from Najib’s budget, except that Pakatan’s leans more favourably towards the people, whilst Najib’s is more business friendly, though the two budgets do not differ very much, apart from Pakatan’s proposal to abolish GST and raise the minimum wage.

    “Pakatan proposes RM258.52 billion alternative budget, end to GST”

    Besides abolishing GST, I do not see how Pakatan proposes to reduce prices of goods and services which have been increasing since even before the introduction of GST, especially due to the weakened ringgit, the strength of which follows the price of Brent Crude, which dropped sharply from over US100 per barrel to around US50 per barrel in late 2013 and was below US 40 per barrel when GST was introduced in Malaysia on 1 April 2015.

    Click on the “5Y” tab at the bottom of the Brent Crude chart

    Then look at the 10 year chart from the US dollar – Malaysian ringgit exchange rate on the XE currency convertor chart and you can see that the ringgit began to weaken sharply against the US dollar from mid-2014. This chart shows the number of ringgit required to buy US$1, so the higher the graph, the weaker the ringgit versus the US dollar.

    Since most imports are denominated in US dollars, a weaker ringgit results in more expensive imports, which in turn directly or indirectly impact the price of goods in Malaysia, even those which are made using some imported materials or components.

    For example, in its annual report, a Malaysian home appliance maker stated that its expenditure in US dollars comprises a substantial proportion of its costs. From what I understand, this manufacturer imports home appliances made by an OEM in China and sticks on its Malaysian brand name, plus some cosmetic modifications.

    I have experience of having to take my aunt’s electric oven toaster “produced” by this “manufacturer” to its service centre in Petaling Jaya twice and was appalled by the poor quality of service at its service centre and I will never buy any crap from this company.

    The last straw for my aunt’s oven toaster was when the two heating elements at the top of the oven warped and touched the metal side of the oven cavity and caused her circuit breaker to trip.

    I told her to buy and new one and I helped her find with similar features of another Malaysian brand which has a better reputation for quality.

    This is where, despite all the talk about Industrial Revolution 4.0, research & development and so forth will all come to naught if Malaysian companies do not go beyond the mentality of competing on their products having the lowest price and improved quality is not something emphasised in Najib’s or Pakatan budgets.

    Back to the GST, given the still relatively weak ringgit, which has strengthened a bit in the past months, will abolishing the GST significantly reduce the price of goods and services?

    Also, by how much will replacing the GST with reverting back to a sales and services tax have all that much impact on the cost of goods and services, especially when the ringgit remains weak?

    As long as the strength of the ringgit is closely related to the price of Brent Crude and as long as the price of Brent Crude remains low so will the ringgit remain weak and the cost of living remain high.

    What solutions do both Najib and the Pakatan have to address the high cost of living, especially when the GST was introduced to make up for the decline in oil revenue?

    • BN can always increase the GST rate after winning next GE if short of money to pay BR1M and loan interest. I believe it will be 7% GST by 2019. So vote carefully.

      • Maybe if BN wins, they may increase GST but to stop that Pakatan has to wn and abolish GST.

        The questions is that is Pakatan wins and abolishes GST will that arrest and reverse rising prices, which are due to other factors besides GST. GST is just one factor, what about the others.

  9. No doubt the Budget 2018 contains many populist goodies but even though they may not be enough for the people, still I would not oppose such measures which provide some benefit to the people. Instead, I would demand more for the rakyat and if anything has been left out, I would demand for it, irrespective of whether the government would concede to my demands.

    For example, whilst I welcome BR1M, which is means tested anyway and given to those who genuinely qualify as low income earners based upon their personal bank account or bank accounts, the amounts paid out are not enough to cover living expenses but help to some extent. A comprehensive social security system would be preferable but in the absence of that, BR1M is the best alternative in Malaysia so far so I would not oppose it for the sake of opposing it and would favour any increases in BR1M payouts.

    After all, I have paid my taxes to the government all my working life, so I welcome the opportunity to receive some of it back.

    As a senior citizen who has worked in the private sector all my life, I am not eligible for a government pension, so am in favour of a living, inflation-linked pension to be paid out to all senior citizens who qualify based upon a means test.

    I would also like to see a better quality, more efficient and preferably free public healthcare service; a better quality, more effective and free education system; better quality and very affordable public housing; better quality, more extensive, more efficient and affordable public transit system and so forth.

    We should also have more environmentally-friendly development policies and measures, including electric vehicles as these will help reduce and hopefully eliminate toxic exhaust emissions in populated areas.

    However, in the bigger picture, electric vehicles will not necessarily reduce overall emissions since they still require energy – i.e. electrical energy which thus transfers demand for energy from the fuel tank to the electricity power station, so energy consumption at power stations will correspondingly increase and so will their generating capacity have to increase and more power stations will most probably have to be built.

    So unless most of a country’s electricity is generated from renewable energy sources such as hydropower, solar power, wind power and so forth, this increased demand for electrical power generated will result in greater demand for oil, gas, coal or nuclear fuels, which still negatively impact the environment, though perhaps in different ways and such centralised facilities are better able to manage the pollution they create in more professional ways.

    Also, based upon Malaysia’s failed attempt in the 1980s to get the majority of the public to embrace cars powered by liquefied petroleum gas (LPG), there are insufficient LPG refilling stations, so most public except for those who are idealistic will convert their cars to be powered by LPG and without enough LPG powered cars there will not be enough LPG refilling stations.

    I wished that the government of that day had mandated that all new cars sold after a certain date would have to be LPG powered, which would have allowed a gradual transition to LPG which would provide an incentive for more petrol stations to include more LPG refilling facilities but the government instead relied on awareness raising and promotion, which did not work, so now only taxis and some commercial vehicles are LPG powered or more accurately hybrid petrol and LPG powered.

    Likewise, I see similar problems with electric vehicles, since if there is not enough nationwide availability of quick charging stations, electric vehicles will not be all that popular and if they are not all that popular, there will not be enough quick charging stations, so electric vehicles will remain not all that popular. So at most, hybrid petroleum/electric vehicles will still be required, especially by motorists who travel outstation, where there is no certainty to be able to recharge their vehicle.

    Back in 2008, Proton was in talks with a Dutch company, Detroit Electric to fit Proton cars with electric engines and at the time, there was a Malaysian company which planned to install quick charging stations nationwide but that deal fill through, I understand due to a decision by Detroit Electric, supposedly due to changes in ownership of Proton. Not much information is available as to why this deal did not materialise.

    Detroit electric held a demonstration of its electric powered cars at Proton’s testtrack in Shah Alam in late 2008 and showcased an electric powered Lotus Elise, electric powered Daihatsu Cuore, a retrofitted electric powered Proton Persona and an electric Proton Savvy.

    The retrofitting was fairly straightforward – i.e. replace the petrol engine with a biscuit tin sized brushless DC motor bolted onto the automatic gearbox, replace the accelerator with a variable electric speed control pedal and the fuel tank with a lithium-ion battery. Otherwise, the rest was more or less the same as in a petrol or diesel powered car, except for no engine noise whilst stationary since the electric motor is not turning. To drive off, put the gear into forward or reverse, step on the pedal and the car moves.

    Journalists covering the press conference had the opportunity to drive an electric car of their choice one round of Proton’s test track.

    Those electric cars could be charged from a home 13Amp socket and were said to have a maximum range of 350km, which would get one from Kuala Lumpur to Singapore but once outstation, where to find somewhere to recharge the car for the return trip if there were no quick charging stations, unless a generous relative, friend, hotel or office is willing to let you recharge your car from their 13 Amp socket.

    Unless this problem is solved, electric cars which are rather trendy now may eventually die a natural death, just like LPG cars in the 1980s, unless the government mandates their adoption and the phasing out of petroleum or gas fuelled vehicles by a certain date, such as the China government is thinking of doing.

    “News Analysis: China mulls fossil fuel car ban, boosts electric vehicles”

    As for duty-free Pulau Pangkor, well the only disappointment are the non-inclusion of tobacco, liquor and motor vehicles amongst duty free items.

    Also more can be provided especially for the Indian, Orang Asli, Chinese and other minority communities, including minority bumiputras.

    Besides that, I would not oppose the rest, even though some of the measures may not be enough.

    At the end of the day, we will only know from the results of what transpires from this budget.

    • Issues related to energy and transport: (a) half-baked administrators (b) nominal, self-congrajulatory, me-too initiatives and regulations (c) corruption, facilitated by the fork-tongued, developed countries (d) manipulation of the issue by the major industries that will be badly affected (e) the dogma of intellectual property, defended even in the face of climate change.

      If electric cars take off and the users all charge them at night, the pattern of electricity generation would have to change. One or 2 countries are considering battery swaps. Even the percentage of bio-diesel in diesel the gomen is advocating damages engines, according to a statement by 2 major, vehicle manufacturers about 2 years ago.

      All these are capitalist bandaids that desperately try to evade the critical issue (GHG and climate change) and public transport (even free transport) as a solution.

      • Having covered Malaysia’s ICT industry for Malaysian newspapers, magazines and websites for over 20 years, I wholeheartedly agree with points a), b), c) and d) and e) above. a) and b) are pretty obvious to me.

        As for capitalist bandaids, how do you convince people to embrace the measures required to address issues of green house gases and climate change, let alone the huge amount of consumer goods such as smartphones which they buy just because some new model has come out with some new features or minor incremental enhancements over the old model which still works fine, just to keep up with the Joneses?

        How does one as a concerned citizen tell fellow Malaysians who water their beloved plants when there is a water shortage thatthey should not do so?

        For years, there have been cars parked willy nilly on the main road in front of a restaurant/pub in my neighbourhood and when we complained to the newly elected Pakatan state assemblyman about it, he did not take serious action and when we complained tothe current ADUN he told us residents that those culprits who park and block narrow the road are Petaling Jaya residents as well and they do not wnat to be too harsh on them.

        I guess they want their votes too.

        So whether the BN or Pakatan are in charge, its no different for us residents.

        One of them wins and one of them loses but in both case, we the plaebian masses lose.

      • Surprise at your grouses. Car parking are not under Adun or Mp but under traffic laws. Adun to issue summons?
        Easy throw everything to Adun. Then tell Michael cheng or mca. Can make noise at Mppp but do not know mppj? Or complain to central gomen polisi?

      • Mr Scheiss
        Hope to hear your commentary on Malaysia’s competitive position in IT industry since no much update from Multimedia Super Corridor likely because Najib do not favour this Mahathir’s legacy, just like Proton.

  10. Other than the abolishment of 6% Gst on books, the entire “bajet” is of no interest to me.
    But hey, shops that sells books are rare and are closing down.
    And it is terrible to continue the BR1M,why not the BR1M goes to social welfare that deals with the really poor and deserving.
    As written earlier regarding eco vehicles and charging stations,the federal govt have nothing to offer and is not prepared.
    Pangkor is to be a semi Duty Free Zone ? Short of a 100% duty free.
    400 million for R&D , wah…Malaysia going to be a world player in the world of Science.
    Nothing to promote a clean country or city and towns.
    Other readers and fellow commentators, pls do share what this “bajet” effects on you.
    And your general view of it.
    Aren’t there are ways to lower cost of living and slashing prices like say the internet bill , lower Indah Water bill, off peak hours electricity usage and more.
    7 millions Malaysians need BR1M to survive?

    • High income nation with 7 million people depending on BR1M and possibly KR1M 2.0? This is the irony of BN vision.

  11. A special distribution of 1.5 billion Amanah Saham 1Malaysia units will be reserved for the Indian community. Each investor is limited to 30,000 units.

    Is this the best MIC could bargain for the Indians?


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