The prime minister’s announcement that the Goods and Services Tax (GST) is to stay at six per cent for 2017, drew relief.
RIGHT TRACK: It will help spur growth and boost disposal incomes
DATUK Seri Najib Razak yesterday unveiled a pragmatic but caring 2017 Budget that will help spur growth and boost disposal incomes of ordinary people.
The prime minister also used his eighth budget as finance minister to support businesses, maintain fiscal discipline and care for the wellbeing of every segment of the society — from young to old and the lower-income earners.
There was something for everyone — higher BR1M handouts for the Bottom 40, debit cards for university students, more affordable homes for workers, tax cuts for small and medium-sized firms and new opportunities for people to earn more.
He also announced assistance to women, children and families as well as moves to build new infrastructure and increase home ownership.
He also paid particular attention to the needs of the B40 and Middle 40.
These measures include lessening the burden of working parents who send their children aged 6 and below to registered nurseries and preschools, by providing tax relief of up to RM1,000 for individual taxpayers starting from year of assessment 2017.
Another move that will benefit nearly 280,000 children enrolled in Tabika and Taska programmes is providing more balanced daily nutritional food packages including 250ml of milk, raisins and eggs.
And to boost consumption, newspaper subscriptions, smartphones, tablets and gym memberships are now included in the lifestyle tax relief items.
Economists and business leaders hailed the budget, which some described as people-centric, as tough to juggle between supporting growth and meeting the diverse needs of the people.
“Measures tailored for various groups such as B40, M40, fresh graduates and first-time homebuyers would certainly ease the burden of high cost of living amidst the slowing global economy,” said Standard Chartered Bank Malaysia Bhd chief executive officer Mahendra Gursahani.
They welcomed the government’s tight rein on its fiscal position.
“Despite the challenging global landscape, the government has stayed focused on fiscal consolidation as next year marks the eighth year of narrower fiscal deficit since Malaysia started recording shortfalls back in 1998,” UOB Bank economist Julia Goh said.
Najib, showing his mettle as finance minister, insisted that the country’s economy was firmly on the growth path.
“We are now on the right track, as we have been taking firm, bold and right decisions despite the measures being unpopular.
“I would like to emphasise that all those major and critical decisions were deliberately done and not without in-depth research.”
As he spoke, Pakatan lawmakers walked out after holding placards that made reference to Malaysian Official 1, a description by the United States Department of Justice.
They also accused the prime minister of unveiling a populist budget.
Only Pas lawmakers stayed back in the chambers, refusing to join PKR and DAP members of parliament in snubbing the prime minister.
After his speech, Najib and other Barisan Nasional lawmakers launched a tirade against the Pakatan MPs, accusing them of showing utter disrespect to the house and parliamentary democracy.
In a way, they could be construed as sabotaging the budget, even before it is debated, and by extension, undermining the national economy.
In his speech, Najib defended his unpopular decisions such as GST. He said almost RM30 billion had been collected through GST as of Oct 19, which had helped offset the loss of petroleum revenue due to the 50 per cent drop in crude oil prices.
He said the GST rate of six per cent would not be raised.
Najib was in his element yesterday, dishing the opposition some overdue medicine.
Former premier-turned-critic Tun Dr Mahathir Mohamad was not even spared from Najib’s cynicism.
And in a townhall style presentation, Najib even brought in some newsmakers, national icons and ordinary people into the august hall and referred to them personally in his speech.
The 2017 Budget stood at RM260.8 billion, up 3.4 per cent from the recalibrated 2016 budget.
Revenue collection will grow around three per cent to RM219.7 billion.
The fiscal deficit will drop to 3.0 per cent of gross domestic product (GDP) for next year from 3.1 per cent this year.
Najib put Malaysia’s GDP growth at between four to five per cent next year, against the target of between 4.0 per cent and 4.5 per cent this year.
In parliament, Najib also moved to “clarify repeated allegations and misconceptions” that he said confused the nation, “leading to public unhappiness and restlessness”.
Contrary to certain beliefs, Malaysia is not going bankrupt — in fact the word is “far from the country’s economic dictionary”, he said.
The country was assigned an Arating by Fitch, he said, which was comparable to advanced and large economies such as China, Japan, Korea and Taiwan.