Budget 2016 – What Najib Razak Doesn’t Want You To Know

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Oct 26 2015
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Last Friday, Emperor Najib Razak presented his most challenging budget since he took over the throne in 2009. The Budget 2016, as expected, was heavily decorated with the most refreshing flowers and nicest perfume money can buy in order to divert peoples’ attention from his RM42 billion 1MDB scandal and RM2.6 billion found in his private account.

FBI Department of Justice DOJ - Najib Razak and Rosmah Mansor - inset Riza Aziz

A growing GDP, reduced fiscal deficit, reduction of poverty, lower unemployment, more free money through BR1M, and whatnot were what PM Najib has trumpeted. RM267.2 billion is to be spent where Operational Expenditure of RM215.2 billion (80.5%) against RM52 billion for Development Expenditure (19.5%) has been proposed.


While the disturbing ratio of Operational versus Development Expenditure has already raised red flags, the budget is screaming troubles from whichever angle you look at it. For the first time, multiple ministries see their budget being cut although the fuel subsidies have been cut altogether. Even tax money from GST is insufficient to pay for Najib’s mismanagement. So, what is wrong here?

Budget 2016 - Najib Razak Presenting Budget 2016

Housing – a whopping RM1.6 billion is allocated to build 175,000 PR1MA units, of which Najib administration claims to be 20% cheaper than market price. Last year during Budget 2015, Najib boasted about building 80,000 units of such affordable housing units with RM1.3 billion allocation. A year earlier in 2013, he promised to build 123,000 PR1MA with RM1.9 billion.


So, since the mouth watering project was launched in 2011 and established under the PR1MA Act 2012, PM Najib Razak was supposed to deliver at least 203,000 PR1MA homes under allocation of RM3.2 billion. However, based on Economic Report 2014/2015 released on Oct 2014, it had only built 7,336 units. So, where’re the rest of the houses?

Budget 2016 - PR1MA PRIMA Houses Can See But Cannot Own - Najib Razak

The RM3.2 billion allocation has either gone, or they had built 7,336 inferior houses costing RM436,205 each. So, how can Najib promise to build 175,000 houses with RM1.6 billion in his latest budget 2016? The Maths doesn’t add up. Even if the number 175,000 is cumulative figure since PR1MA started, the numbers are still wrong. Clearly, Najib is scamming ignorant Malaysians?


GST Revenue – this new tax is expected to raise RM39 billion next year, against RM 27 billion collected in the first eight months of 2015, without which the collection would have been only RM18 billion based on the old SST (sales and services tax). So, GST helps to bring in at least RM21 billion every year. But here’re two things Najib doesn’t want you to know.

Najib Razak - Prudent and GST

Firstly, he promised but lied through his teeth about lowering everybody’s personal income tax accordingly, in exchange to taxing people via new GST tax. He even increased from 25% to 26% for people earning between RM600,000 and RM1 million. It’s safe to presume that fuel subsidy was at its minimum last year, the same year when fuel subsidies were scrapped altogether.


Still, in 2014 alone, the government had spent RM21 billion on the subsidies. So secondly, based on a managed float system, essentially Najib administration is living on additional RM21 billion it saves every year. Together with GST revenue, he has at least an extra RM42 billion every year to spend, which his predecessor didn’t enjoy.

Budget 2016 - Najib Razak Gets 21 Billion for Donation - Rosmah Mansor Gets 21 Billion for Shopping

Assuming a family consists of four members; there’re roughly 7.5 families from the 30 million populations. This means Najib administration is milking RM5,600 every year from each family through unsubsidised fuel price and GST which brought in a combined RM42 billion to him. Ask yourself – do you see yourself enjoying RM5,600 of goodies from the budget?


Pan-Borneo Highway for Sabah and Sarawak – Najib announced the highway linking Sabah and Sarawak is to be toll-free and will be completed by 2021. However, there seems to be tons of confusion on this highway. At first, the length was at 2,239 km before it mysteriously becomes 1,663 km. Actually, it was a joint project agreeable for the formation of Malaysia 1963.

Malaysia Agreement 1963 - Malaya - Singapore - North Borneo - Sarawak

Hence, after 52 years the federal government is still talking about constructing a highway as if it is a “brand new” one. The Lawas (Sarawak) to Temburong (Brunei) highway was already completed in 1997. The Tenom-Sipitang (Sabah) was completed in 2006. By the year 2002, it was reported that about 95% of the highway had been completed.


Therefore, for PM Najib to say a 1,663 km Pan-Borneo or Trans Borneo Highway is to be built on RM27 billion of taxpayers’ money is misleading. It’s not a new highway to begin with. Instead, it was a “highway upgrade or maintenance” project which the prime minister has been slapping with the word “new”, literally speaking, year-in-year-out to hoodwink ignorant Malaysians.

Budget 2016 - Sabah Road

RM137 billion of investment initiatives were announced during the 2016 Budget Day. The number is huge and the money is sexy, provided they’re new investment and genuine. Unfortunately, only 3.1% of roughly RM4.2 billion can be considered “real” initiatives, if MP Dr Ong Kian Ming’s analysis is correct.


PM Najib has been notorious for trying to sell a fridge to an Eskimo. He foamed at the mouth about RM3 billion Nexus Karambumi integrated eco-resort initiative in 2011, which never take off till today. Then you have Tun Razak Exchange (TRX), rebranded from initial Kuala Lumpur International Financial District, is stalled due to 1MDB scandal.

Arul Kanda - 1MDB President and Group Executive Director

Marketing wise, Najib’s advisers have done a great job packaging various projects funded by SPVs (Special Vehicle Purposes), GLCs, PPPs (Public Private Partnerships and even private sector together. He has desperately dug and thrown all old projects he could find from the closet to make up the numbers so that it looks impressive.


Sure, there’re some candies for the financial illiterates. Some items will be zero-rated GST. The tax relief for each child below 18 years of age is increased from RM1,000 to RM2,000. The tax relief for the individual taxpayer whose spouse has no income is increased from RM3,000 to RM4,000. Free money BR1M will be continued and the list goes on.

Budget 2016 - Najib Gives BR1M BRIM Money To Buy Votes

But there’re many areas which suffer various cuts this time. Allocation to the Poor Students’ Trust Fund (Kumpulan Wang Amanah Pelajar Miskin) will be cut from RM200 million to a mere RM10 million. Higher Education Ministry’s budget is to be reduced by RM2.4 billion to RM13.378 billion. Does this mean higher tuition fee from next year onwards?


Plantation Industries and Commodities Ministry saw a 60.76% reduction to its budget from RM1.659 billion to RM651 million. A RM950 million cooking oil “subsidy” cut could probably mean a higher price for cooking oil. The Transport Ministry will see a budget reduction of RM648 million which means transportation cost is likely set to increase.

Budget 2016 - Cooking Oil Possible Price Hike

Meanwhile, the allocation for Energy, Green Technology, and Water Ministry will be short by RM605 million. Even the Defence Ministry will see its budget cut by RM459 million. So, where will the saving of RM5.3 billion from the ministries mentioned above go to? Obviously Najib is working very hard cutting every corner to pay for national’s ballooning debts.


It’s quite funny that PM Najib who doubles as Finance Minister didn’t dare to mention how much Petronas will be paying in terms of dividend. The fact that he care to mention Malaysia is not a failed or bankrupt state could be the glaring evidence that this country is precisely that – a bankrupt nation under his management and administration.

Malaysia vs South Korea GDP - 1961 to 2015 Comparison

The people have given up various subsidies and pay more taxes plus suffering from the highest cost of living they could possibly imagine, yet Budget 2016 can deliver so little with every corner being cut. Najib Razak is such a pathetic finance minister that it makes former PM Abdullah Badawi who slept on the job 90% of his time looks like a genius (*grin*).


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