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

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Jan 29 2016
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Prime Minister Najib Razak, reluctantly, has announced a revised Budget 2016. Clearly, it was a tough job to further decorate the budget so that it doesn’t sound too gloomy. When Budget 2016 was unveiled in Parliament last October, the crude oil price was at US$48 (RM199) per barrel. Today, it stands at US$35 (RM145), after a rebound from US$27 a barrel.

Prime Minister Najib Razak - Emperor Crown

When Najib unveiled the Budget 2016 last October, he trumpeted lots of goodies – a growing GDP, reduced fiscal deficit, reduction of poverty, lower unemployment, more free money through BR1M and whatnot. But even then, the national budget was a problematic one because the “Operational Expenditure” of RM215.2 billion constituted 80.5% of overall budget.


What this means is for every RM100 of revenue collected, a disturbing RM80.50 goes to running the government such as salary, rental, maintenance, utilities bill, travel expenses and the list goes on. After getting used to lavish spending and cuts in the initial Budget 2016, there was little room for Najib to get anymore money, lest he wished to cut government servants’ wages.

Malaysia Government Servants

In the latest budget revision, PM Najib Razak who holds a second job as the Malaysian Finance Minister has presented 11-calibration. Out of them, only 2 recalibrated measures should interest you – EPF and GST. The notorious 6% GST has been retained, for obvious reason. Since its introduction on 1 April, 2015, a staggering RM51 billion was collected.


Naturally, Najib can afford to smile and grin from ear to ear because without this new cash-cow, his government would have collapsed. And he took the opportunity to remind (or rather threaten) the Malaysian’s 1.6-million civil servants, majority of whom support Najib’s UMNO political party, that they can keep their jobs because of GST.

Malaysia GST - Collected RM51 Billion

But was it true that the 1.6-million government servants would be jobless had the GST not implemented? Petronas said it will pay RM16 billion in dividend to the government this year (2016), down from RM26 billion in 2015 and RM29 billion in 2014. In his 2016 Budget, PM Najib estimated Malaysia’s oil related revenue at RM31.7 billion this year compared with RM44 billion in 2015.


In other words, the government would collect RM12 billion less from Petronas, including dividend, taxes and export duties this year. Big deal!! But Najib regime is pocketing RM24 billion every year, thanks to the abolishment of fuel subsidy. The RM24 billion in saving is more than enough to cover the RM12 billion temporary losses from Petronas.

Fuel Hike - Car Long Queue

This also means even without the RM51 billion in GST collection, there’s no reason to cut any of the 1.6-million government servants if the money is prudently spent. Essentially, the money collected from 6% GST is extra money “forced” from the 30-million reluctant Malaysians. But hey, RM51 billion in government’s pocket is better than in peoples’ pocket.


In a family of five, Najib administration has squeezed at least RM8,500 from each family in 2015 alone. And whenever the finance minister likes, he can increase GST’s rate further. That’s precisely why the 6% GST remains in the 2016 budget revision. GST is an extremely lucrative cash-cow for Najib’s own survival because he can use it to give “gifts” to 191 UMNO division chiefs (*grin*).

Najib Razak - Laughing - GST Collection RM51 Billion

The smartest move in his budget recalibration was the 3% reduction in EPF contribution by employees. It would be great if employees pay 3% less but the same quantum is offset by the government. But that was not the case. EPF contributors are forced to spend their retirement fund in “advance” so that the government doesn’t have to find money to make ends meet.


By Najib’s own estimation, the reduced EPF contribution would boost spending by RM8 billion. It was a clever move because the government would have the opportunity to slap 6% GST on the RM8 billion to make additional RM480 million. It was like a bank forcing you to take “cash advance” on your credit card so that they can charge you processing fee.

KWSP - EPF Building

EPF contributors would have 3% less in their saving – every month – from March 2016 until December 2017. Therefore before one applause and get excited about having extra cash to spend every month, one has to realize that the so-called extra cash was yours in the first place. Because financial wizard Najib Razak didn’t know how to get money, he has chosen to squeeze it from your retirement fund.


Actually, the government is broke. Allocation to the Poor Students’ Trust Fund (Kumpulan Wang Amanah Pelajar Miskin) was cut from RM200 million to merely RM10 million. Higher Education Ministry’s budget was reduced by RM2.4 billion to RM13.378 billion. Plantation Industries and Commodities Ministry saw a 60.76% reduction to its budget from RM1.659 billion to RM651 million.

Marina Mahathir - Najib Razak Korek EPF Retirement Fund

The Transport Ministry saw a budget reduction of RM648 million. Energy, Green Technology, and Water Ministry was short by RM605 million. Defence Ministry saw its budget cut by RM459 million. These budget cuts, announced during 2016 Budget last October, would save RM5.3 billion. But Najib wanted RM8 billion more of your EPF money.


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Every one get cut and every department gets cut, except the PMO!!!!!!

WTF are you talking about? You CAN opt to leave it at 12%, it’s not mandatory to accept the lower contribution figure. Was it cut for the companies’ portion? No? Then shut your gob and stop trying to scare people.

rambling mind … when it was first announced, it didn’t mention mandatory nor optional …

only after much criticism the government said optional … still, by default is it mandatory or optional? go figure …

You an amateur economist trying to do back of the envelope BS to impress yourself?

1. What taxes did GST replace? It isn’t a completely new income at RM50b. How much was being collected in the predecessor forms i.e. NET increase? Do your research.
2. Our oil revenues are down because of global markets. This has nothing to do with the Najib “regime”.
3. Your language is hilarious. The “regime” “pocketed”. They’re a democratically elected government who have the mandate to tax.
4. The extra 3% is so they can collect more GST? I got tired of reading all your dumb comments but this one was dumbest. Don’t take the option or use the money to pay down a non-GST incurring liabilities like a loan or reinvest it. Either way you’re better off.
5. Stop pretending to be an economist. Im not a fan of the government for what I perceive to be corruption, mismanagement but that doesn’t leave us on the same team. Write a political activist.

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