Budget 2017 – What Najib Razak Doesn’t Want You To Know

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Oct 24 2016
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Budget 2017 revealed by Malaysian Prime Minister Najib Razak was both boring and interesting. It was boring because the scandal-hit Najib tried to hoodwink ignorant people that everything in the garden is still rosy. It was interesting because the shameless Najib finally admitted his administration has successfully dried the country’s treasures.


When Najib trumpeted a bag of goodies during Budget 2016 last October, there were supposed to have growing GDP, reduced fiscal deficit, reduction of poverty, lower unemployment, more free money BRIM and whatnot. Then KABOOM!! Crude oil plunged to US$27 a barrel before rebound to US$35, forcing a budget revision where the government did an 11-calibration.

Prime Minister Najib Razak - Emperor Crown

The so-called 11-calibration was itself a gimmick because it had forced EPF contributors to contribute 3% less, forcing the employees to spend their retirement funds “in advance” so that Najib administration wouldn’t be burdened with a responsibility to find money to make ends meet. By Najib’s own estimation, the reduced EPF contribution would have boosted spending by RM8 billion.


More importantly, without lifting a finger, the government managed to make additional RM480 million from the 6% GST supposedly slapped on the RM8 billion spending (assuming every contributor chooses the option to contribute 3% less). It was like a bank forcing its credit card holders to take “cash advance” so that they can charge processing fees.

Malaysian Ringgit - Old GST 6 Percent - New GST 8 Percent

When Najib unveiled the Budget 2016 last October, the crude oil price was at US$48 a barrel. When he revealed the Budget 2017 on Friday, the crude oil price was trading at US$50 a barrel. Therefore, the crude oil prices were roughly the same when both budgets were announced. But there’re certainly some items which Najib doesn’t want people to know.



{ 1 } GST Collection

The only thing that is stopping a corrupt Najib government from hiking the current 6% GST to 8% is the plan to call for a snap election. The GST collection has reached nearly RM30 billion as of 19 October 2016 and is expected to register RM38.5 billion for the financial year 2016. Najib hopes to make a cool RM40 billion in GST (goods and services tax) next year.

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

After subtracting the old SST (sales and service tax) of RM18 billion, this means GST brings in about RM21 billion – every year – to the government. Using 2014 figures, an old RM21 billion fuel subsidy has now turned into saving for Najib administration. In short, Najib has RM42 billion of excess money which his predecessor didn’t enjoy, thanks to GST and fuel subsidy abolishment.


Najib claims his government is losing an estimated RM30 billion from income tax, corporate tax, royalty, PETRONAS dividend and Petroleum Income Tax. However, he doesn’t want the people to know that his government actually has an extra RM12 billion (RM42 billion – RM30 billion) cash even when the country is suffering RM30 billion of revenue loss due to low oil prices.



{ 2 } PR1MA Affordable Housing

Najib proudly declared a staggering RM1.6 billion in allocation to build 175,000 PR1MA housing units during last year’s budget. A year earlier in 2015, the same guy boasted about building 80,000 units of such affordable houses with RM1.3 billion allocation. That was after he promised to build 123,000 PR1MA units based on RM1.9 billion allocation in 2013.

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

Assuming those sexy figures were accumulative, Najib was supposed to deliver 378,000 PR1MA units worth RM4.8 billion, or at least some groundwork were in order. Even if those figures were “not accumulative”, at least 123,000 houses promised in 2013 should be almost ready for occupation after 3 years. Are even half of the units ready for the people?


Interestingly, Najib revealed during his Budget 2017 that “to date only 12,000 units worth RM3.3 billion has been booked, while 85,000 units are at various stages of approval”. Yes, “only 12,000 units have been booked”, without any mention about the status of construction or delivery date. So, the figures of hundreds of thousands of houses were used to scam ignorant voters after all.



{ 3 } Pan-Borneo Highway

Najib screamed until his veins collapsed during last year’s budget about toll-free Pan-Borneo Highway for Sabah and Sarawak. While chest-thumping like in a Bollywood star, he told Sabahan and Sarawakian about spending RM27 billion on the 1,663-km highway, as if it was a brand new expressway, when in fact it was an “upgrade” project agreeable for the formation of Malaysia 1963.

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

Of course, his sudden interest last year was to hoodwink the illiterate and ignorant people of Sarawak. Now that his administration has been given a bigger victory after the Sarawak state election, Najib isn’t bother about the highway anymore. He had just briefly mentioned about the acceleration of the project, whatever that means. The con job works fabulously.



{ 4 } Huge Haircut For Prime Minister Department

Malaysian Prime Minister Department is one of the most bloated in the world.  Like a “black hole”, nobody knows why the heck it needs so much money to operate. There are 9 Ministers, 3 Deputy Ministers and a staggering 51 divisions in the Prime Minister Department. During Mahathir Mohamad’s rule from 1981 to 2003, it never exceeded RM5 billion.


Abdullah Badawi administration from 2003 to 2009 saw the department’s expenditure rising from RM3.5 billion to RM6.9 billion in 2008. After Najib Razak took over in April 2009, the department’s allocation skyrocketed to RM10.2 billion in 2009 alone. Within 7 years from 2009 to 2016, Najib doubled the allocation for his department to RM20.3 billion in 2016.


Clearly, Najib’s strategy of splashing money wasn’t for development, let alone good governance but for popularity contest. Surprisingly, the highly unpopular prime minister made a huge haircut to his department in the Budget 2017, slashing RM4.4 billion or 21.7% from 2016’s allocation to RM15.9 billion, the first of its kind since he took over the premiership.

Donald Trump and Warren Buffett - Business Philosophy - Debt

Why did Najib cut his department’s allocation, the largest budget cut so far? Had he gotten approval from his wife Auntie Rosie? Don’t Najib and Rosmah want to be popular anymore? There’s only one reason for such a cut – the country has very limited money left – otherwise there’s no way Auntie Rosie would have allowed Najib cut the flow of money to “her department”.



{ 5 } External Debt Service Charges

Under Najib administration, the country has successfully borrowed RM833 billion as of end of 2015, and there’s very little reason to believe it would be any lesser this year. As the sins of the past catches up with the government of the day, the chickens have come home to roost. This year alone, a mind-boggling RM26.6 billion is needed to service debt, an increase of RM2.36 billion from 2015.

Malaysia Government Gross Debt 1990-2015 - Finance Minister Performance

For the next year in 2017, the amount would further increase to RM28.9 billion. This means every single Malaysian out of 30-million populations – including newborn babies – has to pay RM886 this year to service debt interest. We haven’t talked about the actual debt, which is ballooning every second. But where did all the debt comes from?


The biggest expense comes from emoluments, eating 29.7% of Budget 2017 totalling RM260.8 billion. Because the BN government would collapse without votes from civil service, graduates (including those unemployable) were employed unnecessarily, swelling salary payments to RM73.9 billion this year and RM77.5 billion next year.


Throw in corruption, wastages and inefficiency, the easiest solution to solve the problems was to borrow more to finance them, which in turn would push up the country’s external debt, and the process continues. But Najib can’t fire or retrench the civil service, let alone tell all and sundry that his government is fabulously corrupt.


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