Friday, October 21, 2016

2017 Malaysian Budget: Full Speech Text



Mr Speaker Sir,  

I beg to move the Bill intituled "An Act to apply a sum from the Consolidated Fund for the service of the year 2017 and to appropriate that sum for the service of that year" be read a second time.  

Mr Speaker Sir,  


Alhamdulillahi Rabbil Alamin Wabihi Nasta'in  

1. Praises be to Allah, for His blessings that we are gathered here today, 21 October 2016, for the tabling of the 2017 Budget.  

2. Peace be upon Prophet Muhammad, the chosen messenger.  

3. Dear Allah, the Best Planner, we pray for Your guidance and we seek for Your grace. 

Mr Speaker Sir,  

4. We like to take this opportunity to welcome home the 23,000 Hajj pilgrims. May your Hajj be accepted by the All Mighty. InsyaAllah.  

Mr Speaker Sir,  

5. Since the past six decades, many budgets have been tabled.  

6. The first post-independence budget was presented in the parliament in 1959 with only a total allocation of RM888 million, while the current 2017 Budget stands at RM260.8 billion.  

7. For the past 60 years, the Parti Perikatan and now, the Barisan Nasional Government has successfully sustained the GDP growth at an average of six per cent 6% per annum.  

Alhamdulillah, Alhamdulillah,  

Mr Speaker Sir,  

8. The 2017 Budget allocates a sum of RM260.8 billion, an increase of 3.4% from the 2016 Budget Recalibration.  

9. Of which, RM214.8 billion is allocated for Operating Expenditure, while RM46 billion for Development Expenditure. This does not include contingencies which amounts to RM2 billion.  

10. Under the Operating Expenditure, a total of RM77.4 billion is for Emolument and RM32 billion for Supplies and Services.

11. Meanwhile, a sum of RM103.9 billion is allocated for Fixed Charges and Grants. A sum of RM691 million is allocated for Purchase of Assets, while RM816.6 million for Other Expenditures.  

Mr Speaker Sir,  

12. Under the Development Expenditure, the economic sector will receive the highest share of RM25.9 billion, followed by social sector with RM12.2 billion. The security sector will be allocated RM5.3 billion and the general administration more than RM2.5 billion.  

13. The revenue collection in 2017 is expected to expand at around 3% to RM219.7 billion.  

14. In addition, the Government is expected to achieve the fiscal deficit target of 3% of GDP in 2017, compared with 3.1% this year.  

15. Mr Speaker Sir, Ladies and Gentlemen...I understand that these figures and numbers may not be easily understood. 

16. In reality, the Government is always committed to implement an optimum budget for rakyat through prudent spending even though we are faced with global economic uncertainties.  

Ladies and gentlemen,  

17. The definition of prudent spending by the Government is similar to a sensible father or head of family manages his finances to meet household needs.  

18. In other words, if previously we could afford expensive toys, however, in the present situation we could continue to do so but within our means.  

19. This is also applicable for food and dining where one is advised to spend in moderation according to ones need.  

20. Furthermore, Malaysia is known as Food Haven.  

21. For example, during the recent Independence Message, I had given examples of good food at a reasonable price such as the Nasi Kandar Vanggey in Ipoh.  

22. I found out that a young female local graduate is selling 'Nasi Lemak Anak Dara' in Shah Alam. It went viral that she was summoned.

23. Nevertheless, the Government encourages such individuals, especially graduates to venture into entrepreneurship and we pray for their success.  

Mr Speaker Sir,  

24. In formulating the 2017 Budget, we have drawn learnings from the Surah Yusuf verses 43 to 49. As interpreted by the ulamas, one should plan and prepare during the first seven years, while facing the subsequent seven years of challenges in order to sustain economic resilience.  

25. As a lesson learnt from the above historical event, about seven years ago, in 2008, Malaysia was also affected by the global economic slowdown.

26. Therefore, upon my appointment as the Minister of Finance, under the leadership of the former Prime Minister, Tun Abdullah Ahmad Badawi, we launched the First Economic Stimulus Package, amounting nearly RM7 billion to revitalise the economy.  

27. The first stimulus package was just an interim measure. Subsequently in March 2009, a month after I took over the office as the Prime Minister, the Second Economic Stimulus Package of RM60 billion was implemented.  

28. Clearly, this was a proactive measure to stimulate the slow economic growth at that time. As a result, the economy rebounded with GDP reaching 7.4% in 2010.  

Mr Speaker Sir,  

29. Alhamdulillah, following the various incentives from the stimulus packages as well as seven previous Budgets, our economy remains stable and on a positive trajectory.  

Mr Speaker Sir,  

30. In reality, the current uncertainties in the external economy are beyond our control. 

31. The slower external economic growth is caused by subdued growth among all major economies, simultaneously.  

32. As a result, global growth is expected to moderate 3.1% in 2016 from 3.2% in 2015.  

33. Nevertheless, we are grateful that our economic growth remained stable and sustainable during first half of the year.  

34. Clearly, the country’s economy grew at 4.1% and we are confident of achieving a growth between 4% and 4.5% in 2016 and between 4% and 5% in 2017.  


35. Indeed, we are now on the right track, as we have and are taking right decisions even though the measures were unpopular. 

36. I would like emphasise, that all those major and crucial decisions were deliberately done.  

37. As the saying goes, save for a rainy day, we have laid strong foundations for the country's long-term financial and economic position.  

Mr Speaker Sir, Ladies and Gentlemen,  

38. All these were achieved due to the Governments diligence and planning, focusing on various strategic measures since 2010.  

39. Firstly: Diversifying the Governments sources of revenue,  particularly to reduce the dependency on oil and gas sector-related revenue from 41.3% in 2009 to 14.6% in 2016.  

40. As a result of further diversification of our economy, the growth had been resilient and sustained despite the recent decline in oil prices by almost 50%. 

41. Second: The Government’s bold measure to implement GST had diversified the sources of revenue.

We should realise that there are only 2.1 million income tax payers out of 14.6 million of the country’s total workforce.  

42. In addition, with the recent fall in oil prices, it is estimated a loss of Government’s revenue by RM30 billion from income tax, corporate tax, royalty, PETRONAS dividend and Petroleum Income Tax.  

43.Hence, we should be grateful with the implementation of GST, as the Government is able to support its expenditure amid limited resources.  

Mr Speaker Sir,  

44. I am pleased to report, the GST collection has reached nearly RM30 billion as of 19 October 2016.  

45. I would like to stress, we should not believe the grapevine of the increase in GST rates. Those are just hearsays and are untrue.

46. Third, Subsidy Rationalisation. For example, the oil subsidy in 1995 stood at RM123 million, constituting only 0.24% of the overall national budget.  

47. At its peak in 2012, it reached RM24.8 billion or 9.8% of the overall national budget.  

48. Overall, the inefficient bulk subsidy system clearly burdens the Governments financial position and causes leakages. As such we have replaced it with a targeted subsidy system, benefitting those who are really in need.  

Mr Speaker Sir,  

49. It is evident, through measures and initiatives implemented by the Government, our economy records sustainable growth. According to the Purchasing Power Parity (PPP), Malaysia is now an upper middle-income country, surpassing many countries not only in Asia but also throughout the world.  

50. Malaysias PPP per capita has increased from USD23,100 in 2012 to USD26,891 in 2015.

51. From a different angle, the Government is aware of the rumours on the so called deteriorating investors confidence on the Malaysian economy.  

52. A nation’s economy is highly related to perception, as without confidence there will be no investment to drive the economy.  

53. But, if our own people, undermine and sabotage our economy, we are bringing down our own nation.  

54.Therefore, accusations by irresponsible internal and external parties must be stopped!  

55. Despite many challenges, the Barisan Nasional Government will do what it takes for the beloved rakyat, from Peninsular to Sabah and Sarawak, we will continue to propel the country forward.

56. Syukur Alhamdulillah, facts and figures have proven the truth.  

57. For example, the total approved foreign investment was more than RM28 billion during the first half of 2016, an increase by 32% compared with the same period last year.  

58. This excludes approved domestic investment which totalled to more than RM60 billion.  

59. In fact, during my official visit to Germany last month, I met the business community who expressed their interest to continue to invest in Malaysia as they are confident with the Governments sound policies, meeting their expectations.

60. For example, OSRAM has announced an investment worth EUR1 billion or equivalent to nearly RM5 billion.  

61. This LED plant investment in Kulim, Kedah will be the largest and the latest in the world.  

62. Insya-Allah, next week I will be heading to China and we hope to attract more investment.  

63. Recently, according to Kaushik Basu, Chief Economist and Senior Vice President of the World Bank, as many nations suffer because of falling commodity prices, Malaysia stands out for having transformed itself from a poor, commodity-exporting nation to a modern diversified economy.  

Mr Speaker Sir,  

64. Each time the budget is discussed, many intellectuals will refer and deliberate on several important verses in the Al-Quran, among others, Surah Al-Hasyr verse 7, that, do not allow wealth to circulate only among the rich.  

65. I have sought views from various ulama and learned Muslims regarding this verse. They interpreted that this verse has to be seen from a wider and more holistic context.

66. As elaborated by Imam Al-Mawardi, provisions or allocations to the rakyat such as in this Budget are subjective, taking into consideration their needs and benefits.  

67. Indeed, to formulate a complex budget is not an easy task. As a Government that feels the pulse of the rakyat, in the past months, we have received thousands of ideas from various segments of the society.  

Mr Speaker Sir,  

68. The 2017 Budget is anchored on five principles and philosophies of the Government.  

First: This Government prioritises national integration in forming a nation state. Our ethnic diversity is an essential asset in the past, present and future;  

Second: This Government prioritises and preserves sovereignty, upholding the Constitution and laws as well as national security;  

Third: This Government is cohesive and stable as well as work as a strong team;  

Fourth: This Government is a diligence Government with a clear direction, systematic planning as well as holistic, efficient and structured implementation plans. Indeed, this Government has delivered, we are still delivering and most importantly, we will continue to deliver; and  

Fifth: We uphold the national ideology, which is the Rukun Negara. As such, in governing the country, the Government has been firmly upholding the universal Islamic philosophy and principle of Wasatiyyah. This philosophy comprises moderation; balance; social justice; fairness; and excellence.  

This means that we are always striving for excellence, not just average and complacent, what more to settle for mediocrity.  

Mr Speaker Sir and beloved rakyat,  

69. While we strive to succeed through joys and sorrows, we have never forgotten exemplary leaders who have inspired us.    

70. In this regard, we would like to express our deepest condolences to families of several individuals who have served the nation. I would like to share their stories though they were not members of Parliament. 

71. First, Allahyarham Tan Sri Haji Abdul Aziz Tapa, who loyally served the party and people till he was 93 years old.  

72. Second, another close family friend, Allahyarham Tuan Guru Dato Dr Haron Din.  

73. Indeed, Malaysians have lost two respected figures.  

74. Clearly, despite our political differences, Allahyarham Tuan Guru was highly respected for his contribution to the ummah. As such, the Government has conferred him the 2016 Maal Hijrah Special Award. We are sad and disappointed that there are certain parties that openly hate and insult him.  

Mr Speaker Sir,  

75. In fact, during my visit to the hospital, Allahyarham Tuan Guru hinted that both the feelings of love and hatred should not be too extreme.  

76. Al-Fatihah.  

Mr Speaker Sir,  

77. We are approaching six decades of independence. During these years, public servants, which currently stand at 1.6 million have been the backbone and pillar of the nations administration.  

78. To appreciate the contribution of public servants, I am pleased to announce the following:  

First: To extend the fully paid Study Leave with scholarship to the Support Group, that is currently limited to Management and Professional Group;  

Second: To grant Quarantine Leave up to five days without record to public servants whose children are ill and required to be quarantined;  

Third: This years Budget will extend the existing Computer Loan facility to encompass the purchase of smartphone. This facility can be utilised by public servants once every three years with a maximum loan of RM5,000; and  

Fourth: The Government has also decided to increase the motorcycle loan limit from RM5,000 to RM10,000.  

Mr Speaker Sir,

Fifth: The Government is concerned with public servants housing needs and is committed to enable them to own houses.  

As such, the Government is pleased to increase the public servants housing loans eligibility from between RM120,000 and RM600,000 to between RM200,000 and RM750,000;  

Sixth: To complete 30,000 units of 1Malaysia Civil Servants Housing (PPA1M) with selling price between RM90,000 and RM300,000, which is 20% below the market price;  

Seventh: To extend the contract of service and contract for service officers, expiring end of this year, for at least one year;  

Eighth: To address the issues of specialist doctors leaving the public service and delays in promotion, the Government will introduce a grade 56 between grade 54 and JUSA C for medical and dental specialists; and  

Ninth: To appoint the first group of doctors, dentists and pharmacists on contract latest by December 2016 due to constraints in permanent posts.  

For information, nearly 2,600 doctors who were unable to undergo housemanship in any hospitals will now serve on contract. Hopefully, this will be good news to them and their families.

Mr Speaker Sir,

79. Before proceeding with the tabling of the budget, allow me to clarify several repeated allegations and misconceptions that create fear among the rakyat, leading to public confusion on Malaysia's economic situation.  

80. First misconception and misperception the Government will go bankrupt.  

81. In this regard, I would like to clarify that a government will be declared bankrupt only if it is unable to pay off its debt.  

82. There are three reputable international rating agencies, namely, Fitch, Moody's and Standard  and  Poor's.  

83. The ratings and reports from these rating agencies are accepted in assessing a country’s ability in paying off its debts.  

84. As a comparison, Fitch had rated Malaysia with A- compared with the Philippines (BBB-), Thailand (BBB+) and Vietnam (BB-).  

85. In fact, our rating is similar to that of advanced and larger economies such as Republic of Korea (AA-), China (A+), Taiwan (A+), Japan (A).

86.This means, bankruptcy is never in Malaysia’s economic dictionary!  

Mr Speaker Sir,  

87. Second allegation Malaysia is said to be a Failed State.  

88. This is a false accusation. I would like to clarify the meaning of a failed state. It refers to a country that fails to implement most of its responsibilities and basic functions of a government.  

89. This includes the failure of police and armed forces in maintaining national security and public order of the country; failure of the Government to pay salary of the civil servants; failure in providing basic amenities such as water and electricity as well as hyperinflation that could collapse the economy.  

90.These characteristics do not exist in Malaysia and with the blessings of Allah, this Government will never allow our country to become a failed state. 

91. This Budget is not intended to benefit any particular group. However, it is engineered to be inclusive for the well-being of the rakyat.  

92. As illustrated in a household income pyramid, there are three main categories of rakyat in our country, namely T20, M40 and B40.  

93. For the M40 group, the household income ranges between RM3,900 and RM8,300.  

94. This M40 group includes singles as well as most working married couples, highly educated and skilled.  

95. Alhamdulillah, this group do not face difficulties in meeting their basic needs. However, the Government intends to increase their disposable income.

96. This includes aspects such as job security, increase in income from time to time, housing, safety, education, health as well as balanced lifestyle among work, recreational and quality time with their families.  

Mr Speaker Sir,  

97. For public knowledge, B40 refers to the bottom 40% of households with monthly income RM3,900 and below. From the macroeconomic perspective, the existence of this group is common in any developing countries.  

98. According to Khazanah Research Institute Report, the household income of the B40 households recorded faster growth rate compared with the income growth of M40 and T20 groups. 

Mr Speaker Sir, ladies and gentlemen and beloved rakyat,  

99. In the 2015 Budget, I have defined People Economy and Capital Economy.

This time, I would like to add another important concept towards becoming an advanced economy i.e. public happiness.  

100. What I mean, this Budget is not merely about income but it is related to quality of life such as free from crime, enjoy clean environment, with various colourful arts and cultures.

101. Also, attaining higher education, raising ones academic and intellectuality; with guaranteed healthcare services as well as access to efficient public transport.  

102. With regard to environmental matters, we must continue to preserve our nature especially water catchment areas and declare these areas as forest reserves and national parks are kept as well as protected from intrusion. This will only become a reality if all state governments provide full cooperation in collaboration with the private sector and the rakyat.  

Mr Speaker Sir,  

103. For the well-being of the rakyat, the Government remains committed to implement Rakyat Centric projects and programmes in urban and rural areas, as follows:  

First: From the information and site visits, there are still villages without street lights.  

To brighten the villages at night, a total of 97,000 street lights and 3,000 LED lights will be installed at crossroads.

This involves 7,500 villages nationwide, including Sabah and Sarawak.  

Second: To enhance connectivity of villages, towns and cities, a total of 616 kilometres of village roads and bridges will be built and upgraded with an allocation of RM1.2 billion;  

Third: To maintain state roads, a total of RM4.6 billion is allocated to all states under the Malaysian Road Records Information System (MARRIS);  

Fourth: To build and refurbish 17,000 units of destitute and dilapidated houses in remote villages and Orang Asli settlements with an allocation of RM350 million.  

Each unit will be given a assistance for renovation between RM1,000 and RM15,000 depending on the condition of the houses; and  

Fifth: To increase the supply of clean water with an allocation of RM732 million, targeting 5,200 houses, including the upgrading of FELDA water supply system.  

104. In recent times, we have been facing various water supply issues in several states including lack of supply capacity; drought; pollution from industrial wastage and logging; and pipe leakages.  

105. To improve capacity and ensure water supply, the Government will allocate grants totalling RM156 million and loans amounting to RM509 million. 

More to come

*Taken from The Star Online

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