BUDGET 2016: Key Highlights In 18 Segments And All You Need To Know

1. The Malaysian economy grew by 5.3% in the first half of 2015 and is expected to expand between 4.5% and 5.5% this year despite a slower global growth of 3.1%. Najib notes that the government is aware that the country is not spared from the impact of a slowdown in the global economy, including declining commodity prices, particularly crude oil, palm oil and rubber, depreciation of the ringgit and slower growth in major advanced economies.

However, the nation's Gross Domestic Product (GDP) is expected to expand between 4% and 5% in 2016. Growth will be driven by private investment and consumption at 6.7% and 6.4%, respectively. Exports will grow by 0.9% and imports by 1.5%, while the construction sector will expand by 8.4%, services 5.4% and manufacturing 4.3%.

2. Fiscal deficit had decreased from 6.7% to 3.2 % in 2015. In 2016, fiscal deficit is expected to decline to 3.1% of GDP.

3. Through the National Transformation Policy (NTP) commencing 2010, the Government continued to vigorously eradicate poverty. Over the five-year period, the incidence of poverty has been reduced from 3.8% in 2009 to 0.6% in 2014. In fact, hardcore poverty has almost been eradicated.

4. The unemployment rate has been reduced to 2.9% and the Government has succeeded in creating 1.8 million jobs, compared to 3.4% in 1999.

5. A total of 5 million rakyat in rural areas have benefited from basic amenities such as electricity and clean water supply.

6. The rakyat has benefited from several initiatives such as Bantuan Rakyat 1Malaysia (BR1M), 1Malaysia Clinics, Urban Transformation Centres (UTCs), Rural Transformation Centres (RTCs) and Kedai Rakyat 1Malaysia, towards reducing the cost of living.

RM267.2 billion is parked under Budget 2016 compared to the revised RM260.7 billion in 2015.

- Out of RM267.2 billion, RM215.2 billion is allocated for Operational Expenditure, which includes emoluments (RM70.5 billion), supplies and services (RM36.3 billion), fixed charges and grants (RM106.6 billion), purchase of assets (RM761 million), and other expenditure (RM1 billion), and RM52 billion Development Expenditure for the economic sector (RM30.1 billion), social sector (RM13.1 billion for education, training, health, housing, and rakyat's well-being, security sector (RM5.2 billion), general administration (RM1.6bil), and contingencies (RM2 billion).

- GST collection is estimated to hit a target of RM23.7 billion in 2015 since its implementation on 1 April.

- National revenue would be reduced by RM21 billion if there was no GST. If Malaysia stuck to the Sales Service Tax (SST), collection would be only RM18 billion, compared to GST's RM39 billion. If Malaysia did not implement GST, national deficit will be 4.8%. With GST, deficit expected to be 3.1% for 2016.

- Zero-rated GST medicine will be increased from 4,215 kinds of medicine to 8,630. List of zero-rated items will now include formulated milk for children, dhal, brown sugar, and dry mee kolok.

- GST amount will be credited in the value of prepaid mobile services from 1 January to 31 December 2016. GST amount paid will be credited back to users.

- Highest tax rate raised to 28% (from 26%) for those earning above RM1 million, while those earning between RM600,000 to RM1 million will be taxed 26% (from 25%).

- The Government will continue to make the right decisions in the best interest of the people and nation, although they may not be popular ones.

- Malaysia is not in a failed or bankrupt state, as reported by certain media, but stable with strong economic fundamentals and remains competitive, although the country will not be spared from the impact of global economic slowdown, declining commodity prices, ringgit depreciation, slower growth in advanced economies.

1. Strengthening Economic Resilience
2. Increasing Productivity, Innovation & Green Technology
3. Empowering Human Capital
4. Advancing Bumiputera Agenda
5. Easing the Cost of Living of the Rakyat

9 high-impact domestic projects worth RM6.7 billion.

- RM730 million for the development of chemical industry, electronic and electrical machines, aviation, medical equipment and services.

- Aims for 30% women involvement in decision-making levels in public and private sector.

Tourism expected to contribute RM103 billion. E-Visa for 7 countries - including US, China, and India - available in mid-2016 to make it easier for ppl to visit Malaysia. -

- RM5.3 billion to modernise farming.

- Malaysia has signed 13 Free Trade Agreements and the Government has accepted in principle the TPPA, but that will still be subject to debate in Parliament.

SME in Malaysia to contribute 41% by 2020. SMEs that spend for R&D are eligible for tax cuts twice.

- RM50 million provided to SME Bank to help entrepreneurs.

- Transformation programs TUKAR and ATOM allocated RM18 million.

- TEKUN will provide RM500 million for Bumiputras and RM100 million for Indian small business owners.

- Small traders and Chinese businessmen to receive RM90 million as micro-credit loans.

Malaysia will continue to improve infrastructure. We are currently 25th among 160 countries for the Logistics Performance Index.

- RM28 billion for new MRT projects that will benefit 2 million residents. MRT Ampang is expected to begin its service in March 2016.

- LRT3 project worth RM10 billion from Bandar Utama, Serdang, Johan Setia, Klang spanning to start in 2016.

- RM67 million allocated for improving bus operation routes outside the city.

- PM unveils 'Aeropolis KLIA' project, develop Malaysian Vision Valley from Nilai to Port Dickson.

- Government to continue high-speed rail negotiations with Singapore government.

- RM200 million to improve roads in Felda settlements.

RM41.3 billion allocation for the education sector with plans to build more schools in Kedah and Perak.

- RM38.5 million to promote a dual language program and highly immersive program, with 300 schools as starters. Budget 2016 also mentions the aim to strengthen the English language in schools.

- RM100 aid for households with income below RM3,000 to continue. Expected to benefit 3.5 million students.

- RM250 1Malaysia book voucher will be available for 1.2 million students and will continue to be recognised only in bookstores.

- MARA is allocated with RM3.7 billion to sponsor 72,000 Bumiputera students in higher education.

- RM360 million for improvement of National Service (NS).

RM1.2 billion to improve internet speeds from 5mbps to 20 mbps.

- RM250 million to be provided for national broadcasting digitalising project to enhance audio visual quality and more valuable television content.

RM1.6 billion allocation to build 175,000 PRIMA units which will be sold 20% below market price.

- RM200 million to build 10,000 Mesra Rakyat homes, with RM20,000 subsidy for each unit.

- 100,000 houses will be built for civil servants and expected to be ready by 2018.

- RM200 million for first home deposit funding scheme. RM200 million allocation for home buyers provided under First Home Deposit Scheme.

- 22,300 flats and 9,800 terrace houses to be built under Rakyat Housing Scheme.

- 20,000 homes for Felda. Max price down to RM70k compared to RM90k previously.

- 800 units of affordable homes by GLCs near MRT stations in the city center.

- 5,000 Rumah Prima housing units and PPA1M to be built in 10 locations near LRT Monorail stations.

- RM155 million to maintain public low-cost homes and 1Malaysia Maintenance Fund.

RM878 million to be provided to the Rural Electrification Project that will involve 10,000 houses.

- RM568 million for the Rural Water Supply Project that will benefit 3,000 homes.

- RM1.4 billion allocated to improve rural roads in Malaysia, with 700km of roads all around the country.

- RM67 million will be allocated to the MARA Bus Transport Project to operate on uneconomic routes in rural areas.

- RM150 million to improve 11,000 poor people's homes in rural areas.

- All domestic economy class flights will be exempted from GST for rural folk.

RM300 million allocated for the Orang Asli community’s development and welfare.

- RM69 million for Orang Asli home construction.

- RM45 million allocated to assist Orang Asli students (pocket money, food, and transport facilities).

RM115 million allocated for Sabah and Sarawak Bumiputra facilities.

- RM515 million to improve electricity supply in Sabah.

- Pan-Borneo highway will be toll-free when completed in 2021; will be 1,090km long and costs RM16.1 billion.

- RM70 million interest-free loans for long house building, with a limit of RM50k loan for each unit.

- RM20 million for 1Harga 1Sabah and 1Harga 1Sarawak programs to ensure streamlined prices in certain products.

Government to build 5 new hospitals in Pasir Gudang, Kemaman, Pendang, Maran and Cyberjaya. Kajang General Hospital to be renovated.

- RM52 million for 328 1Malaysia clinics.

- RM4.6 billion for vaccination, consumables and medicine in public hospitals.

- 33 brand new 1Malaysia clinics will be opened.

- New boats and facilities for 1Malaysia clinics in rural areas.

RM13.1 billion to improve safety and national security.

- Number of MACC officers will be increased according to the needs to fight corruption.

- Police force increased by 6,000 to improve public safety. 500 units of motorcycle and 500 units of patrol cars for police worth RM35 million.

- RM20 million for safe city programs in 60 black spot areas, like separating pedestrian walkways and better lighting

- RM50 million allocated to improve security levels in prisons.

- RM17.3 billion allocated for Defense Ministry to develop Armed Forces, include purchasing 6 Littoral Combatant Ship, tanks, Airbus A-400M etc.

- 2000 affordable homes to be built for military personnel.

- RM523 million allocated for ESSCOM in Sabah.

- RM864 million to obtain offshore patrol vessel and patrol boats.

- RM60 million to be spent in social amenity projects and flood prevention efforts.

- RM180 million for disaster management, RM730 million for flood mitigation projects, RM60 million for flood warning system.

Singles earning less than RM2,000 to receive RM400.

- For families with household incomes of RM3,001 to RM4,000 to receive RM850.

- For families with household incomes of RM3,000 and below to receive RM950.

- All individuals under the e-Kasih initiative with an income of RM1,000 and below will receive RM1,050.

- BR1M to continue for 4.7 million households.

RM2 billion allocation for OKU, senior citizens and poor families; RM350 per month for working OKU, RM200 per month for unemployed OKU, and RM300 a month for bedbound OKU.

- Parents of OKU children can claim for RM6,000 tax relief. If said child furthers his/her studies, then the parents are allowed to claim for another RM14,000.

- RM2 billion allocated to the Ministry of Women, Family and Community Development for the disabled, senior citizens and families below poverty level.

- RM662 million to help children from poor families; aid of RM100 to RM450 a month.

- RM300 a month aid for poor senior citizens.

West Malaysia: From RM900 to RM1000 starting from 1 July 2016.

- East Malaysia: From RM800 to RM920 starting from 1 July 2016.

M40 group, income between RM3,860 to RM8,320, gets RM2000 tax relief for every kid under 18.

- Tax exemption of RM4,000 instead of RM3,000 for those with a spouse with no income (sole breadwinners).

- Children supporting parents, even if not living together, get tax relief of RM1500 for both parents, if parents are above 60 years.

- Tax exemption of RM8,000 instead of RM6,000 for every kid above 18 years in an education institution both local or overseas.

- Parents with OKU kids get RM6k tax relief and another RM14k if their child furthers their studies.

RM500 for all civil servants and RM250 to all 700,000 govt retirees. Both payments worth RM1 billion to be paid on Jan 1, 2016.

- Pay raise for civil servants: RM1.1 billion to raise wages according to grade to benefit 1.6 million government servants.

- RM1,200 minimum wage in civil service to benefit 60,000 civil services

- Minimum pension at RM950/month to benefit 50,000 retirees.

RM930 million allocated to the Youth and Sports Ministry.

- RM145 million allocated for training athletes.

- RM280m for training, SEA Games, new sports complex, etc