Tuesday, January 20, 2015

Budget Revision: Highlights

Prime Minister Datuk Seri Najib Tun Razak announced key measures to sustain development and economical growth on Tuesday.

According to him, the Government will continue to seek ways to ensure the country continues to grow as well as protecting the people's well-being.

The highlights of his announcement include: 

*  The 2015 National Service Training Programme stopped this year to save RM400mil; programme to be reviewed and enhanced.

*  Electricity tariff will not be increased this year.

*  Free visa for tourists, among them from China, in a strategy to boost the country's tourism industry.

*  Levy on foreign workers to be reviewed.

*  Priority given in project tenders to local contractors registered with the Construction Industry Development Board - Class G1 (Class F), G2 (Class E) and G3 (Class D) contractors.

*  Local contractors to be given the task of carrying out repair works on flood-hit areas.

*  Increasing the frequency and duration of mega sales nationwide.

*  Extending the period of mega sales nationwide.

*  Intensify domestic tourism promotions by offering competitive airfares.

*  Scheduled gas price hike for the industrial sector postponed.

*  Projects such as the MRT Line 2, LRT 3, Kuala Lumpur-Singapore High-Speed Rail will be continued.

Najib also said that the Government has revised the fiscal deficit forecast to 3.2% for this year from 3% projected earlier.

He said the notion that declining oil prices and a subsequent contraction in export revenue would result in a deficit current account was not true.

With the reduction in the retail price of petrol and diesel by 35 sen and 30 sen, respectively, Najib said the rakyat's gross disposal income now stands around RM7.5bil.

Najib said the current account balance is expected to remain in surplus, adding that although the ringgit has depreciated, it is expected to stabilise over time to reflect the strong economic fundamentals.

He noted that the development expenditure of RM48.5bil for this year will be maintained and spent, with operating expenditure expected to be reduced by RM5.5bil.

Najib is adjusting Budget 2015, with both proactive and pre-emptive measures, in bid to ensure sustainable development and the resilience of the economy.

His announcement at a special function, Tuesday, focuses on actions and policy interventions to handle the changing economic scenario caused by the oil price slump.

When Najib, who is also Finance Minister, tabled Budget 2015 last year with an expected expenditure of RM273.9bil against an expected revenue of RM235.2bil, oil price averaged around US$90 (RM355) per barrel.

But the price has been falling and is expected to drop to as low as US$40 (RM140) in the first six months of this year.

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