5 Things You Should Know Now about Budget 2016

In anticipation for Budget 2016 which will be tabled by Prime Minister, Datuk Seri Najib Tun Razak on October 23^rd, the second Finance Minister, Datuk Seri Ahmad Husni Hanadzlah has mentioned some key points that the government will be unveiling.

Below are 5 things you should know now about Budget 2016.

An increase for a boost

The government will unveil a larger allocation for Budget 2016 as compared to last year’s budget. However when asked about the ratio of increase, Ahmad Husni did not divulge details. The slight increase is said to boost the domestic economy and emphasis will also be given to alleviate difficulties of Malaysian household with incomes of below RM2, 500. Looking back, 2015 saw a budget of RM273.9bil while 2014’s budget was RM264.1bil.

First budget under 11^th Malaysia Plan (11MP)
Budget 2016 is crucial as it is the first budget under the 11^TH Malaysia Plan and the plan is working towards Malaysia becoming a high-income nation by 2020. Under the 11^th MP, the federal government revenue is said to increase to RM1.408 trillion in 11MP from RM1.050 trillion in the previous 10MP.

Reduce Operational Expenditure
The 2016 budget would see a reduction in operating expenditure and instead see a larger allocation for development expenditure. Ahmad Husni said that the reduction would not be major, however it would lean more towards maximising efficiency through a more prudent management.

Reduce fiscal deficit
The government plans to reduce its fiscal deficit from 3.2% to 3% in 2016. 2014 saw the fiscal deficit at 4.5%.

The revenue to fund budget
The revenue for 2016 budget will be based on the current oil prices globally. However, Ahmad Husni said that it is still flexible and allows for a review.

Additionally, Ahmad Husni said his ministry has already drafted the people-centric themed budget and that the Prime Minister will chair a meeting on Oct 7 to look at issues that has been highlighted by the ministries.