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Najib’s ‘mother of all budgets’ doesn’t disappoint

Najib isn’t known as an impressive public speaker – competent, yes, but not inspiring or captivating. However, on Friday, as he presented the last budget before the general election, we saw a remarkably different man. Shedding his image as a cautious technocrat, he was fluid and confident – cracking jokes, teasing the opposition, and delivering bland figures with satisfied grin on his face.


He knew this budget would hit home. And he was probably aware of the scathing reviews that Pakatan’s alternative budget (released on Wednesday) received – promises too much and explains too little. In contrast, he was going to prove that it’s fully possible to do popular things without breaking the bank. And boy, did he deliver, seizing the wind out of Pakatan’s sails.


The opposition has made much hay over the GST. So, Najib announced a major tax cut for the middle-class, cutting the rate by two percent for those whose taxable income is between RM20,000 to RM70,000 per annum. Over 261,000 people would no longer be required to pay income tax.


All in all, the government will be returning RM1.5 billion into the pockets of the people. He also assured the nation that BR1M would continue for its 7 million recipients, eligible to receive up to RM1,200 from the government. Of course, he took the golden opportunity to needle the opposition over their very conspicuous U-turn over BR1M – back then, they called it ‘bribery’ and ‘dedak’; now they support retaining it.


It was a well-deserved shot. And from all howling you could hear from the other side of the hall, you knew they couldn’t come up with a coherent response. He was effectively exposing their hypocrisy while eating into their ‘rising cost of living’ agenda at the same time.


But the best was yet to come. Pakatan MPs were caught off-guard when Najib unexpectedly announced the abolishment of four tolls on some of the most popular highways: Batu Tiga in Shah Alam, and Sungai Rasau in Klang (Selangor); Bukit Kayu Hitam (Kedah); and Eastern Dispersal Link (Johor). Abolishing tolls is a key Pakatan platform and again, he was stealing their thunder. He masterfully outdid them in their own game of populism, but with one extremely important caveat.


He accomplished all this without surrendering fiscal responsibility. He didn’t engage in Pakatan-style numerical gymnastics, magical accounting, and wishful thinking. He didn’t have to abolish the GST, which, as I’ve written previously, is supported by the overwhelming majority of economists. Most impressively, his budget sees the deficit drop further to 2.8 percent in 2018 from 3.0 percent this year. See? It’s possible to govern without pandering shamelessly into bankruptcy.


I hope we see more of this Najib. It’s a shame that he doesn’t give more speeches or interviews because he clearly has the goods. After days of watching Pakatan pitch their economically illiterate proposals, it’s a relief to watch an adult to present his case in Parliament. If Pakatan ever wants to be taken seriously, they should be taking notes. I don’t know if this is the “mother of all budgets”, as Najib described it, but it’s a certainly a strong contender for the mother of all performances.



Prime Minister Datuk Seri Najib Razak has tabled the 2018 Budget with a proposed allocation of RM280.25bil.

Of this, RM46.5 billion is for development while RM234.25 is for operational expenditure.

The Operating expenditure is up 9 % while the development expenditure is the same as last year.

Revenue collection is also expected to go up 9.2% to RM239.86 billion.

The Budget 2018 theme is Prosper with Inclusive Economy, Balancing duniawi  and ukhrawi excellence for the betterment of the rakyat along with #TN50 aspirations.

The Budget 2018 has 8 core thrusts.

  • RM1bil added to the size of the financing scheme fund for syariah-compliant SMEs, making it RM2.5bil, given a subsidy of 2% based on profit rate.
  • RM200 million for training programmes, grants and easy loansa for small and medium enterprises under the SME Corp and almost RM82 million for development of industries and halal products under various agencies.
  • Micro entrepreneurs are not forgotten and the Gov is allocating the highest ever budget for TEKUN, RM500 million.
  • Funds for Amanah Ikhtiar Malaysia increased by RM200 million with overall funding reaching RM2.7b and benefiting 400,000 creditors.
  • Under the Rural Economic Funding Scheme, RM80 million is allocated under Bank Rakyat and SME Bank, with payment schemes for rural Bumiputera entrepreneurs.
  • RM150 million is allocated to MATRADE, MIDA & SME Corp for promotion and expansion of export markets including Market Development Grant.
  • RM1 billion provided by EXIM Bank for insurance protection credit and RM200 million for credit payment facilities for SME exporters.
  • RM100 million is provided for loans with 70% government guarantee to automate the production of local furniture for export.


  • Year 2020 declared as Visit Malaysia Year and Malaysia will host APEC, WCIT dan CHOGM. RM2b allocated to SME Tourism Fund as loans to tourism businesses with a 2% interest rate subsidy incentive.
  • To expand the regional e-Visa hub and facilitate applications worldwide especially for expatriates, foreign students and Malaysia MySecond Home programme.
  • Medical tourism industry will be boosted to be a source of income. RM30 mil is allocated to Msian Healthcare Travel Council.
  • To promote Msia as “Fertility Treatment including IVF and Cardiology” Hub with e-Visa and high value medical services.
  • To introduce Flagship Medical Tourism Hospital programme that offers specific incentives to private hospitals to attract medical tourists.


  • MRT 3 project or Circle line will be speeded up, with expected completion in 2025, earlier than the projected 2027.
  • Under the Central Spine Road project, RM230 mil to continue the construction of the Raub-Bentong alignment and Gua Musang-Kg Relong alignment packages.
  • Pulau Pangkor also declared as duty-free island excluding liquor, cigarettes and vehicles.
  • RM1b allocated to Public Transport Academy as working capital and purchase of assets such as buses and taxis.
  • RM95 mil for the repair and construction of jetties and dredging of river mouths.
  • RM45 mil to create a biometric control system to monitor the driving of express buses.
  • RM55 mil subsidy for Tumpat-Gua Musang train services.
  • The Penang International Airport and Langkawi International Airport will be upgraded. A new airport will be built in Mukah while the Kota Bharu and Sandakan airports will be expanded.


  • The Gov will extend the discount period for loan settlement until Dec 31,2018.
  • An increase of RM200 mil to raise the maximum PTPTN loan amounts for students from B40 families taking up highly marketable courses.
  • The grace period for repayment has been extended to 12 months after completion of studies compared to 6 months previously. Those intending to further their studies, can combine their loans and repay after completion.
  • To encourage students who have completed technical and vocational education and training (TVET) to continue studies, Gov will provide 100 TVET Excellent Student Scholarships with an allocation of RM4.5 mil.
  • National Rail Centre of Excellence will be set up to support the development of skilled workers in the rail sector.

Defence and Police

  • RM14 bil allocated to the Malaysia Armed Forces (ATM), almost RM9 billion to PDRM and RM900 million to the Malaysian Maritime Enforcement Agency (MMEA).
  • The allocation for the ATM is a drop from the 2017 budget, which was RM15.1 billion.
  • RM3 billion will be used for the purchase and maintenance of defence assets.
  • RM720 million will be used to build 11 police headquarters and six police stations as well as to purchase firearms and vehicles.
  • Aims to restrain the extremist ideology of the IS.
  • RM170 mil allocated to upgrade the ICT infrastructure including the 1PDRMnet system and an additional RM100 million to upgrade the communications systems.
  • 10,000 units of housing for the PDRM under the PPA1M-PDRM and will be sold according to the salaries of the policemen.
  • MMEA allocated RM490 million for the maintenance and upkeep of vessels, upgrade its jetty’s and to purchase 3 patrol boats.
  • RM250 mil allocated to increase ESSCOM security zone in Sabah and Sarawak including RM50 mil for a coastal surveillance radar.
  • RM50 million to increase asset capabilities of troops and special forces to handle anti-terrorism.
  • RM250 million for RELA.
  • 40,000 housing units will be built in phases by 2030 for families of the armed forces. In 2018, 6,000 units will be built.
  • RM40 mil to upgrade 5 hospitals, build 4 polyclinics and a hospital specially for armed forces veterans.

Goodies for Chinese and Indians

  • RM50 mil in SME loans through Koperasi Jayadiri Malaysia Bhd (KOJADI)
  • RM30 mil for the Chinese community through 1Malaysia Small Traders and Traders Foundation.
  • RM75 mil for the development of Chinese New Villages and house repairs.
  • RM50 million for the Indian Community Entrepreneurs Development Scheme through Tekun.
  • A RM1.5 bil special unit allocation for the Indian community in Amanah Saham 1Malaysia
  • To increase the intake of Indians into public institutes of higher education and also civil servants by 7%.

Prioritising well-being of rakyat and income-making opportunities


  • RM100 million for digital entrepreneur programmes e-Rezeki, e-Usahawan, e-Ladang under MDEC
  • RM120 million for Food Truck 1Malaysia (FT1M) via Bank Rakyat loans
  • RM60 million for 1AZAM
  • RM25 million for mobilepreneurs
  • RM5,000 grant for registered taxi drivers for purchase of new vehicles
  • RM6.86 billion for BR1M programmes
  • RM3.9 billion in subsidies for household items, transport, electricity and toll.
  • Kedai Rakyat 1 Malaysia selling essential items like cooking oil, rice and flour
  • RM80 million to streamline price of goods for Sabah & Sarawak
  • FAMA and LKIM programmes RM50 million


  • Government to boost house ownership with an allocation of RM2.2 bil.
  • 210,000 units PR1MA houses
  • 17,300 units PPR houses
  • 3,000 units Mesra Rakyat houses
  • 25,000 units PP1AM houses


  • RM4.1 bil for medical supplies, consumable goods and medical aids.
  • RM1.4 bil to upgrade and maintain facilities, medical equipment, ambulances and operation theaters at Muar, Banting and Balik Pulau hospitals.
  • Cardiology and cardiothoracic services at Alor Setar and Kuala Terengganu hospitals.
  • RM100 mil to upgrade hospitals and clinics, including wiring.
  • RM90 mil for hemodialysis and Medical Aid Fund.
  • RM40 mil for rare diseases treatment cost and Komuniti Sihat Pembina Negara programme.
  • RM1 bil to build a women and children wards at Tengku Ampuan Afzan and Putrajaya hospitals.
  • RM500 mil to build a cancer center in Sg Petani with a 200 bed capacity.
  • RM500 mil to build specialists clinics and new wards at Penang Hospital.
  • RM380 mil to build a forensic medical center at Kuala Lumpur Hospital.
  • RM50 mil for Voluntary Health Insurance Schemea



  • No GST for Local government services
  • Magazines, journals, comics and periodicals will not be subjected to GST.
  • GST exemptions to tourist boat operators from 2018 to 2020
  • NO GST for the construction of schools and places worship, signed after April 1, 2017.
  • GST exemption on the import of equipment related to the oil and gas industry, under a leasing agreement and supplied by companies located at designated locations (Labuan, Langkawi and Tioman).
  • GST exemption for imports of big ticket items like Malaysian-registered aircraft and ships as well as oil and gas companies that import oil rigs or floating structures.

Civil service

  • Special payment of RM1,500.
  • Government pensioners will also receive a special payment of RM750 ringgit
  • Government servants who are forced to retire early due to health reasons will receive the same retirement benefits of the full service period.
  • Second-time promotion for civil servants who are still serving exceeding a 13-year period since the last promotion.
  • 7 days unrecorded leave days to perform umrah
  • Special annual leave days for Education Services Officer increased to 10 days from 7 days.
  • Lowest pension rate increased to RM1,000 a month, benefitting more than 50,000 pensioners.



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