I think that is their fall back. If finances deteriorate in the future, then they always have this ace in their cards. 6% is still relatively low compare to some countries which mostly in the 10+%. Some as high as 20+%.

Raising the GST 3 times to 18% will practically solve all financing problem (instead of reducing spending)

Full year is estimated to be RM39b as reported. So every +1% would be additional RM6.5b. Just +5% GST, the government will get another Petronas giving them >RM30b. +10% will give them 2 Petronas ! Even Petronas is bankrupt, so what !

That's why he said Malaysia is never a failed state. Like unker said, don't worry, be happy !

so basically GST money is "helping" the country now instead of oil money

There is no free lunch,... something must give way. If the GST is raised too high without proper monetary and fiscal monitoring, then economic activities will slow down, and with less activities, there will be less GST collected. Less GST collected means higher deficit again.

Statistics : 6% GST introduced in 2015. GDP growth was affected only <1%, and that was due to China slowdown and low oil price, not GST

Of course there will not be suicidal 1 time 10% increase. They are stupid, but not that stupid. It will be increase 1-2% bit by bit each time depending on situation.

gst will surely naik at the earliest convenience.

more so now incr br1m and some additional food/medicines zero gst announced.

rural vote bank secured; urban-suburban inflation will definitely rise fast.



rm... baed on last few hrs, it looks like it will be 4.24-4.25 on monday.

Okay,... but even if bit by bit, still there will be increase, and if the purchasing power parity does not increase in tandem with GST increase, GDP growth will definitely be affected too. THe problem here lies in the income level of the people.

http://www.malaysiakini.com/news/316913

<< The Finance Ministry, in its 2015/2016 Economic Report released today, said as at end-June 2015, the Federal Government debt, comprising the cumulative total of all Federal government borrowings, stood at RM627.5 billion (54 percent of GDP).

The report is issued in conjunction with the tabling of the 2016 Budget today by Prime Minister Najib Abdul Razak, who is also Finance Minister.

"The debt has increased (2014: RM582.8 billion) mainly due to higher domestic debt issuance to meet deficit financing requirements," it said.>>

http://www.malaysiakini.com/news/277234

<< Contingent liability goes up

As of June 2014, the federal government debt has increased to RM568.9 billion from RM539.9 billion at the end of December 2013. >>

12/2013 539.9 billions
06/2014 568.9 billions increase of 29 billions
12/2014 582.8 billions increase of 13.9 billions
06/2015 627.5 billions increase of 44.7 billions

Folks,

Federal Government's debt had increased from 582.8 billions to 627.5 billions as of end-June 2015. An increase of 44.7 billions.

In summary, for first 6 months of 2015, THE GOVERNMENT's debt had increased as much as the whole year of 2014.

"Don't worry, be happy!!!"
"Not too bad!!"

Or,

Enjoy the show!!

Dreamer

Hansel,

http://www.malaysiakini.com/news/316887

<< Budget allocations:

- 2016 Budget allocates a total of RM267.2 billion, an increase from a revised allocation of RM260.7 billion for 2015. The initial allocation for 2015 was RM273.9 billion.

- For 2016, federal government revenue collection is projected at RM225.7 billion, up RM3.2 billion from 2015. >>

Folks,

So, officially, before the usual 2 additional supplementary budgets for 2015, the budget deficit is

2015 Expense 260.7
2015 Revenue 222.5 (225.7 - 3.2)

2015 Deficit = 38.2 billions

So, with 6% of GST, the budget deficit will be at least 38 billions.

Dreamer

Another thing is it's easy to plan...

Are they spending according to plan?

chengcheng,

THE GOVERNMENT consistently overspend. Hence, there are always 2 additional supplementary budgets per year. So, the actual budget deficit is always higher than the budget for the last few years.

http://www.malaysiakini.com/news/292879

<< The federal government has tabled a supplementary bill seeking a RM 2.2 billion addition to the 2014 federal budget, their second supplementary bill for this budget.

The amount requested is in addition to a RM4.1 billion additional budget the government had sought through a first supplementary bill for the 2014 budget in June last year. >>

Dreamer

This post has been edited by dreamer101: Oct 24 2015, 09:52 AM

bloomberg says it better.



This post has been edited by AVFAN: Oct 24 2015, 11:20 AM

Am I the only one here think, GST should not have exemption list, but to have a lower % GST?

It is easier this way than trying to figure out which one is GST which one is not.

the political needs do not permit that.

exemptions are meant to discriminate - some pay more, some pay nothing - by design.

honestly.... such system is actually flawed.

The items that are in the GST exemption is already "GST included". So it is no different now.

Exemption are there to make to confuse people or to make "poor people" happy to buy votes?

1. Both WTI Crude n Brent Crude close @ 44.60 n 47.99
2. China cut rates n reserves
USD/MYR shld b heading to 4.30 next week?

after reading a few more int'l reports, i am inclined to think rm will go >4.30 by end of next week.

whether 4.30 or 4.40, i will not short usd now.

Budget 2016 neutral on ringgit, says StanChart Research
http://www.theedgemarkets.com/my/article/b...nchart-research

USD has been on a major rally againts many currencies the past two days. Big jump 94 to 97 on the USD index. Probably MYR will follow suit with the trend shortly.

there are too many factors affecting USS/MYR, so it is hard to tell.

but if u see how crazy RM bounce from 4.4 to 4.1 weeks ago just for a very small "good news", there is a good chance that RM priced-in as well as in oversold territory.

It is going to takes a whole lot of bad news so bad enough to move RM below current levels.