Malaysia's Budget 2015: Key measures announced by PM Najib to sustain growth

PETALING JAYA (THE STAR/ASIA NEWS NETWORK) - Malaysian Prime Minister Najib Razak announced key measures to sustain development and economic 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 RM400 million (S$150 million); programme to be reviewed and enhanced

* Free visas for tourists, including those 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

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

* More promotion of Malaysian-made goods

* Extending the period of mega sales nationwide

* Encouraging domestic tourism via competitive pricing of domestic flights

Mr Najib also said that the Government has revised the fiscal deficit forecast to 3.2 per cent for this year, from 3 per cent 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, Mr Najib said the people's gross disposal income now stands around RM7.5 billion.

Mr 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 on Tuesday focuses on actions and policy interventions to handle the changing economic scenario caused by the oil price slump.

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

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