Malaysia Budget 2016: Will it affect the Malaysian Auto Enthusiasts?

'The latest buzz around the country among the auto enthusiasts is “Budget 2016”. Every Malaysian motorist is wondering, How does it matter to them? The corporate automotive sector is looking forward to their deals of profit. Besides that, there are common road users with high hopes for better transportation and enhanced road connectivity. Thus, it is our task to dissect the Budget 2016 and separate out the pie of interest among each section of Malaysian audience.'

Kuala Lumpur: The Budget 2016 was announced by our very own Malaysian Prime Minister, Datuk Seri Najib Tun Razak, that particularly concerns the road users this year. As expected, it was an arduous task to bring this year's budget on the table concerning the challenging economy and poor performance of the Ringgit in this quarter.

Known facts of the Budget 2016:

1. Public Transportation improved

The Budget 2016 proved to be a boon for the public transport, the Malaysian government has allocated a huge sum of RM40 billion to boost the development of the country’s roads and public transportation. This amount will be distributed among the following:

• RM10 billion for the approval of LRT3 extension. The LRT3 is expected to benefit 2 million people across Bandar Utama, Damansara to Johan Setia, Klang. The extension procedures will start in 2016 and will end by 2020.
• RM28 billion will be allocated to the MRT II project which will be covering Sg Buloh, Serdang and Putrajaya provinces. The operations are anticipated to begin in Q2 of 2016 and will be complete by the year 2022.
• RM1.5 billion will be given to escalate the Bus Rapid Transit (BRT) that connects KL and Klang. Apart from it the government has also allocated RM 1 Billion to extend BRT line for Kota Kinabalu and Sabah.

2. Beautification of the Public roads

• Malaysian Government is planning to inject RM900 million for 2016 to resolve traffic issues on Jalan Tun Razak. Najib said the Traffic Dispersal Project will involve a “strategic public-private collaboration”.
• The expenditures will include the upgradation of highways such as Damansara – Shah Alam, Sungai Besi – Ulu Klang, Pulau Indah and Central Spine Road.

3. Development in the Rural areas

• The government has kept the rural development in concern while planning the Budget. RM1.4 billion will be allocated to build and upgrade rural roads of no less than 700 km across the country.
• RM200 million will allocate to the Federal Land Development Authority (FELDA) for roads settlements.
• MARA Bus Transport Project will also receive RM67 million for operating buses in rural areas.

4. Sabah and Sarawak will also get highways

• A 706km highway is planned in Sabah. The highway is planned from Sindumin to Tawau costing RM12.8 billion will see its construction begin in 2016.

• In Sarawak, the 1,091km Pan-Borneo Highway project is planned. The project will be complete by 2021. The highway will be toll-free, unlike major highways in Peninsular Malaysia.

Unknown facts of the Budget 2016:

1. Automotive sector is kept in drought

The following questions remained unanswered in this Budget 2016: Incentives for Energy Efficient Vehicles (EEV). According to the 2014 National Automotive Policy, the major automotive company's were granted incentives by the government in the form of tax breaks, however, the policy will expire by 31 December 2015. At present Mercedes-Benz S400, Toyota Camry Hybrid and Mercedes-Benz E300 BlueTec Hybrid are being benefited by the policy, but no plans were introduced for the next year, which is still a mystery for the automotive industry.

Approved Permits (AP) are still ambiguous. The government has not yet revealed its schemes over the abolishment of open AP for used vehicles. Malaysian Government is trying for a long time to eliminate Open AP, but we cannot see any progress in the recent Budget plan.

2. MAI is in favour of the Budget 2016

Contrary to the above mentioned facts, The Malaysian Automotive Institute (MAI) has welecomed the Budget 2016 with open arms. MAI said that the announcement of Budget 2016 will improve the automotive sector on both a domestic and global level. According to MAI CEO, Mohamad Madani Sahari the Budget 2016 will bring around more job opportunities, as well as more training and measures related to improve the sector.

MAI also said, the Budget 2016 is according to the National Automotive Policy’s (NAP) aspirations, which aims to generate an additional 150,000 jobs by 2020.

Conclusion:

The Budget 2016 is a mixture of various joys and sorrows to come in near future. The experts are claiming to be a biased budget by the government in which unnecessary expenditures are included while the essentials are being cut. The major section of society, that will benefit from the Budget 2016 will be those who often use public transportation services, however, the automotive giants are kept in ambiguity as no schemes of their interest were announced.

But still the major question remains the same, Will it affect the Malaysian motorists. Well, it looks like that those who live in Klang Valley will be benefected by the upgradation of traffic and road conditions, so they can surely cruise their high-speed German cars on those roads. Apart from it travelling to work in a Public transport will surely see a new rising because the Government has many plans to extend the LRT and MRT projects.

Sabah and Sarawak will see a lot of development coming their way, the Government has proposed the Pan-Borneo highway. This will surely boost the tourism and economy with commuters reaching the East Malaysia.

However, there is still a ray of hope of the Automotive players as reports suggest that Parliament members are seeking a vote for the motion of no confidence towards Najib by rejecting this proposition. So, there might be an actual possibility that this budget will be banished.

Stay tuned for regular updates over the budget!

Also, check out the recent happenings in the auto industry and latest car launches on our portal.

Budget Speech 2016

Ucapan Bajet 2016