LIVE: RM400 million National Service programme stopped as budget austerity measure

Prime Minister Datuk Seri Najib Razak delivers his speech on current developments and the nation's financial position at Putrajaya International Convention Centre in Putrajaya. – The Malaysian Insider pic by Nazir Sufari, January 20, 2015.

Prime Minister Datuk Seri Najib Razak is announcing revisions to the national Budget 2015 today, in view of falling oil prices which are now around US$50 per barrel.

Budget 2015, when tabled in October last year, had a projected expenditure of RM273.9 billion in expenditure and RM235.2 billion in revenue. It was pegged to oil prices of around US$100 per barrel.

The slide in prices, which has drastically affected the ringgit's value as Malaysia is an oil exporter, has seen calls by economists for Putrajaya to revise the budget.

Najib announced the following revisions at a special session at the Putrajaya International Convention Centre today:

10.47am: Other measures include:

* Reviewing the levy on foreign workers.

* Offering free entry visas to visitors, including those from China.

* Priority in project tenders tolocal contractors registered with the Construction Industry Development Board (CIDB).

* Local contractors to be given task of repairing to carry out work on flood-hit areas. (Contractors in the G1, G2 and G3 categories.)

* More promotion of Malaysian-made goods.

* Extending the period of Mega-sales nationwide.

* Encourage domestic tourism through competitive pricing of domestic flights.

10.39am: The revised growth figure for Malaysia's economy in 2015 is 4.5% to 5.5%. Under the original budget, it was 5% to 6%.

Among the expenditures to be cut is the National Service programme, which will save the government RM400 million.

10.26am: The revised budget aims to trim the fiscal deficit to 3.2% of GDP for 2015. We have to accept the reality that we cannot achieve the original target of 3% under the original budget, Najib said.

Without a revision, the deficit would hit 3.9%.

10.19am: When the budget was tabled last October, world economic growth was projected at 3.4%-3.9% by the International Monetary Fund. This has now been revised to 3%-3.8%.

Najib stressed that the world price of oil is not something Malaysia can control. As of yesterday, January 19, 2015, Najib said the price was US$48 per barrel.

The World Bank has said that lower oil prices can be positive for global economic growth. This will be positive for Malaysia as an oil exporter.

10.09am: Opening his speech, Najib says: "We are not in crisis, we are taking preemptive measures following the changes in external global economic landscape which are not in our control." 

MORE TO COME

- TMI