PETALING JAYA: The Federal Government more than halved its fiscal deficit as a percentage of gross domestic product (GDP) in the last seven years, said Prime Minister Datuk Seri Najib Tun Razak (pic).
He said this was in large part thanks to the introduction of the Goods and Services Tax (GST) in 2015.
As a result, the Government had successfully met its fiscal deficit target of 3.1% of GDP last year, down from 6.7% in 2009.
"Talking about GST, the reality is that prior to 2015, 41% of the national income came from oil-based revenue," said Najib when presenting the 2016 annual report of the National Transformation Programme (NTP) and Economic Transformation Programme on Tuesday night.
"Due to the global economic downturn and stark decline in crude oil prices, the Government’s revenue was also reduced. But as a result of strong and unwavering political will, and for the sake of economic stability and prosperity, the Government persisted with its stand on implementing GST," he added.
Najib said that because of this, the government was able to cushion the shortage of oil revenue by collecting RM42bil worth of GST in 2016.
The Prime Minister also took a swipe at the Opposition who he said were “fooling the people” by claiming that if they formed the government, GST would be zero-rated or abolished.
"Then let me ask them, from which source do they plan to get the RM42bil? People say talk is cheap. Everyone can say anything, and promise this and that. But if the Government was not gritty and resolute, there is no way we could have met our operating and development expenditures,” he said.
Meanwhile, Najib also pointed to subsidy rationalisation measures as the reason the Government was able to introduce direct financial aid such as the 1Malaysia People’s Aid (BR1M) for low-income groups, and the 1Malaysia Student Discount Card, among other initiatives.
"The same goes for the cost of education for our children in schools and universities, which would increase and have to be borne directly by parents. This is what would happen if the Government did not make fiscally responsible decisions. Therefore, it is obvious that the Opposition’s plan is unrealistic,” he added.