Malaysia Budget 2016: Does it matter to Malaysian motorists?

At, the proverbial question of “Is this the car for you” appears regularly in our car reviews, but in this article we ought to ask – does Budget 2016 matter to us as Malaysian motorists?

We’ll be dissecting the budget announced by our very own Malaysian Prime Minister, Datuk Seri Najib Tun Razak, on a note that particularly concerns Malaysian road users. The annual budget announcement came right after the toll rate hikes that took into effect beginning 15 October 2015. Due to the challenging economy and poor performance of the Ringgit, the 2016 Budget, according to the Prime Minister, was a difficult one to table.



1. More boost for Public Transportation


The Malaysian Government has injected a massive boost of RM40 billion for the development of the country’s roads and public transportation. That includes:

  • The approval of LRT3 extension costing RM10 billion. The LRT3 is expected to benefit 2 million people across Bandar Utama, Damansara to Johan Setia, Klang. Construction will kick-off in 2016 and will end by 2020.
  • The MRT II covering Sg Buloh, Serdang and Putrajaya will begin operations in Q2 of 2016. The RM28 billion project is expected to complete by 2022.
  • The Bus Rapid Transit (BRT) that connects KL and Klang has been given an allocation of RM1.5 billion. Also, a BRT line for Kota Kinabalu, Sabah has been planned at a cost of RM1 billion.

2.  Improvements on public roads

  • The Government will pump 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”.
  • Highways such as Damansara – Shah Alam, Sungai Besi – Ulu Klang, Pulau Indah and Central Spine Road will all be upgraded in 2016.

3. Improvements for the rural areas

  • The rural development is not forgotten, with RM1.4 billion allocated to build and upgrade rural roads of no less than 700 km across the country.
  • The roads in Federal Land Development Authority (FELDA) settlements will be boosted with an injection of RM200 million.
  • RM67 million is allocated to the MARA Bus Transport Project for operating buses in rural areas.

4.  Highways for Sabah and Sarawak

  • In Sabah,  a 706km highway from Sindumin to Tawau costing RM12.8 billion will see its construction begin in 2016.
  • Over in Sarawak, the 1,091km Pan-Borneo Highway project is expected to complete in 2021. The RM16.1 billion highway will be toll-free, unlike major highways in Peninsular Malaysia.


1. No announcement in the automotive sector


These are among the questions remained unanswered in 2016:

  • The Government’s incentive for Energy Efficient Vehicles (EEV). Under the 2014 National Automotive Policy, incentives in the form of tax breaks are given to lean burning cars that are locally assembled, but the said policy will expire come 31 December 2015. As for now, the Toyota Camry HybridMercedes-Benz S400 HybridMercedes-Benz E300 BlueTec Hybrid and several other models of course are among the few cars that are benefiting from this policy. There’s just two more months before we reach 2016, so what are the plans?
  • The controversial Approved Permits (AP). Up to now, the Government has yet to reveal its study on the abolishment of open AP for used vehicles. For many years, the Government has been looking to eliminate the Open AP, but progress has yet to be seen.

2. No concrete plans to improve public transportation service 


Much of the Government’s effort this time revolve around infrastructure developments, but there was no mention on improving its services. Federation of Malaysian Consumers Association chief executive Datuk Paul Selvaraj commented that the Government should focus on improving the current public transport, rather than the service itself.

Furthermore, Malaysiakini reports the Transport Ministry’s budget for 2016 got slashed by 14.1 percent, or RM648 million, to RM3.955 billion. The unprofitable railway routes and rural flights will be discontinued as well. Although the ministry’s operations have been impacted, surely the quality of the public transportation services is a concern in 2016.


In a nutshell, it certainly looks like a mixed budget. Malaysians benefitting from this are for those who often use public transportation services, but the announcement leaves corporate automotive players in a limbo, at least for now. There should be a separate announcement for next year’s NAP, though.

So, back to the question. Will Budget 2016 matter to the majority of Malaysian motorists? Yes, to some extent. For those living in the Klang Valley, you can expect an upgrade in terms of traffic and road conditions. This has been a long time coming (but repeated countless times before, so it’s not exactly something new), especially for those who frequent Jalan Tun Razak and Damansara.

Perhaps driving to work in the city centre could be a thing of the past, should all LRT and MRT projects proceed as planned. Whether or not they complete on time is a different story altogether.

The 1,091km Pan-Borneo Highway will supposedly be toll-free

Other areas that look bright following the announcement are Sabah and Sarawak, thanks to the proposed Pan-Borneo highway. Call it a popularity bid (because the Sarawak state elections will take place in 2016), but it’s about time our friends in East Malaysia deserve a proper highway that could boost both the economy and tourism.

However, for those looking forward not to drive to work or town hopping in East Malaysia, hold your horses just yet as the Budget will have to be approved by the Parliament. With reports suggesting that Parliament members are seeking a vote for motion of no confidence towards Najib by rejecting this proposition, there’s a slight possibility that the recently tabled budget may just be thrown out the window. However, any developments in this regard will be updated here as soon as official announcements are made, so stay tuned!



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