Najib unveils RM251b Budget
UPDATED
KUALA LUMPUR: Prime Minister Najib Tun Razak unveiled the Budget 2013 in the Dewan Rakyat this afternoon.
The Budget 2013 theme was “prospering the nation, enhancing the well-being of the rakyat and a promise fulfilled”.
At the onset of his more than two-hour-long speech, Najib said the budget was a manifestation of Barisan Nasional’s campaign slogan, “Janji ditepati”.
The premier announced numerous measures to stimulate the economy and other sweeteners such as tax incentives and monetary rewards aimed at securing votes.
Salient points:
- The allocation for next year’s budget is RM251.6 billion with the fiscal deficit at 4% compared with 2012′s deficit of 4.5%.
- Government will reintroduce foreign company acquisition incentives and tax incentives for local service providers.
- The government is suggesting group insurance coverage scheme for hawkers and small business holders who are registered with the Companies Commission of Malaysia. This scheme will provide maximum coverage up to RM5,000 and the government will fund it at RM16 million annually.
- Tax incentive for the Global Incentive for Trading (GIFT) programme to make Malaysia an international commodity trading hub.
- Taking into account expected revenue and expenditure, government’s deficit to decline further to 4% for 2013 from 4.5% in 2012.
- Tax incentives for private entrepreneurs in the oil and gas industry including 100% income tax waiver for 10 years, exemption of withholding tax and stamp duty.
- To support agriculture, government will provide subsidies and incentives worth RM2.4 billion for padi, padi seeds and fertiliser prices. Paddy farmers below 10 hectares will fall under the Paddy Takaful Coverage Scheme with compensation of up to RM13,000.
- RM500 million will be allocated for the River of Life project to rejuvenate the Klang River.
- RM230 million in incentives for fishermen, RM2.4 billion in subsidies and incentives for paddy sectors
- Securities Commission will provide the framework for the issuance of AgroSukuk for companies involved in agriculture. For AgroSukuk, the government has allocated a double tax deduction for a four-year period from 2012-2015.
- Halal Industry Fund will provide RM200 million to fund working capital for SMEs that produce halal products.
- The government will allocate RM600 million for crime reduction.
- Putrajaya to give RM276 million to beef up the Malaysian Anti-Corruption Agency (MACC).
- RM350 million Tekun loans for entrepreneurs (including RM50 million for the Indian community).
- RM38.7 billion allocated for education. Additional RM500 million for training of teachers in core subjects English, Bahasa Malaysia, Science and Maths.
- RM1 billion for primary schools (RM100 million for Tamil and Chinese schools).
- PERMATA to get RM20.5 million under PM’s Department.
- RM1.2 billion allocation for pre-school development.
- The government will form the “Graduate Employability Task Force” to assist unemployed graduates.
- Tun Razak Exchange expected to attract 250 international financial services companies and offer 40,000 job opportunities.
- RM50 million for poor Indian students to undergo technical training.
- RM200 milion for Socso in oder for its 1.4 million contributors aged 40-55 to undergo free medical screening in government hospitals.
- For retired civil servants who served a minimum of 25 years, minimum pension raised from RM720 to RM820.
- Retired army personnel who served a minimum of 21 years to receive RM1,000 one-off payment.
- RM1 billion fund to be set up to help Bumiputera SMEs to increase their equity share in the economy.
- Legal aid centre to get RM20 million.
- Annual increase of 150 officers for MACC annually until the 5,000 target is met.
- RM20 million for 1Malaysia Clinics, to build an additional 17 more clinics with facilities to check cholesterol and glucose levels. Another RM100 million for maintenance work on current clinics.
- Another round of cash handouts of RM250 under BRIM 2.0 for household incomes less than RM3,000. It will also be extended to single individuals aged 21 and above earning less than RM2,000. The total cost will be RM3 billion.
- Subsidy for sugar will be reduced by 20 sen effective tomorrow.
- The government will allocate RM440 million to the Skills Development Fund Corporation (PTPK) to provide loans for trainees to undergo skills training.
- To further boost the production and utilisation of green technology-based products, the fund for GTFS will be increased by RM2 billion and the application period extended for another three years ending Dec 31, 2015.
RM20 million for 1Malaysia Clinics, to build an additional 17 more clinics with facilities to check cholesterol and glucose levels. Another RM100 million for maintenance work on current clinics.
- Another round of cash handouts of RM250 under BRIM 2.0 for household incomes less than RM3,000. It will also be extended to single individuals aged 21 and above earning less than RM2,000. The total cost will be RM3 billion.
- Subsidy for sugar will be reduced by 20 sen effective tomorrow.
- RM1.9 billion to build 123,000 affordable housing units in strategic locations, to be implemented by PR1MA, SPNB, National Housing Department. PR1MA will spend RM500 million to build 80,000 houses nationwide priced between RM100,000 and RM400,000.
- To enable more Malaysians own their first residential property, My First Home Scheme, which was launched under the previous budget, will be improved by increasing the income limit for individual loans from RM3,000 to RM5,000 per month or joint loans of husband and wife of up to RM10,000 per month. In addition, the requirement for a savings record equivalent to three months instalment and minimum employment of six months will be abolished.
- RM1.9 billion to build 123,000 affordable housing units in strategic locations, to be implemented by PR1MA, SPNB, National Housing Department. PR1MA will spend RM500 million to build 80,000 houses nationwide priced between RM100,000 and RM400,000.
- The government proposes the real property gains tax (RPGT) from the disposal of properties made within a period not exceeding two years from the date of purchase will be taxed at the rate of between 15% and 10% of disposal of property within a period of two to five years. For property disposed after five years from the date of acquisition, RPGT is not applicable. In addition, gains from the disposal of one residential property once in a lifetime and disposal of properties based on love and affection between husband and wife, parents and children, grandparents and grandchildren are exempted from RPGT.
- The government will allocate RM386 million to ensure the prices of essential goods in Sabah and Sarawak as well as in Labuan are sold at lower prices through the opening of 57 KR1M; and to bear the cost of delivering products from Peninsular Malaysia to Sabah, Sarawak and Labuan including the interior areas. For example, in Ba’kalalan, Sarawak, the price of a 14 per kg cooking gas cylinder is sold at RM70. With the price uniformity programme, the cooking gas can be purchased at only RM26.60 per cylinder.
- In addition, to reduce the burden of the rakyat who commute daily by ferry from Labuan to Sabah and Sarawak, the government will provide a 50% discount on ferry charges to all passengers. Furthermore, 50% discounts will also be provided on ferry charges for commercial vehicles that transport basic essential goods and construction materials to Labuan.
- The government will continue the 1Malaysia Book Voucher programme for all students in institutions of higher learning (IPT) and at pre-university level. The value of the voucher will be increased from RM200 to RM250. The measure will involve an allocation of RM325 million and benefit 1.3 million students nationwide.
- The government proposes that individual income tax rate be reduced by 1 percentage point for each grouped annual income tax exceeding RM2,500 to RM50,000. The measure will remove 170,000 taxpayers from paying tax as well as provide savings on their tax payment. As an example, an unmarried young professional with a monthly income of RM5,000 will enjoy income tax savings up to RM425 per person.
- The government proposes school bus operators to be given, firstly, assistance of RM10,000 cash rebate and a 2% interest rate subsidy on full loans for the purchase of new buses to replace buses that have exceeded 25 years with new 12- to 18-seater buses. This loan scheme, managed by BSN, will be offered for a period of two years commencing Jan 1, 2013.
- The government will once again provide the Schooling Assistance of RM100 to all primary and secondary students. This assistance is expected to benefit 5.4 million students involving an allocation of RM540 million and will commence in January 2013.
- The government will establish 100 1Malaysia Internet Centres from 2013 to 2015 in suitable areas in the city such as PPR locations. The centres will be equipped with computer facilities and broadband services for daily usage and will enhance the socio-economic activities. For this, SKMM will provide an allocation of RM150 million.
- Repayment of PTPTN full loan within a year upon this announcement effective from Oct 1, 2012 until Sept 30, 2013, a discount of 20% will be given on their loans. Meanwhile, for those with consistent repayment of PTPTN loan in accordance with their repayment schedule, a 10% discount per annum on their repayment will be given effective from Oct 1, 2012.
- Government announces a bonus of one and a half months for civil servants.
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