It is official. Malaysians have been told to brace themselves for tough times ahead. Despite previous reassurances that “we are not in a recession”, the underlying message from the RM60 billion stimulus package is that a recession might be just looming right outside our door.
Malaysia, like the rest of the world, has made changes to its own forecasts, expecting growth this year, even with the stimulus package, to be between -1% and +1%. The fall has become faster than what has been expected. If we avoid the recession this year, it will be only narrowly.
The RM60bil is to stop the slide but even with the money, many see the situation as touch and go. (source)
The launch of the mini budget yesterday seemed to hold more carrots for corporate Malaysia as opposed to the man on the street. However, there are still ways you, as an individual, can benefit from the Malaysian RM60 billion stimulus package. Read below for ways the budget might help the rakyat.
How Individuals Benefit From The Stimulus Package
- Issuance of RM5 billion savings bonds offering annual returns of 5% – With the fixed deposit rates hovering below 3%, this might provide an investment alternative for Malaysians to earn a slightly better interest rate on their money.
- Subsidies of RM674 million in prices of necessities – Hopefully with these subsidies in place, basic ingredients such as sugar, wheat and bread will not see a spike in prices.
- RM480 million to ensure toll rates do not increase – As Malaysia is a country where most of its non-jammed roads are only accessible by paying toll, this is indeed a good move although abolishment of toll would have been a better move.
- Opportunities for Post Graduate Study – RM20,000 and RM10,000 to be provided to students pursuing PhD and Master programmes locally.
- RM700 million to provide training and job placement opportunities – Local employees skills are to be enhanced with the intention of reducing dependencies on foreign labour.
- Recruitment of 63,000 Civil Staff – This will be a welcome move for those who might have been retrenched locally or abroad. Opting for a slightly lower pay with the Government will still be better than having no income source and job.
- Aid for the Poor – The poor have been given focus in this mini budget through subsidies, allocation of low-cost homes and upgrading of public infrastructure.
- RM1.95 billion for Improvement of Schools – Hopefully this sees better equipped Government schools and more conduicive learning environments for young Malaysians without the taint of politics.
- RM5,000 for cars over 10 years old – This applies only if one purchases a Proton or Perodua car.
Despite the mini budget and large amounts of money allocated to saving the economy, the budget does not seem to put much money in the pockets of the people to boost spending in the short term.
Some wishlist items many had such as tax breaks, increasing the tax-free income bracket, improving public transportation systems, flood mitigation and increasing the spending power of the people still remain as wishlist items for now.