Details Of Malaysias 2009 Mini Budget
The much awaited Malaysian 2009 Mini Budget is finally out! What does it hold in store for Malaysians? Read here for details of the Budget speech.
Excerpts Of Malaysia 2009 Mini Budget
I am pleased to announce that the Government will implement a Stimulus Package totalling RM60 billion. The package will be implemented over two years, 2009 and 2010. Of this amount, RM15 billion is fiscal injection, RM25 billion Guarantee Funds, RM10 billion equity investments, RM7 billion private finance initiative (PFI) and off-budget projects, as well as RM3 billion in tax incentives. This RM60 billion accounts for almost 9% of the GDP. The implementation of such a large stimulus package is unprecedented in the nation’s economic history.
The RM60 billion is allocated to the four Thrusts, as follows: RM2 billion for Thrust One; RM10 billion for Thrust Two; RM29 billion for Thrust Three; and RM19 billion for Thrust Four.
Details of Malaysia 2009 Second Stimulus Package
First Thrust: Reducing unemployment and increasing employment opportunities.
The Government will create a total of 163,000 training and job placement opportunities in the public and private sectors.
The Government will implement job placements and provide incentives to employers to recruit and train local workers to reduce dependence on foreign labour.
The Government will also establish 22 JobsMalaysia Centres and upgrade 109 existing centres
The Government proposes that employers who employ workers retrenched from 1 July 2008 be given double tax deduction on the amount of remuneration paid. The amount of remuneration eligible for this deduction shall not exceed RM10,000 per month and is limited 9 up to 12 months remuneration per employee. This incentive is applicable to workers employed from 10 March 2009 to 31 December 2010.
The Government will recruit 63,000 staff to fill vacancies and serve as contract officers in various Government agencies.
The Government will undertake to finance tuition fees and research grants up to RM20,000 for every student pursuing PhDs locally. For students in the Masters programme, the Government will provide up to RM10,000 per student.
The Government will continue to take steps to reduce the dependence on foreign workers and give priority to hiring local workers. through doubling of levies to be paid by employers (except construction, plantation and for domestic maids).
More details on the other thrusts below.
Second Thrust: Reducing Burden of Rakyat
- The Government will continue to assist oil palm and rubber smallholders whose incomes have been affected due to declining commodity prices through schemes such as re-planting, integrated farming and livestock breeding schemes by related agencies.
- The Government provides various subsidies, incentives and assistance for fuel consumption, food security, scholarships and educational assistance as well as social welfare programmes.
- An additional RM200 million to be allocated to build rumah mesra rakyat by Syarikat Perumahan Negara Berhad.
- The Government proposes that house buyers be given tax relief on interest paid on housing loans up to RM10,000 a year for 3 years.
- The Government will enhance public infrastructure for the benefit and welfare of the rakyat through accelerating Ninth Malaysian Plan projects and providing RM200 million to repair roads and drains.
- The Government will issue syariah-compliant Savings Bonds amounting to RM5 billion this year (Maturity of three years, with an annual return of 5% and will be paid quarterly to bond holders).
- An allocation of RM1.95 billion to build and improve facilities in 752 schools, particularly in rural areas as well as Sabah and Sarawak
- An allocation of RM230 million to increase the coverage of electricity and water supply in rural areas, particularly in Sabah and Sarawak. An additional allocation of RM350 million for the construction of rural roads.
- A sum of RM1.2 billion to focus on providing infrastructure and increasing economic activities in Sabah and Sarawak.
- the Government will establish a Fishermen’s Welfare Fund with an initial allocation of RM2 million, which will be managed by Lembaga Kemajuan Ikan Malaysia.
- Additional allocation of RM20 million will be provided to improve the facilities of day care centres for the elderly, strengthen the management of women shelter homes and increase facilities for childcare centres.
- The Government proposes that the existing tax exemption of RM6,000 given on retrenchment benefits be increased to RM10,000 for each completed year of service.
- Banking institutions have agreed these retrenched workers defer the repayment of their housing loans for one year. The Government agrees that the interest income related to the deferment of housing loan repayments be taxed only when such interest is received.
Look out for more details on the third and fourth trusts coming up!
Third Thrust: Assisting Private Sector In Facing The Crisis
- The Government will implement measures to enhance foreign and domestic investor confidence in the Malaysian economy.
- The Government will establish a Working Capital Guarantee Scheme totalling RM5 billion to provide working capital to companies with shareholder equity below RM20 million.
- The Government will set up an Industry Restructuring Guarantee Fund Scheme totalling RM5 billion for loans to increase productivity and value-added activities, as well as the application of green technology.
- The Government will establish a Financial Guarantee Institution to provide credit enhancement to companies that intend to raise funds from the bond market.
- The Securities Commission will implement additional measures to reduce time-to-market to enable companies to raise funds in the capital market in a more efficient and cost-effective manner.
- The Government will introduce a new programme where permanent resident status would be considered for high-net-worth individuals bringing more than USD2 million for investments or savings in Malaysia. Highly skilled foreign professionals may also be considered for permanent resident status.
- The Government will exempt levy payments to the Human Resource Development Fund for a period of 6 months for employers in the textile as well as electrical and electronics industries with effect from 1 February 2009. Additionally, the Government will reduce the levy payment rate from 1% to 0.5% for all employers for a period of 2 years effective 1 April 2009.
- The Government will provide an additional allocation of RM200 million to the Automotive Development Fund to continue supporting the development of the automotive industry and vendors as well as establish the Automotive Institute of Malaysia.
- The Government will assist in the auto-scrapping scheme (RM5,000 discount for cars at least 10 years old) for PROTON and PERODUA.
- Malaysia Airports Holdings Berhad will build and operate a new LCCT at Kuala Lumpur International Airport (KLIA) at an estimated cost of RM2 billion, which is expected to be ready in 2011.
- To attract more tourists, particularly from abroad, a rebate of 50% on landing charges will be given for a period of 2 years effective 1 April 2009 to all airlines that operate from Malaysia.
- The Government proposes that expenses incurred on plant and machinery be given Accelerated Capital Allowance, which can be claimed within 2 years. This treatment is applicable to investments incurred between 10 March 2009 and 31 December 2010.
- The Government proposes that expenditure incurred on renovation and refurbishment between 10 March 2009 and 31 December 2010 be given Accelerated Capital Allowance, which can be claimed within 2 years. The Allowance is capped at RM100,000.
- The Government proposes that the company’s current year losses be allowed to be carried back to the immediate preceding year. Total losses to be carried back is up to RM100,000 per year.
- The threshold for windfall profit levy will be increased to RM2,500 per tonne for Peninsular Malaysia and to RM3,000 per tonne for Sabah and Sarawak (from RM2,000 per tonne).
- The Government will allocate RM200 million to upgrade infrastructure in tourist spots, diversify tourism products, organise more international conferences and exhibitions in Malaysia as well as improve the homestay programme.
- The Government will strengthen the Malaysia My Second Home Programme and consider issuing work permits to skilled spouses 22 of the programme participants.
Fourth Thrust: Building Capacity For The Future
As part of Government’s efforts to promote domestic private investments, the investment funds of Khazanah Nasional Berhad will be increased by RM10 billion (in telecommunications, Iskandar Malaysia and agricultural projects).
- The Government will implement off-budget projects of RM5 billion – LCCT at KLIA and the expansion of Pulau Pinang Airport, Projects to improve telecommunication infrastructure, including broadband libraries, Broadband Community Centres and Construction of sky bridges and covered walkways between buildings, especially in the Golden Triangle, Kuala Lumpur.
- The Government will assist the implementation of projects through PFI (Private Finance Initiatives) and public-private partnerships by providing funds amounting to RM2 billion.
- The Government has received commitments from GLCs to enhance CSR (Corporate Social Responsibilities) activities in human capital development.
- The Government will take steps to liberalise the services sector to attract more investments, bring in more professionals and technology as well as strengthen competitiveness of the services sector.
- FIC (Foreign Investment Committee) will adopt a more liberal approach, which will bring positive changes and nurture a more investor-friendly environment to attract more investments, including FDIs.
- Radio Televisyen Malaysia will implement several projects to develop the local music industry at a cost of RM20 million.
- The Government will strengthen the value-for-money approach in Government procurement. To manage costs, the implementation of design and build projects will not be allowed except in cases requiring high technical expertise. In addition, project proposals must obtain 26 approval from the Standards and Costs Committee.
Source of information: The Star (source)