‘THE MOTHER OF ALL BUDGETS’
‘Prospering an inclusive economy, balancing between worldly and hereafter, for the wellbeing of rakyat, towards the TN50 aspiration’ ...this document will chart the course in building a Malaysian Nation for the next 30 years crafted on a new canvas based
MR speaker, sir, I beg to move the bill entitled “An Act to Apply a Sum From the Consolidated Fund for the Service of the Year 2018 and to Appropriate That Sum for the Service of That Year” be read a second time.
In the name of Allah, the Most Gracious, the Most Merciful.
INTRODUCTION
There is no God but Allah, and Muhammad is the messenger of Allah. Send your blessings to our Prophet Muhammad SAW (peace be upon him), and salute him with all respect.
Greetings, Salam Negaraku and Salam 1Malaysia to Mr speaker, Sir, members of parliament, ladies and gentlemen, and all Malaysians from Northern Perlis to Tanjung Piai in the South, as well as Sabah and Sarawak.
Many may have predicted that the 2017 Budget was an election budget.
This is expected as there were many initiatives and allocations announced for the rakyat and in the interest of the nation. However, their predictions were untrue.
Last week, our Indian friends celebrated the Festival of Lights or Deepavali. We wish Happy Deepavali to all. As Friday being an important day for Muslims, let’s celebrate together.
As such, I would call upon the rakyat to rejoice in receiving the gifts, rewards and incentives, which will be presented in this budget, subject to a condition.
And, the condition is that you follow through this presentation from the beginning to the end.
I am standing here, on this day, Oct 27, 2017, or 7 Safar 1439 Hijri, to bring good and happy news, which will put smiles on every face.
This good news is for all beloved Malaysians to enjoy, regardless of race and background.
It is clear that every segment of society will reap the benefits from this budget.
Hence, on behalf of the government, let us first immerse and analyse on what I am about to present. Otherwise, you will miss the good news.
In building a civilised nation, we should always be gracious, forgive and forget.
ECONOMIC PERFORMANCE AND CHALLENGES
First, let us be grateful to Allah SWT (may He be praised an exalted) for the continued positive expansion of our economy.
During the first half of 2017, the economy recorded a sterling growth of 5.7 per cent.
Therefore, we should not fall for lies and non-stop propaganda on social media by irresponsible parties, stating that the World Bank has issued negative reports on the nation’s economy.
In fact, the World Bank has revised their forecasts on the East Asia and Pacific region.
The World Bank has revised upwards Malaysia’s GDP (gross domestic product) forecast from 4.9 per cent to 5.2 per cent for 2017 and commended the country’s economic performance for its laudable policies.
In addition, the government forecasts the Malaysian economy to record an annual growth between 5.2 and 5.7 per cent in 2017, higher than the March estimates ranging between 4.3 and 4.8 per cent.
For the past eight years, amid economic challenges, Malaysia has made significant development in two important aspects:
FIRST, strengthening and deepening diplomatic and trade relations with the world’s largest economic powers, such as China, India, Saudi Arabia and the United States.
Furthermore, private investment has increased significantly to more than RM211 billion compared with RM81 billion in 2009.
SECOND, since 2009, the country has been facing various external challenges, such as plummeting global crude oil prices and international geopolitical tensions. Notwithstanding these uncertainties, we remain steadfast in managing country’s finances, practising efficient governance and prudent fiscal discipline.
With systematic and organised plans and strategies, and initiatives, the nation’s fiscal deficit is estimated to be reduced to 3 per cent of GDP in 2017 from 6.7 per cent in 2009. We are confident that it will be further improved to 2.8 per cent in 2018.
As a result, three prestigious international credit rating agencies have maintained their ratings on Malaysia as “A-” with a stable prospect.
Let us all work hard to ensure fruitful outcomes.
Most importantly, amid various external headwinds, we should maintain our strong economic growth momentum and dynamism.
Hence, the government introduced several transformation programmes under the National
Transformation Policy (NTP) in 2009. The policy emphasises on quality and efficiency of the public service delivery system, particularly in stimulating economic growth.
The NTP also encompasses the New Economic Model, which is in line with both the 10th Malaysia Plan (10MP) and 11th Malaysia Plan (11MP).
Since 2009, economic initiatives have been the main focus of the government, followed by other programmes, according to its importance, including the Political Transformation Programme.
Hence, all the initiatives implemented by the government for the past eight years have been successful. These include:
FIRST, about 2.26 million jobs were created, which is 69 per cent of the 3.3 million job opportunities
targeted by 2020;
SECOND, in August, exports peaked to one of its highest levels, exceeding RM80 billion and recorded a double-digit growth; and,
THIRD, currently, the international reserves amounted to US$101.4 billion, or RM428.7 billion, which is sufficient to finance 7.5 months of retained imports compared with US$21.7 billion, or RM59.1 billion, during the Asian Financial Crisis in 1997.
In addition, the 2016 Report of Household Income and Basic Amenities Survey has highlighted our achievements, which include:
FIRST, income per capita has increased from RM27,819 in 2010 to RM40,713 in 2017, and is expected to increase further to RM42,777 in 2018;
SECOND, monthly median income
has also increased from RM4,585 in 2014 to RM5,288 in 2016;
THIRD, for the B40 (Bottom 40 per cent) household income, the monthly median income has increased from RM2,629 to RM3,000 between 2014 and 2016; and,
FOURTH, household income distribution in Malaysia has improved with the Gini coefficient reduced from 0.441 in 2009 to 0.399 in 2016, the lowest in the history of Malaysia. This reflects narrowing income gap as the country progresses towards a more equal distribution.
2018 BUDGET ALLOCATION
In the interest and prosperity of the rakyat, the 2018 Budget will allocate a sum of RM280.25 billion, an increase in allocation as compared with RM260.8 billion in the 2017 Budget.
Of which, RM234.25 billion is allocated for Operating Expenditure (OE), while RM46 billion for Development Expenditure (DE). This allocation does not include contingencies, which amounts to RM2 billion.
Under the OE, a total of RM79.15 billion is for emolument and RM33.62 billion for supplies and services.
Meanwhile, a sum of RM119.82 billion is allocated for fixed charges and grants. A sum of RM1.08 billion is allocated for other expenditures, while RM577 million for the purchase of assets.
Under the DE, the economic sector will receive the highest share of RM26.34 billion. The social sector is allocated a sum of RM11.72 billion. Meanwhile, the security sector will be allocated a sum of RM5.22 billion and the general administration RM2.72 billion.
For 2018, the Federal Government’s revenue collection is expected to record RM239.86 billion.
Of significance, the government is committed to implement fiscal consolidation measures and to ensure that the government’s financial position continues to be resilient, and debt level remains low in the medium and long terms.
This budget is most vital as it summarises all the initiatives that has spurred the economy since I took office in 2009.
Indeed, it is one of my main report cards to the rakyat and the government under my leadership during my two-term administration.
Hence, this document will chart the course in building a Malaysian Nation for the next 30 years crafted on a new canvas based on the Syariah Requirement Framework.
Since we declared Independence, we have been fortunate as our forefathers have governed and administered this country embedded with syariah requirements. This framework emphasises on five aspects, namely religion, life, intellectual, lineage and wealth in each of the government’s plan and policy.
This was clearly mentioned in
Surah al-Mumtahanah, verse 12, of the importance to provide basic necessities for the rakyat
(Dho’ruriyat).
Meanwhile, through interpretation of Surah al-Hajj and Hadith Riwayat Ahmad, Haajiyat refers to matters relating to easing the burden of the rakyat and providing a comfortable life. Third, Tahsiniyat means luxurious needs.
Therefore, for the past six decades, all Barisan Nasional’s efforts have been inspired by Allah SWT to ensure that leaders are guided by the Syariah Requirement Framework.
This framework is further solidified with Federal Constitution; Rukun Negara; 1Malaysia “People’s First, Performance Now” philosophy; and the latest TN50 (Transformasi Nasional 2050) aspiration.
These reflect the continuity of government’s administration, practising moderation and rejecting extremism.
Hence, the alternating leadership of this Party has structured its entire policies and strategies based on the Syariah Requirement Framework.
While this framework has not been written in any government documents, but its practices are reflected in all inter-related national philosophies and policies.
In a nutshell, the Syariah Requirement Framework adopted by the government is targeted to benefit the rakyat as a whole, taking into account of government’s capabilities, following the three priorities namely Dho’ruriyat,
Haajiyat and Tahsiniyat.
It is then proven that the BN government has the wisdom and experiences of 60 years, which are fundamental in developing and building a proud nation state.
Therefore, based on these principles and philosophies, and with the blessings of Allah, I present you the 2018 Budget.
The 2018 Budget was formulated in line with the 11MP and this is the third budget under the plan. In order to ensure the nation’s wealth and prosperity to be enjoyed equitably and inclusively through strong economic growth and competitiveness, this budget, with the theme “Prospering an Inclusive Economy, Balancing Between Worldly and Hereafter, for the Wellbeing of Rakyat, Towards TN50 Aspiration” is based on eight main thrusts.
FIRST THRUST: INVIGORATING INVESTMENT, TRADE, AND INDUSTRIES
Total investment in the country is expected to increase by 6.7 per cent, accounting for 25.5 per cent of GDP in 2018.
In this regard, the government will continue to emphasise on high-impact investment, focusing on industries related to petroleum, logistics, aerospace, rail, robotics and automation, and export-oriented industries.
Private investment has continued to outpace public investment with a ratio of 70:30. Private investment is estimated to reach RM260 billion in 2018 compared with only RM81 billion in 2009.
Meanwhile, public investment is estimated to record RM109 billion compared with RM75 billion in 2009. In this, it is in line with the objective of the Economic Transformation Programme (ETP) to propel the private sector as engine of growth.
This includes a sum of RM1 billion allocated for the Five Main Corridors. The government will develop the South Perak Region, comprising Proton City, Educity and Youth City in Tanjung Malim, as well as Bukit Kayu Hitam DutyFree Zone; the construction of port and industrial park in Tok Bali, Kelantan; and, access road to Baleh Dam, Sarawak.
At the same time, in order to place Malaysia as a preferred investment destination, the Principal Hub tax incentive will be extended until Dec 31, 2020. The government will allocate RM200 million to the high-impact strategic fund under Mida (Malaysian Investment Development Authority).
Malaysia is committed to economic information sharing introduced by the OECD (Organisation for Economic Cooperation and Development). These include implementation of the Base Erosion and Profit Shifting Plan of Action, as well as the Automatic Exchange of Information commencing September 2018.
ENHANCE SMALL AND MEDIUM ENTERPRISES
Malaysia will progress further through inclusive participation of small and medium enterprises (SMEs). Currently, we have Jeruk Pak Ali, Sydney Cake House, Satay Haji Samuri and Telekung Siti Khadijah, which have established their brands, with some having presence in international markets.
We welcome them to Parliament and congratulate them for their hard work and achievements.
It is targeted that SMEs will contribute 41 per cent of GDP by 2020, through the following measures:
FIRST, a total of RM7 billion is allocated under the Skim Jaminan Pembiayaan Perniagaan (SJPP), of which, RM5 billion for working capital and RM2 billion with 70 per cent guaranteed by the government for services sector, including the Industrial Revolution (IR 4.0);
SECOND, an unprecedented amount of RM1 billion is provided as loans to companies with 70 per cent guaranteed by the government. These loans are provided under SJPP to enable SMEs to automate production processes and reduce employment of foreign workers;
THIRD, an additional RM1 billion is provided to the SyariahCompliant SME Financing Scheme, increasing the fund size to RM2.5 billion. A subsidy of 2 per cent will be provided on profit earned to ease the costs of financing;
FOURTH, a sum of RM200 million is allocated to SMEs for training programmes, grants, and soft loans under the SME Corp; and,
FIFTH, about RM82 million is allocated for the development of halal industries and products under various agencies.
MICRO FINANCING
The government also includes micro entrepreneurs, such as the popular coconut shake seller in Klebang, Melaka, in this budget.
For this purpose, the government provides the highest allocation to TEKUN, amounting to half a billion ringgit.
In addition, to appreciate Amanah Ikhtiar Malaysia’s (AIM) borrowers, of which the majority are women and good paymasters, the government will allocate an additional RM200 million to the fund. With this, the total fund size will be RM2.7 billion, benefiting nearly 400,000 borrowers.
One success story is on Kak Wan Azizah Wan Salleh, who started her business in 1993 with a loan of RM500 from AIM and became a successful millionaire in poultry farming.
Furthermore, a sum of RM80 million is allocated under the Rural Economic Financing Scheme (SPED) through Bank Rakyat and SME Bank to provide financing facilities to rural Bumiputera entrepreneurs.
ACCELERATING EXPORTS
The country’s exports will be further accelerated by focusing on high-impact export sectors, through the following measures:
FIRST, a sum of RM150 million is provided to Matrade, Mida and SME Corp to implement promotional programmes, and expand export markets, including the Market Development Grant;
SECOND, a sum of RM1 billion is provided by EXIM Bank for insurance coverage credit facilities and RM200 million for credit financing facilities to SME exporters; and,
THIRD, a sum of RM100 million is provided as loan with 70 per cent guaranteed by the government to automate production of local furniture for exports.
BOOSTING AGRICULTURAL SECTOR
The government cares for padi farmers, farmers, smallholders, fishermen and others in the agriculture sector.
As such, for the first time in the history of the nation’s budget, a large allocation of RM6.5 billion is provided to assist farmers, fishermen, smallholders and rubber tappers. Among the various programmes to be implemented are:
FIRST, a sum of RM2.3 billion is allocated to provide assistance and incentive, such as fertilisers and input to padi farmers, rubber smallholders and fishermen;
SECOND, about RM500 million is allocated to improve irrigation infrastructure and upgrade plantation roads;
THIRD, about RM200 million is allocated for rubber replanting programme and provide infrastructure to increase production of latex instead of cup lump as this will raise the income of smallholders;
FOURTH, about RM140 million is allocated to developing and replanting of oil palm as well as enhance marketing programmes;
FIFTH, a sum of RM200 million is allocated for the agricultural programme as new sources of income, particularly the development of dairy industry through the establishment of Lembaga Tenusu dan Ruminan. Others include the development of corn, coconut, durian and culinary industry. For example, in Hong Kong, it is said that the price of a Musang King durian is sold at RM800;
SIXTH, for the first time, a special scheme will be implemented to increase the production of coconuts through replanting of new varieties, namely CARECA and MATAG. This scheme will be implemented with an allocation of RM50 million, benefiting 10,000 smallholders.
Meanwhile, the management of coconut, pineapple and fruits industries will be placed under one board; and,
SEVENTH, for the first time, I would like to announce a monthly assistance of RM200 for three months to padi farmers while waiting for the harvest season with an allocation of about RM150 million.
BOOSTING TOURISM INDUSTRY
The tourism sector is one of the key sources of income to the nation’s economy.
According to the World Tourism Organisation Report, in 2016, Malaysia was ranked at 12th position in terms of tourist arrivals.
It is estimated that there will be 28 million tourist arrivals in 2018. As such:
FIRST, I am pleased to announce that 2020 is declared as the Visit Malaysia Year. In 2020, Malaysia will also host series of international meetings, namely APEC (Asia-Pacific Economic Cooperation), WCIT (World Congress on Information Technology) and CHOGM (Commonwealth Heads of Government Meeting);
SECOND, a sum of RM2 billion is allocated to SME Tourism Fund to provide soft loans to tour operators with an interest subsidy of 2 per cent;
THIRD, an additional RM1 billion is provided to the Tourism Infrastructure Development Fund as soft loans;
FOURTH, a sum of RM500 million is provided to develop and promote tourism through upgrading infrastructure facilities as well as promoting homestay and eco-tourism programmes;
FIFTH, expand eVisa regional hub by facilitating visa application worldwide, especially for expatriates, foreign students, and the Malaysia My Second Home programme ;
SIXTH, extend tax incentive for investment in new four- and fivestar hotels until Dec 31, 2020; and,
SEVENTH, extend tax incentive for tour operators to year of assessment 2020.
The health-tourism industry will be strengthened as one of the country’s sources of income. This includes providing end-toend service for medical tourists coming to Malaysia.
In this respect, the government is allocating RM30 million to Malaysian Healthcare Travel Council (MHTC) to implement the following initiatives:
FIRST, promote Malaysia as the Asian Hub for Fertility Treatment, including IVF (In-vitro fertilisation) and cardiology. The eVisa facility will be extended to cover other specialised medical services and high-value healthcare packages;
SECOND, introduce the Flagship Medical Tourism Hospital programme, which offers special incentive to private hospitals to attract medical tourists;
THIRD, extend the investment tax allowance (ITA) of 100 per cent for medical tourism until Dec 31, 2020;
FOURTH, provide double tax deduction on expenses incurred in obtaining certification from healthcare services accreditation bodies for dental and ambulatory services registered with MHTC; and,
FIFTH, increase the special tourism healthcare incentive from 50 to 100 per cent of the incremental value of exports, for
Malaysia will progress further through inclusive participation of small and medium enterprises.
private healthcare services, beginning year of assessment 2018 to 2020.
DRIVING LOGISTICS SECTOR
In order to ensure a more balanced economic spillover between urban and rural areas, the government will improve logistics and transport infrastructure, through these measures:
FIRST, the East Coast Rail Link (ECRL) project, which connects Port Klang to Pengkalan Kubor, Kelantan, has the capacity to transport cargo and passengers within four hours. The construction work of this project will begin in January 2018;
A sum of RM110 million is also allocated to provide an alternative road to Port Klang to smoothen and complement the transportation network;
SECOND, the MRT2 line from Sungai Buloh–Serdang–Putrajaya Project, spanning 52km, covering 37 stations, with an estimated construction cost of RM32 billion.
Meanwhile, the government will expedite the construction of MRT3, or Circle Line, to be completed by 2025, earlier than the initial target in 2027.
Furthermore, the construction of the LRT3 project which will connect Bandar Utama to Johan Setia, Klang, is expected to be completed by February 2021.
THIRD, the High-Speed Rail project connects Kuala Lumpur and Singapore with a distance of 350km in 90 minutes, is expected to benefit rakyat by 2026;
FOURTH, the West Coast Highway from Banting, Selangor, to Taiping, Perak, is under construction with an estimated cost of RM5 billion.
FIFTH, for the Central Spine Road, a sum of RM230 million is allocated in 2018 to continue the construction work, among others, roads from Raub to Bentong and Gua Musang, Kelantan, to Kampung Relong, Pahang;
SIXTH, declare Pulau Pangkor in Perak as a duty-free island. However, the duty-free status excludes products such as alcoholic beverages, tobacco and motor vehicles; and,
SEVENTH, to stimulate the economic growth in the northern area, a Special Border Economic Zone in Bukit Kayu Hitam will be developed.
This development includes the Free Industrial Zone (FIZ), which will be a new attraction for both domestic and foreign investors.
Furthermore, the government will take a holistic approach to meet the basic needs of the rakyat by providing efficient and safe public transportation system through the following measures:
FIRST, a sum of RM3 billion is allocated to the Transportation Development Fund to procure vessels, as well as develop the aerospace technology industry and rail. a sum of RM1 billion is also allocated to the Public Transportation Fund for working capital and procurement of assets, such as buses and taxis;
SECOND, a sum of RM95 million is allocated to upgrade and construct jetties, as well as dredge river estuaries;
THIRD, following many express bus accidents, a sum of RM45 million is allocated to develop a biometric control system to monitor the bus drivers; and,
FOURTH, a sum of RM55 million is provided to subsidise train services in rural areas, from Tumpat to Gua Musang.
The government will implement various initiatives to safeguard the welfare of rakyat irrespective of political differences and geographical locations to enhance economic growth.
FIRST, upgrade the Pulau Pinang International Airport and Langkawi International Airport;
SECOND, the construction of a new airport in Mukah as well as expansion of airports in Kota Bharu and Sandakan;
THIRD, a study is being undertaken by the government on a new airport in Pulau Tioman; and,
FOURTH, to stimulate development in Labuan, the government will conduct a feasibility study for the construction of a bridge connecting Labuan with the mainland in Sabah.
STRENGTHENING FINANCIAL MARKET
Malaysia is renowned as the leader in Islamic finance. As such, to strengthen Malaysia’s position as a comprehensive and competitive financial centre, the government will continue with the following measures:
FIRST, a sum of RM1.5 billion is allocated under SJPP, using intellectual property as an instrument of financial collateral with up to 80 per cent financing guarantee; and
SECOND, provide tax exemption on stamp duties imposed on contract notes for sales and purchase transactions of ExchangeTraded Fund and Structured Warrants for 3 years, effective January 2018.
To stimulate the capital market and provide access to investment, the Alternative Trading System will be introduced subject to compliance to all requirements and regulatory standards. This will enable efficient and significant transactions.
The government understands the constraints of small companies, such as start-ups in obtaining financing to expand their market.
Therefore, the government encourages venture capital activities through the following measures:
FIRST, a sum of RM1 billion is provided by major institutional investors for investment in venture capital in main selected sectors, coordinated by Securities Commission (SC);
SECOND, expand income tax exemption to include management and performance fees received by venture capital management company, effective from year of assessment 2018 to 2022;
THIRD, to facilitate venture capital companies to invest in venture companies, it is proposed that the minimum investment in venture companies be reduced from 70 per cent to 50 per cent, effective year of assessment 2018 to 2022;
FOURTH, companies or individuals investing in venture capital companies is provided tax deduction equivalent to the amount of the investment made in the venture companies, limited to a maximum of RM20 million annually; and
FIFTH, extend the income tax exemption incentive equivalent to the amount of investment made by an angel investor in venture companies to Dec 31, 2020.
The government will continue to invigorate the sustainable and responsible investment (SRI) through the following measures:
FIRST, income tax exemption for recipients of the special Green SRI Sukuk grant totalling RM6 million; and
SECOND, income tax exemption on income from management fee to be expanded to approved conventional SRI fund managers from year of assessment 2018 to 2020.
The government will promote a cashless society economy through effective employment of foreign workers. Beginning 2018, Bank Negara Malaysia will monitor salary payment through local bank accounts for foreign workers, excluding domestic helpers.
SECOND THRUST: TOWARDS TN50 ASPIRATION
The 2050 National Transformation (TN50) was announced in the 2017 Budget. TN50 will chart a proud nation state, to be in the top 20 countries in the world.
Using the bottom-up approach, I have held series of TN50 engagements and dialogues with various segments of society, such as youth, graduates, civil servants, artists, educators and private sector to obtain aspirations, views and ideas.
To date, more than 80,000 aspirations have been received, involving 1.8 million rakyat representing various segments of society nationwide.
CHILDCARE AND PEOPLE WITH DISABILITIES WELFARE CENTRES
Moving towards TN50, in achieving work and life balance, the local authorities are required to ensure that childcare facilities are provided in all new office buildings, starting with Kuala Lumpur.
In addition, the TN50 vision emphasises the aspects of safeguarding all groups, including the welfare of people with disabilities (PWDs).
Hence, additional tax deductions are extended to cover employers hiring workers affected by accidents or critical illnesses and certified by Social Security Organisation’s (Socso) Medical Board that they are still fit to work.
INCULCATING THE CULTURE OF SAVINGS IN TN50 GENERATION
In order to ensure the bright future of the TN50 generation, the government together with Permodalan Nasional Bhd (PNB) has agreed that every Malaysian baby born from Jan 1, 2018 to 2022, be provided with an Initial Savings Fund of RM200 through PNB’s Unit Trust Scheme.
This new scheme will be named as Amanah Dana Anak Malaysia or, ADAM50.
EDUCATION FOR TN50 GENERATION
With regard to education for TN50 generation, a total of RM250 million is allocated for the following:
FIRST, set up a Science, Technology, Engineering and Mathematics (STEM) centre to develop the latest learning methods to train STEM specialist teachers utilising existing facilities at teachers training institute in collaboration with Academy of Science Malaysia;
SECOND, enhance the Computer Science module, including coding programmes in primary and secondary school curriculums, which exist in Form One and Form Three;
THIRD, allocate a sum of RM190 million to upgrade 2,000 classes into a 21st Century Smart Classrooms in order to enhance creative-based learning and innovative thinking;
FOURTH, towards TN50, the government acknowledges the role of artists to increase the quality of culture to a higher level. For this, a sum of RM20 million is allocated to Cultural Economy Development Agency.
I am proud with our recent achievements in higher education, which include:
FIRST, according to the 2017/2018 QS University Ranking Report, five local research universities improved their ranking and are among the top 300 best universities in the world, which is the top 1 per cent in the world;
SECOND, in fact, University of Malaya’s ranking has improved by 19 places to 114, almost among the best 100 universities in the world;
THIRD, in terms of world’s higher education system, Universitas 21 ranked Malaysia as the 25th best in the world, improving by 11 positions over the past six years; and,
FOURTH, with 134,000 foreign students in local higher learning institutions, we are nearing the target of achieving as the Regional Higher Education Hub.
Since 2009, the cumulative scholarship provided by the government amounts to RM44 billion. For 2018:
FIRST, a sum of RM2.2 billion is allocated for scholarships provided by the Public Service Department, Higher Education Ministry and Health Ministry;
SECOND, a sum of RM400 million for research and development grants is provided to Public Higher Learning Institutions (IPTA), compared with RM235 million allocated in the previous budget, including a special allocation for University of Malaya to achieve the status of Top 100 Universities in the World in the near future; and,
THIRD, a sum of RM90 million is allocated for the MyBrain programme for 10,600 individuals to further their studies in master’s degree and PhD; and,
FOURTH, students in Higher Learning Institutions and Form Six will be provided with the Book Voucher Assistance of RM250 each, benefiting 1.2 million students.
I would like to take this opportunity to congratulate the new line of leadership of the student representative council at all public universities, with a majority of them being undergraduates from the Pro-Aspirasi group.
TALENT AND CAREERS OF TN50
Malaysians need to be ready, alert and swift through training and retraining in meeting the job market requirements. To address this issue, the government will continue with, for example, the SL1M (1Malaysia Training Scheme) Apprenticeship Programme, which have trained 138,000 graduates. It will be continued with an additional 5,000 graduates to a total of 25,000 graduates next year. Meanwhile, the open interview programme by the SL1M Unit in EPU will be continued with an allocation of RM40 million.
To expand SL1M, private companies awarded with government contracts are mandated to allocate 1 per cent of their total project value to SL1M.
In addition, the government will create a one-stop centre incorporating agencies, such as JobsMalaysia, SL1M, Socso, the Human Resources Development Fund (HRDF) and Unit Peneraju Agenda Bumiputera (TERAJU) in Urban Transformation Centres (UTCs) to provide professional advisory services in seeking employment and training.
To identify best talents, the government will create a “talent file” programme, National Leaders Circle, under TalentCorp. This programme will identify and shortlist suitable and credible candidates to fill critical and senior posts.
The government is very concerned on the social ills in the society. To address this, a matching grant of RM50 million will be provided to social enterprises and NGOs (non-governmental organisations) to resolve daily social issues and challenges in innovative ways.
SPORTS DEVELOPMENT
Last August and September, Malaysia was declared the overall champion at the 29th Sea Games and ranked second in the 9th Asean Para Games.
Hence, on behalf of the government, let’s give the most roaring applause to all our heroes and heroines.
To continue the momentum towards becoming sports powerhouse, the government allocates RM1 billion to implement various initiatives, including FitMalaysia, National Sports Day, training for athletes, grassroots programmes and a national football development programme.
The government will also build 14 new sports complexes nationwide with a cost of RM112 million.
In addition, the government allocates RM20 million to the Bukit Jalil Sports School to upgrade its facilities as the premier sports school.
THIRD THRUST: EMPOWERING EDUCATION, SKILLS AND TRAININGS, AND TALENT DEVELOPMENT
On average, the Malaysian education expenditure is twice the amount of other Asean countries. For 2018, a sum of RM61.6 billion is provided for this sector.
Of which, RM654 million is allocated for construction of four pre-schools, nine Permata centres, including two new centres for autistic children, 48 primary, secondary schools and vocational colleges, as well as one matriculation centre.
UPGRADING AND MAINTAINING SCHOOLS
Every year, priority is given to the Special Fund for School Upgrading and Maintenance. A total of RM550 million is allocated for this purpose, including:
NATIONAL schools — RM250
million;
NATIONAL-TYPE Chinese schools — RM50 million;
NATIONAL-TYPE Tamil schools
— RM50 million;
MISSIONARY schools — RM50
million;
BOARDING schools — RM50
million;
MARA Junior Science Colleges — RM50 million; and,
GOVERNMENT-AIDED Religious schools — RM50 million.
The government realises that there are 2,000 dilapidated schools nationwide that need upgrading and refurbishing.
For these repair works, through Industrial Building System, the government provides the largest allocation of RM2.5 billion for a period of two years, of which RM500 million is provided for schools in Peninsular Malaysia, RM1 billion for schools in Sabah and RM1 billion for schools in Sarawak.
SCHOOLING ASSISTANCE
A total of RM2.9 billion is also allocated for food assistance, textbooks, per capita grants and federal scholarships for schools.
Meanwhile, schooling assistance worth RM100 per student from the low-income household will be continued with an allocation of RM328 million, benefiting 3.2 million students.
The government recognises the role of teachers in strengthening the education and moulding the future generation.
I would like to take this opportunity to thank all teachers nationwide who have strived in building our future generation.
HIGHER EDUCATION FUNDING
As we are aware, the National Higher Education Fund Corporation (PTPTN) was established to manage funding for Malaysian students pursuing tertiary education.
Concerning PTPTN, we need to understand as stated in hadith, debt remains as debt and must be paid.
The borrowers of PTPTN loans
must be responsible by paying their debt so that the future generation to continue to borrow from PTPTN.
To all PTPTN borrowers, the government agrees to extend the discount for repayment of PTPTN loans until Dec 31, 2018, as follows:
20 PER CENT on the outstanding debt for full settlement;
10 PER CENT for repayment of at least 50 per cent on the outstanding debt made in a single payment; and,
10 PER CENT for repayment through salary deductions or scheduled direct debit.
In addition, I would like to announce additional flexibility for PTPTN loans as follows:
FIRST, for students from B40 households undergoing highly marketable courses, an additional RM200 million is provided to increase the maximum loan amount; and,
SECOND, the grace period for loan repayment is extended to 12 months upon completion of study compared with six months currently.
In addition, for borrowers intending to pursue their studies to a higher level, for example from diploma to undergraduate, they may combine both loans into a single loan and to repay upon completion of their studies.
Clearly, the government has provided various means to assist students in repaying their loans.
SKIM SIMPANAN PENDIDIKAN 1MALAYSIA
Furthermore, to inculcate the culture of savings for education, a sum of RM250 million is provided to 500,000 contributors, aged 7 to 12, under the National Education Savings Scheme (SSPN-i Plus), which was rebranded as Skim Simpanan Pendidikan 1Malaysia (SSP1M) managed by PTPTN.
A matching grant of RM500 will be provided to contributors with a total contribution of at least RM500 and only can be withdrawn upon reaching 18.
In addition, individual income tax relief for net savings in SSP1M up to RM6,000 will be extended for another 3 years, effective from year of assessment 2018.
ENHANCING TECHNICAL AND VOCATIONAL EDUCATION TRAINING
The government is aware about the importance of transformation in the Technical and Vocational Education Training (TVET) in producing highly skilled and competitive workforce. In this regard, all TVET institutions under seven ministries have been merged and known as “TVET Malaysia” under the purview of the Human Resources Ministry.
MRT is a success story, where not only the project was completed ahead of schedule, but it also saved RM2 billion from the initial construction costs.
In addition, a sum of RM4.9 billion is allocated to implement the TVET Malaysia Masterplan.
To encourage TVET graduates to pursue their studies, the government will also provide 100 TVET Outstanding Student Scholarships with an allocation of RM4.5 million.
To support the development of skilled workers in the rail sector, the government will establish the National Rail Centre of Excellence (NRCOE) to oversee and coordinate quality assurance as well as accreditation of national rail education and training. In addition, Malaysia Rail Link Sdn Bhd, in collaboration with IPTAs, will train 3,000 professionals in this industry.
FOURTH THRUST: DRIVING INCLUSIVE DEVELOPMENT
PROVIDING QUALITY INFRARAKYAT
In progressing towards a developed nation, quality infrastructure and interconnectivity will be modernised.
Hence, the government will continue to focus on world-class infra-rakyat projects. For example, The MRT Sungai Buloh – Kajang Line was successfully completed with a daily capacity of 400,000 commuters.
MRT is a success story, where not only the project was completed ahead of schedule, but it also saved RM2 billion from the initial construction costs.
As for the infrastructure facilities in Sabah and Sarawak, the government has fulfilled its promise through the construction of the Pan-Borneo Highway.
The Pan-Borneo Highway is expected to enhance connectivity and invigorate economic activities in Sabah and Sarawak, including rural and remote areas, such as Kapit-Ulu Song.
To provide basic infrastructure in the rural areas, a sum of RM6.5 billion is allocated, among others:
FIRST, a sum of RM2 billion is allocated for the Pan-Borneo Highway. For Sarawak, all 11 construction packages have been tendered, while five out of 35 packages in the first phase in Sabah have been awarded, and the remaining 12 is under tender process;
SECOND, a sum of RM1.1 billion is allocated for rakyat-centric projects, including building and upgrading bridges, village street lights, musolla, small bridges and markets;
THIRD, a sum of RM1 billion is allocated through the Malaysia Communications and Multimedia Commission (MCMC) to develop communication infrastructures and broadband facilities in Sabah and Sarawak;
FOURTH, a sum of RM934 million
is allocated for the construction of rural roads, including almost RM500 million for Sabah and Sarawak;
FIFTH, an allocation of RM672 million is provided for electricity supply in rural areas, including RM620 million for Sabah and Sarawak, benefiting 10,000 rural homes.
As a whole, since 2009, subsidy worth more than RM100 billion has been spent, including gas to generate cheap, quality and reliable electricity supply for the rakyat.
SIXTH, a sum of RM420 million, including almost RM300 million for Sabah and Sarawak, isallocated to provide clean water supply, benefiting 3,000 homes;
SEVENTH, a sum of
RM500 million is al- located for the Public Infrastructure Maintenance Programme and Basic Infrastructure Project to meet the needs and wish list of the rakyat at the grassroots level; and,
EIGHTH, a sum of RM50 million is allocated for surveying and mapping of customary lands, of which RM30 million for Sarawak and RM20 million for Sabah.
A part of the rakyat-centric projects will be implemented through private financing initiatives.
NATIONAL BLUE OCEAN STRATEGY
The National Blue Ocean Strategy (NBOS) will continue to be implemented at a faster pace and in an integrated manner at a low cost with high impact.
For 2018, a sum RM300 million is allocated to implement NBOS programmes, including construction of new UTCs, Blue Ocean Entrepreneur Township, Mobile CTCs (Community Transformation Centres), entrepreneurship programmes, Global Entrepreneurship Community, as well as inclusive and vibrant social entrepreneurs.
THE WELFARE OF FELDA SETTLERS
The government continues to safeguard the welfare of Felda settlers. More than 112,000 settlers received six main incentives, including the Settlers Special Incentive of RM5,000.
The government will reimburse the cess money that had been paid by settlers for the replanting scheme from rubber to oil palm from 2010 to 2016. This will benefit 8,925 FELDA settlers with an allocation of RM43 million. In addition, a sum of RM60 million will be provided for the oil palm replanting programme.
Furthermore, a sum of RM164 million is allocated to build 5,000 second-generation Felda homes in collaboration with SPNB.
In addition, nearly RM200 million is provided for Felda to supply water and upgrade road as well as street lights.
More importantly, the government will always safeguard the welfare of Felda settlers.
SECURITY AND PUBLIC ORDER
To counter terrorism and extremism, such as the Islamic State, or Daesh, the government has established a Regional Digital Counter-Messaging Communications Centre.
In addition, the government will increase safety at the borders and enhance public order with an allocation of RM14 billion for the Malaysian Armed Forces, almost RM9 billion for the Royal Malaysian Police and more than RM900 million to the Malaysian Maritime Enforcement Agency (MMEA).
Among the main programmes are:
FIRST, a sum of RM3 billion is allocated for procuring and maintaining defence assets;
SECOND, a sum of RM720 million is allocated to build 11 headquarters and six police stations, as well as the purchase of firearm fittings and operations vehicle. Meanwhile, an allocation of RM170 million is provided to upgrade ICT (information and communicationt technology) equipment, including 1PDRMnet system, as well as RM100 million to upgrade communication systems; In addition, to safeguard the welfare of police personnel, I would like to announce the construction of 10,000 units of houses under the 1Malaysia Civil Servants Housing-PDRM
(PPA1M-PDRM) programme at affordable prices, according to the police salary scheme.
THIRD, a sum of RM490 million is allocated to MMEA to repair and maintain ships and boats, upgrade jetties as well as procure three patrol boats;
FOURTH, a sum of RM250 million is allocated to the Eastern Sabah Security Command (Esscom) to enhance security controls at Sabah and Sarawak borders, including RM50 million for coastal surveillance radar;
FIFTH, a sum of RM50 million is allocated to upgrade the capability of firearm assets of special task forces to combat terrorism ; and,
SIXTH, in addition, in appreciation the role of the People’s Volunteer Corps (Rela) in assisting the rakyat, the government will provide the highest allocation of almost RM250 million for necessary equipment, including uniforms.
In safeguarding the welfare of the armed forces, the government will:
FIRST, prepare the Armed Forces Family Housing (RKAT) blueprint to construct more than 40,000 units in phases by 2030. In 2018, almost 6,000 units will be built; and,
SECOND, a sum of RM40 million is allocated to upgrade five hospitals, build four polyclinics and hospital for ATM veterans.
Let us extend our heartiest appreciation to our security forces, including police, armed forces and MMEA, who have sacrificed for the country’s peace and sovereignty.
BUMIPUTERA WELLBEING TRANSFORMATION POLICY
As we are aware, the Bumiputera community accounts for almost 70 per cent of the total 32 million population.
Therefore, the government, through the Bumiputera Wellbeing Transformation policy, will continue to uphold Bumiputera empowerment as a national agenda.
Since 2009, various major initiatives to empower the Bumiputera economy has been and are currently being implemented.
In this regard, the Carve Out and Compete Initiative for Bumiputera has reached a total contract value of more than RM61 billion. In addition, a sum of RM1.7 billion is approved for 515 projects under the Facilitation Fund, which provides more than 44,000 employment opportunities.
The programme has proven that the Bumiputera contractors are more resilient and capable to complete projects earlier than schedule without affecting quality.
On the other hand, the Yayasan Peneraju Pendidikan Bumiputera has successfully trained nearly 17,000 Bumiputera professionals nationwide in the accounting and engineering fields.
In addition, a sum of RM2.4 billion is allocated to UiTM (Universiti Teknologi Mara). At the same time, the government has increased the number of student intakes to UiTM to more than 165,000, with a target to attain 250,000 students by 2020.
Notably, UiTM has succeeded in producing over 700,000 Malay and Bumiputera graduates.
Furthermore, in 2018, the government will allocate more than RM3.5 billion for the following initiatives:
FIRST, a sum of RM2.5 billion, the highest allocation ever, is provided for higher education scholarship and training programmes under the Mara Council. This will benefit nearly 90,000 students, including 1,500 in the critical fields such as AI (Artificial Intelligence), signalling and rail;
SECOND, a total of RM90 million is allocated for programmes, namely Peneraju Profesional, Skil and Tunas, benefiting almost 8,000 individuals;
THIRD, a sum of RM200 million is allocated for the Mara Graduate Employability Training Scheme (GETS);
FOURTH, a sum of RM555 million is allocated for Bumiputera entrepreneurship enhancement programme, comprising:
A sum of RM200 million for Program Keusahawanan dan Premis Perniagaan PUNB (Perbadanan Usahawan Nasional Bhd);
A sum of RM200 million is allocated for Program Keusahawanan Mara;
A sum of RM155 million is allocated for programmes, such as vendor capacity development, Tunas Usahawan Belia Bumiputera (TUBE), Skim Usahawan Permulaan Bumiputera (SUPERB), and Skim Anjakan Usahawan; and,
FIFTH, to increase equity and investment in strategic sectors, a sum of RM150 million is provided to Pelaburan Hartanah Bhd (PHB) and RM150 million to Ekuiti Nasional Bhd (Ekuinas).
WELLBEING OF CHINESE AND INDIAN COMMUNITIES
As an inclusive budget, for the Chinese community, the government will provide a sum of RM50 million as loans for SMEs through Koperasi Jayadiri Malaysia Bhd (Kojadi).
In addition, a sum of RM30 million will be channelled to the 1Malaysia Hawkers and Petty Traders Foundation to provide loans to Chinese hawkers.
Furthermore, to develop Chinese New Villages, a total of RM65 million is provided, while another RM10 million is provided for housing refurbishment programmes.
With regard to the Indian community, the average monthly household income of the Indian community increased significantly to 6.8 per cent per annum. Recently, I have launched the Malaysian Indian Blueprint (MIB).
For this, through Tabung Ekonomi Kumpulan Usaha Niaga (TEKUN), the government allocates RM50 million for the Indian Community Entrepreneur Development Scheme (SPUMI), benefitting more than 35,000 entrepreneurs. In addition, a sum of RM50 million is allocated for tje Indian community’s socio-economic development programme.
At the same time, through MIB, new intake of Indians to public higher learning institutions and public service will be increased to a targeted 7 per cent.
Under the Socio-economic Development of Indian Community (SEDIC), more than RM230 million has been distributed since 2014, benefiting more than 500,000 Indian participants.
The 2018 budget also introduces a new initiative for the Indian community. I am pleased to announce that PNB will make a special distribution amounting to 1.5 billion additional units of Amanah Saham 1Malaysia for the Indian community, up to 30,000 units for each investor.
To support this initiative, a fund amounting to RM500 million is allocated for a period of five years. This special investment loan scheme will be offered to 100,000 households from the B40 Indian community, limited to 5,000 units per participant.
MIB has proven to the Indian community that in the national development no one is left behind… “Indeed, the future belongs to us.”
ORANG ASLI
To raise the standard of living and economic development of the Orang Asli community, a total of RM50 million is provided, comprising community food assistance programmes, benefiting almost 5,000 Orang Asli students.
In addition, as an incentive to successful Orang Asli students, the government will provide an assistance of RM3,000 for parents to prepare their children’s enrolment in higher learning institutions.
Furthermore, the Orang Asli Settlement Integrated Development Programme will be continued with an allocation of RM60 million.
WOMEN AND FAMILY WELLBEING
Women play a very important role in the wellbeing of family and national development. Therefore, in recognising women’s contribution, the government is pleased to announce 2018 as the Women Empowerment Year.
In this respect, several initiatives will be implemented as follows:
FIRST, require at least 30 per cent participation of women as board of directors in GLCs and GLICs as well as statutory bodies by end-2018;
SECOND, propose maternity leave for the private sector to be increased from 60 days to 90 days as implemented by the public sector;
THIRD, a sum RM20 million is allocated to conduct training and entrepreneurship programmes, which includes the PEAK Entrepreneur Programme under MyWin Academy; and
FOURTH, in order to encourage women who have been on a career break for at least two years to return to the workforce, the government proposes that their earnings on a maximum of 12 months consecutive salary received be given personal income tax exemption. The incentive is available for women who return to the workforce between the year of assessment 2018 and 2020.
FIFTH THRUST: PRIORITISING THE WELLBEING OF RAKYAT AND PROVIDING OPPORTUNITIES TO GENERATE INCOME
GENERATING RAKYAT’S INCOME
The government is committed and continues to thrive to provide job opportunities and generate income, through the following measures:
FIRST, a sum of RM100 million is allocated to expand eRezeki, eUsahawan and eLadang Programmes under MDEC (Malaysia Digital Economy Corporation);
SECOND, a sum of RM120 million is allocated to provide easy loans to 1,000 1Malaysia Food Truck (FT1M) and 1Malaysia Mobile Food Kiosk entrepreneurs through Bank Rakyat and Bank Simpanan Nasional. The government will provide a subsidy of 4 per cent on the interest rates;
THIRD, a total of RM60 million will be provided to implement the 1AZAM Programme, including RM10 million for Sabah and RM10 million for Sarawak; and,
FOURTH, a sum of RM25 million will be provided for the ThreeWheel Motorcycle Programme under FAMA, GiatMara mobilepreneur and MyAGROSIS programmes.
In line with IR 4.0, all registered taxi drivers who wish to shift to ehailing application, a grant amounting to RM5,000 will be provided for the purchase of a new car.
INCREASING DISPOSABLE INCOME
BR1M (1Malaysia People’s Aid) is a form of targeted subsidy for those in need and has proven to be effective.
BR1M is an efficient form of cash transfer to assist the B40 households.
In 2017, BR1M has benefitted 7 million recipients with an allocation of RM6.8 billion. Likewise, in
2018, those recipients to continue to benefit from the BR1M cash transfer of up to RM1,200.
The government will continue to increase household disposable income as well as narrow the income gap in the country.
I would like to bring another good news to the 2.3 million tax payers, especially those in the M40 (Middle 40 per cent) group or specifically the middle-income range households, with income of less than RM9,000.
I would like to announce an individual income tax rates reduction of two percentage points for income tax band between RM20,000 to RM70,000, as follows:
FIRST, for the income tax band from RM20,001 to RM35,000, the rate is reduced from 5 per cent to 3 per cent;
SECOND, for the income tax band from RM35,001 to RM50,000, the rate is reduced from 10 per cent to 8 per cent; and,
THIRD, for the income tax band from RM50,001 to RM70,000, the rate is reduced from 16 per cent to 14 per cent.
This measure will increase the disposable income of the rakyat between RM300 to RM1,000. It is estimated that additional disposable income of RM1.5 billion can be spent by the rakyat. With this measure, more that 261,000 individuals are no longer subjected to income tax.
The government allocates a sum of RM3.9 billion for goods and transport subsidies, including cooking gas, flour, cooking oil, electricity and toll.
As announced earlier, Kedai Rakyat 1Malaysia will be restructured as KR1M 2.0. As a start, in 2018, 50 outlets will transformed to KR1M 2.0 and will be expanded further to 3,000 outlets within three years.
KR1M 2.0 will provide five basic necessities at low prices, such as rice, sugar, cooking oil, flour and cooking gas. In addition, 50 branded consumer goods will be sold at a lower than the market price.
The government will continue the Standardisation of Prices for Basic Necessities Programme in Sabah and Sarawak with a total allocation of RM80 million.
In addition, the government will develop the Agrobazaar Malaysia with a total allocation of RM20 million to provide market space and agrofood sales centre at a lower price, beginning in Putrajaya.
The Agriculture and AgroBased Industry Ministry will implement programmes through FAMA and LKIM with an allocation of RM50 million. These programmes enable consumers to purchase food products such as fish, vegetables, chickens and eggs at affordable prices.
Effective Jan 1, 2018, the following measures will be implemented:
FIRST, abolish toll collections at Batu Tiga and Sungai Rasau, Selangor;
SECOND, abolish toll collections at Bukit Kayu Hitam, Kedah; and
THIRD, abolish toll collections at Eastern Dispersal Link, Johor.
1MALAYSIA RETIREMENT SCHEME
For those who are self-employed and without fixed income, the government will increase its contribution to 15 per cent subject to a maximum of RM250 annually under the 1Malaysia Retirement Scheme (SP1M) managed by Employees Provident Fund (EPF). The contribution begins from 2018 to 2022.
FOREIGN DOMESTIC HELPER
The government is aware of the high cost incurred in hiring foreign domestic helpers. Currently, the hiring cost of a foreign domestic helper could reach as high as RM12,000 to RM18,000.
To address this issue, the government will review the cost of hiring foreign domestic helpers, with a view of reducing it in the future.
For a start, the government will allow employers to hire foreign domestic helpers from nine selected countries directly without any agents.
Subsequently, employers may apply for foreign domestic helpers’ visa via online from the Immigration Department of
Malaysia with the current levy and processing fees.
HOUSING
The government will continue to intensify efforts to increase home-ownership for the rakyat with an allocation of RM2.2 billion as follows:
FIRST, 17,300 units of People’s
Housing Programme;
SECOND, 3,000 units of People’s Friendly Home under SPNB;
THIRD, 210,000 units of houses under PR1MA with prices RM250,000 and below. For this, RM1.5 billion is allocation for the period of two years;
FOURTH, 25,000 units of 1Malaysia Civil Servants Housing
Programme (PPA1M) will be completed in 2018 while another 128,000 units are at various stages of construction;
FIFTH, 600 units of My Beautiful New Homes (MyBNHomes) scheme for B40 households in Terengganu, Pahang, Melaka, Johor, Sabah and Sarawak, as well as Orang Asli settlements;
SIXTH, 2,000 units under the My Deposit programme to assist down payments as well as the MyHomes programme to enable developers to provide more affordable homes; and
Seventh : A sum of RM200 million is allocated for the maintenance and refurbishment of houses, including the 1Malaysia Maintenance Fund.
To encourage the construction of more affordable homes, the step-up financing scheme introduced by PR1MA will be extended to private housing developers subject to certain criteria.
With regard to abandoned housing projects, stamp duty exemption for loan agreements and letter of consent to transfer, are given to rescuing contractors and original owners of abandoned projects, effective Jan 1, 2018, to Dec 31, 2020.
To promote rental of residential homes, for the first time in 60 years, the government proposes a 50 per cent tax exemption on rental income received by resident individuals not exceeding RM2,000 per month for resident individuals.
This exemption is effective from the year of assessment of 2018 to 2020. The Government will also formulate the Residential Rental Act to protect the landlord and tenant.
HEALTH
To provide quality healthcare services, the government allocates about RM27 billion, encompassing:
FIRST, A sum of RM2.5 billion is allocated for medical supplies, while RM1.6 billion for consumable and medical support items;
SECOND, a sum of RM1.4 billion is allocated for upgrading and maintaining healthcare facilities, medical equipment and ambulances. This includes, the construction
of operation hall using a modular approach in three hospitals in Muar, Banting and Balik Pulau;
THIRD, upgrade cardiology and cardiothoracic services at Sultanah Nur Zahirah Hospital in Kuala Terengganu and Sultanah Bahiyah Hospital in Alor Star;
FOURTH, a sum of RM100 million is allocated to upgrade hospitals and clinics, including wiring systems;
FIFTH, a total of RM50 million is allocated for haemodialysis assistance with a subsidy of RM100 from the overall treatment cost of RM110 per session.
An additional of RM40 million is allocated for the Medical Aid Fund. Both incentives are for the underprivileged;
SIXTH, a sum of RM10 million is allocated for the treatment of increasing cases of rare diseases and RM30 million is provided for Healthy Community Empowers the Nation programme to create awareness about non-communicable diseases in 10,000 locations nationwide; and
SEVENTH, : A sum of RM50 million is allocated for Voluntary Health Insurance Scheme to enhance the health sector.
... the government proposes a 50 per cent tax exemption on rental income received by resident individuals not exceeding RM2,000 per month for resident individuals.
Furthermore, the government will build new hospitals and wards, including:
FIRST, two blocks of women and children wards at Tengku Ampuan Afzan Hospital and Putrajaya Hospital with a capacity of 300 beds each, with a cost of RM1 billion;
SECOND, cancer centre at Sungai Petani at a cost of RM500 million with a capacity of 200 beds;
THIRD, a block dedicated for a specialist clinic as well as a new ward at Pulau Pinang Hospital with a capacity of 300 beds with a cost of RM500 million; and
FOURTH, construction of international forensic medical service centre at Kuala Lumpur Hospital with a cost of RM380 million.
GOODS AND SERVICES TAX
The government will further improve the implementation of Goods and Services Tax (GST), through the following measures:
FIRST, services provided by local authorities will not be subjected to GST, effective 1 April 2018 or 1
October 2018, according to the choice of local authorities;
SECOND, reading materials comprising all types of magazines and comics will be zero-rated, effective 1 January 2018, to streamline the GST treatment;
THIRD, cruise operators are given relief from paying GST on handling services provided by port operators in Malaysia. This relief will be effective from 1 January 2018 to 31 December 2020; and
FOURTH, construction of school buildings and houses of worship, funded through donations are given GST relief. It applies for construction contracts signed on or after 1 April 2017.
The GST should not be politicised. In fact, the GST saved the economy this year, where without the RM41 billion collected we cannot imagine how the nation can cater for the needs of the rakyat.
Until today, the opposition seem to be divided with regard to their views on GST system with some accepting GST based on zero-rate and the latest there are some who want to return back to the sales and services tax (SST). Futhermore…
FIFTH, imports of oil and gasrelated equipment under a lease agreement, supplied to customers in Malaysia by companies in Designated Areas, namely, Labuan, Langkawi and Tioman are given GST relief effective from 1 January 2018;
SIXTH, imports of big ticket items such as aircraft and ships by airline and shipping companies registered in Malaysia are given GST relief.
GST relief are also given to companies in the oil and gas industry, importing oil rigs or floating structures, effective from 1 January 2018; and
SEVENTH, the management and maintenance services of stratified residential buildings supplied by the Joint Management Body (JMB) and management corporations are not subjected to GST. This treatment is expanded to cover the management and maintenance services provided by housing developers, effective from 1 January 2018.
SIXTH THRUST: FORTIFYING THE FOURTH INDUSTRIAL REVOLUTION AND DIGITAL ECONOMY
INDUSTRIAL REVOLUTION 4.0
In line with the emerging IR 4.0 and the era of digital economy, the Government will implement the Malaysia Digital Policy.
As such, in order to support the IR 4.0 business and investment activities, the Government will provide a matching grant worth RM245 million under the Domestic Investment Strategic Fund to upgrade the Smart Manufacturing facilities.
Furthermore, futurise centre in Cyberjaya will be strengthened as a one-stop centre for corporate companies and universities to develop prototype products and elevate innovation.
The Government will provide tax incentives as follows:
FIRST, extend the incentive period for Accelerated Capital Allowance of 200% on automation
equipment from year of assessment 2018 to year of assessment 2020;
SECOND, extend the incentive period for Accelerated Capital Allowance of 200% for manufacturing and manufacturing-related services sectors; and
THIRD, capital Allowance for ICT equipment, which includes spending on computer software development, is claimable for the period of four years beginning year of assessment 2018 to 2020, including for SMEs.
SUSTAINABLE DEVELOPMENT
While we are progressing towards modernisation, we must preserve the sustainability of our environment for future generation.
My deepest condolences for the loss of lives in the Tanjung Bungah Pulau Pinang landslide tragedy, which has claimed 11 lives.
Our friend, the Honourable DAP Member of Parliament, wrote a poignant piece on his Twitter account.
What a touching piece by our Honourable Kepong Member of Parliament himself.
200. To ensure a sustainable development, the following measures will be implemented:
FIRST, provide a sum of RM5 billion under the Green Technology Financing Scheme to promote investment in green technology industry;
SECOND, implement the NonRevenue Water Programme with a cost of RM1.4 billion to reduce the average loss of water;
THIRD, construct the Off-River Storage with a cost of RM1.3 billion as an alternative water resources; and
FOURTH, provide a total of RM517 million for flood mitigation programmes.
DIGITAL FREE TRADE ZONE
Malaysia will be the first in the world outside China to establish a Digital Free Trade Zone (DFTZ) which comprises e-Fulfilment Hub, Satellite Services Hub and e-Service Platform to stimulate growth in electronic trade. DFTZ will transform KLIA as the regional gateway.
The first phase of DFTZ aims for 1,500 SMEs to participate in digital economy and is expected to attract RM700 million worth of investment and create 2,500 job opportunities. For this, the Government:
FIRST, provides a sum of RM83.5 million to construct infrastructure for the first phase of DFTZ in Aeropolis, KLIA; and
SECOND, increases the de minimis or minimum value for imports from RM500 to RM800 to establish Malaysia as the regional e-commerce hub.
REGULATORY SANDBOX
The government will create a conducive ecosystem to gain benefits from innovation, particularly ideas from local start-ups.
The government will expand regulatory sandbox approach to facilitate companies to test their new innovative ideas and business model which will be implemented by all related regulators.
SEVENTH THRUST: ENHANCING EFFICIENCY AND DELIVERY OF GOVERNMENT-LINKED COMPANIES AND PUBLIC SERVICE
Enhance efficiency and delivery of Government-linked Companies (GLCs) and public service.
EMPLOYEES IN GOVERNMENTLINKED COMPANIES
In line with the development philosophy of growth with equity, it is Malaysia’s desire to achieve strong economic growth and wealth be equally distributed among the rakyat.
In this regard, the GLCs will lead and be an example to the corporate sector. As such, every GLCs will be given Key Performance Indicator (KPI) to increase employees compensation in line with productivity growth. This includes:
FIRST, GLCs will increase their profit sharing with their employees through gradual payment of salaries and allowances;
SECOND, introducing flexible benefits to increase disposable income by substituting annual and medical leaves for cash;
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THIRD, improving further flexible working arrangements to promote work-life balance through compressed work week, flexible and part-time working
hours;
FOURTH, introduce leaves for
umrah;
FIFTH, provide childcare centre in GLC’s main offices as well as introduce shorter working hours for pregnant working women; and
SIXTH, increase investment in training, particularly conduct courses on digital skills to workers as well as provide children’s education assistance.
PRIORITISE THE WELFARE OF SENIOR CITIZENS, PEOPLE WITH DISABILITIES AND CHILDREN
The government will provide an allocation of RM1.7 billion for the welfare of senior citizens, PWDs and children. This includes:
FIRST, Increasing allowance for senior citizens by RM50 to RM350 per month with an allocation of RM603 million. This will benefit almost 144,000 senior citizens; and
SECOND, Increasing allowance for working and unemployed PWDs as well as care takers of PWDs by RM50 per month with an allocation of RM100 million. This will benefit more than 163,000 individuals.
Furthermore, to protect children, particularly from sexual crimes, the Government has successfully set up the Special Criminal Court on Sexual Crimes against Children, the first in Southeast Asia. An additional three courts will be established in 2018.
PUBLIC SECTOR HOME FINANCING BOARD (LPPSA)
From 1 January 2018, the Public Sector Home Financing Board (LPPSA) will implement measures to enable public servants to own their dream homes. Among the measures include:
FIRST, allow financing by LPPSA to construct property on waqf land;
SECOND, include legal fee-related to sales and purchase agreement as part of financing by LPPSA;
THIRD,allow LPPSA joint-loan for husband and wife or children with a condition that all applicants must be public servants; and
FOURTH, allow joint-home financing between husband and wife or children, with a condition at least one of the applicants is a public servant.
The non-public servant needs to secure loans from financial institutions or agencies that provide financing facilities which agrees to be the second mortgage holder.
EIGHTH THRUST: BALANCING BETWEEN THE PAR EXCELLENCE OF WORLDLY AND HEREAFTER
The future is uncertain. Nevertheless, Allah SWT favours those who continuously work hard, plan their future for the benefit of country and society as a whole.
Based on Surah Al-A’raf verse 96, Allah SWT bestows His blessings and grace upon those who believe and fear Allah.
herefore, the Government is targeting Malaysia:
FIRST, to become a High-Income Advanced Economy in 2020;
SECOND, to record RM2 trillion of economy and trade value by 2025;
THIRD, to gain and benefit from IR 4.0 by 2030;
FOURTH, to have a more competitive workforce with nearly zero defects by 2040; and
FIFTH,to be ranked among the top 20 advanced countries in the world.
SOCIO-ECONOMIC RESEARCH UNIT
The fact remains families are the most important institution in developing values and humanity as social unity starts with harmonious and happy family.
For this, the Government will establish Socio-economic Research Institute (SERI) under Prime Minister’s Department and enhance the UKM Institute of Ethnic Studies (KITAUKM) as a national institution. An appropriate allocation will be provided by the Government.
SERI will review and evaluate the effectiveness of policies, and implementation of programmes and development projects. Meanwhile, KITA will coordinate studies on national socioeconomics education and establish the national social development index.
As an analogy, while the Economic Planning Unit (EPU) plays an important role in formulating economic policies and the Implementation and Coordination Unit (ICU) as the implementation arm of programmes and projects, the SERI and KITA will be the main agency which covers the aspects of spiritual, ethical and universal pure values.
The Government always appreciate the role of NGOs and will continue to cooperate with them in addressing social challenges. Emphasis will be given to family institutions, which is the smallest yet most important nucleus in the development and wellbeing of our society.
PUBLIC SERVANTS
As I mentioned in the 15th Majlis Amanat Perdana Perkhidmatan Awam (MAPPA) early this month, I have a few announcements for the
1.6 million public servants.
As a token of appreciation for the commendable services by the public servants, I am pleased to announce:
FIRST, introduce second timebased promotion to supporting staff after 13 years from the first promotion;
SECOND, provide benefit to public servants who retire on medical reasons similar to those who retires at compulsory age;
THIRD, allow Cash Award in lieu of Accumulated Leave (GCR) of more than 150 days to be taken during the retirement year;
FOURTH, increase special leaves for education officers from 7 to 10 days a year;
FIFTH, Provide unrecorded leaves to public servants up to 7 days throughout their service for the purpose of umrah;
SIXTH, introduce new working hour from 9.00am to 6.00pm to provide further flexibility to public servants;
SEVENTH, provide Flexible Working Hour one day a week for Grade UD54 and above Medical Specialists who have served a minimum of four years and meet certain requirements;
EIGHTH,allow working women in their five month onwards of pregnancy to leave work an hour earlier.
To accompany them, husbands are also allowed to go home an hour earlier with a allowed to leave work an hour earlier with a condition that
the couple are working within the same location;
NINTH, Increase total maternity leave from 300 to 360 days throughout service subject to a maximum of 90 days a year;
TENTH, Encourage life-long learning among public servants through in-house Masters and PhD programmes;
ELEVENTH, Set minimum pension of RM1,000 per month, benefitting more than 50,000 retirees with at least 25 years of service; and
TWELFTH, Extend the medical facilities to parents of retirees.
All the above measures will take effect from 1 January 2018.
NEIGHBOURHOOD AND COMMUNITY
To appreciate the contribution of village heads and tok batins, the Government will provide a one-off special payment of RM1,500, benefitting 9,800 people. Of which, RM1,000 will be paid in January 2018, while the balance during Hari Raya Aidilfitri.
To create safe and peaceful environment in the neighbourhood areas, the Government will continue to provide 1Malaysia People Community Grant up to RM10,000 to registered resident associations to purchase security equipment, clean and maintain neighbourhood areas with a total allocation of RM40 million.
In addition, RM40 million is allocated to GiatMara to implement the first phase of community training programmes, involving 50 PPR.
UPHOLD THE GREATNESS AND INTEGRITY OF ISLAM
My deepest condolences for the loss of 23 lives in the Darul Quran Ittifaqiyah Tahfiz Centre tragedy.
In this regard, the Government will allocate a total of RM50 million to GiatMara for upgrading and maintaining wiring system in all registered Tahfiz schools nationwide.
Furthermore, GiatMara skills training scheme will be introduced to tahfiz school students.
Likewise, a total of RM588 million is allocated as monthly allowance for imam, bilal, KAFA and takmir teachers. As a token of appreciation including tok siak, the Government would like to announce…
A one-off payment amounting to RM1,500, will be given to them of which, RM1,000 will be paid in January 2018, while the balance during Hari Raya Aidilfitri. This will benefit more than 65,000 individuals with an allocation of almost RM100 million.
CLOSING
May Allah SWT bless this 2018 Budget presentation.
What is the point of being wealthy but weak in soul.
The Government aspires, not only as a nation with physical strengths but rich in soul and character i.e. par excellence in worldly and hereafter.
After months of hard work, involving ministries, agencies, private sector, NGOs, youth and professionals, and most importantly, all segments of the society have contributed through various platforms and channels in crafting this important document.
Thus, this Budget is the most inclusive that has ever been tabled.
This Budget encapsulates all the three important aspects Dho’ruriyat, Haajiyat and Tahsiniyat in safeguarding rakyat’s welfare and to prosper the nation.
This Budget that has never been crafted so well, even during the last 22 years or the past 60 years of our own nation, and marked in history, making this Budget the Mother of All Budgets.
Indeed, this Budget is the collection of various premises which form the basis of a comprehensive Budget, taking into account the needs of all levels of society.
With this, the Budget dispels all doubts as propagated by the Opposition.
In fact, the Opposition is surrounded by misconceptions and is the real actor. There is no certainty in political leadership, how can they be trusted to provide a sound economic leadership.
All these while, they have been making senseless propositions including abolishing GST and reducing taxes. All these are baseless claims.
All praises be to Allah, for His blessings on Government’s efforts.
This is the right time to acknowledge public servants who have been loyal and provide efficient and effective public service delivery to the rakyat, hence, I am pleased to announce that…
A special payment of RM1,500 be given to all public servants.
The payment will be made twice, of which RM1,000 will be paid in early January 2018 while the balance during Hari Raya Aidilfitri.
Meanwhile, the Government will provide a special payment of RM750 to Government retirees, of which RM500 to be paid in January 2018 while the balance during Hari Raya Aidilfitri.
I trust the rakyat is wise enough to differentiate between truths and lies.
More importantly, when the rakyat choose wisely it paves the path for Malaysia to flourish extensively.
When the rakyat and the Government are united, then the country emerges as a great nation.
We have to plan strategically in charting the course of the nation.
This can only be achieved through great teamwork and friendship. I am grateful for being blessed with a loyal friend… Deputy Prime Minister, Datuk Seri Dr. Ahmad Zahid Hamidi.
This include all the support from Members of the Cabinet, Leaders of Component Parties in steering the nation.
Come what may, we remain steadfast with our commitment.
Let’s together ensure a big victory for Barisan Nasional in the 14th General Election.
O Allah, to You, we pray and submit. God bless Malaysia.
Mr. Speaker Sir, I beg to propose.
This Budget that has never been crafted so well, even during the last 22 years or the past 60 years of our own nation, and marked in history, making this Budget the Mother of All Budgets.