Sheda Kuching chief hopes national budget address country’s debts
KUCHING: Sarawakbusinessmen hope to see the federal government make reducing and repaying debts and liabilities its focus in the National Budget 2019 to be tabled by Finance Minister Lim Guan Eng on Nov 2.
For one, Sarawak Housing Estates Developers Association (Sheda) Kuching branch chairman Sim Kiang Chiok said he personally expects this move following the change of federal government from Barisan Nasional (BN) to Pakatan Harapan (PH) after the May 9, 2018 general election.
“These (debts and liabilities) have created much anxiety among the market players because foreign investment is reducing and the demand for Malaysian Ringgit is lower, weakening its exchange rates and creating imported inflation,” Sim said when asked to comment on what people in general expect from the announcement of the National Budget 2019.
“The new government’s economic ideology is not clearly spelt out unlike the Labour Party or the Conservative Party in the United Kingdom or Australia. The present Prime Minister (Dr Mahathir) was from the previous government political coalition (BN) and we can expect similar economic policy and even the old unpopular policy reinforced,” he claimed.
As a developer in Sarawak, Sim said he expected the federal budget to affect the way developers do business even though land, utilities and some building materials are sourced locally. It is the developers’ wish to see reduction in construction cost and ease in selling houses, he pointed out.
“However in the run-up to the budget, our Prime Minister has in the mass media said that new taxes will be introduced and also there will be sales of assets and land apart from leasing of government assets and buildings.
“Any increase in the present tax such as corporate tax, stamp duties, Real Property Gain Tax, foreign buyer stamp duties will increase compliance cost and reduce demand of properties. New taxes speculated such as Inheritance Tax, Capital Gain Tax will also reduce competitiveness of our country for foreign investors and thus indirectly affecting demand for properties in our country,” Sim cautioned.
“Sales of assets and land will increase supply of available land for development and will ease pressure from demand. The government has to be careful when these land and assets are sold so as not to affect the areas where there is oversupply of properties. Leasing of government buildings will also increase space for rental and will affect the rental yield,” he added.
“Our wish is that there is reduction in cost, increase in the ease of doing business in Malaysia. Therefore, the PH government should be more focussed as they have promised to reduce corruption and the saving from this leakage will be sufficient to maintain an expansionary budget where momentum of growth of our economy can be maintained. They should keep their promise to do more for less through the reduction in corruption. Reduce taxes, ease up on regulations and law to ease up on compliance cost, increase the competitiveness of our country,” Sim suggested.
“On-going infrastructure projects such as the Pan Borneo Highway, repair of dilapidated schools, hospitals, airports must be continued to bring progress and economic growth to Sarawak to bring it to be on par with Malaya,” Sim stressed.
On incentives the PH government can provide, Sim said the present challenge for developers in Malaysia is the ease of getting finance for purchase of houses.
He pointed out that Bank Negara’s policy of lending based on proven income had increased the unsold stock, reduced new launches even though the demand for houses were still high especially from first-time home buyers.
“Banks should consider future increment in income, second job income, longer lending period, staggered repayment where initial five to 10-year loan is only to repay the interest towards spurring the economy,” he said.
On industries to be promoted, Sim said there are new ecommerce trends and strategies that businessmen cannot ignore and the Sarawak government is investing heavily in the internet infrastructure.
“The federal government can complement us by ensuring the major telecommunication companies in Malaysia will upgrade the capacity and speed accordingly,” he added.
Sim said the travel and tourism sector in Sarawak also needs to be promoted by increasing direct flights to major cities in Asia.
“Provide incentives for local tour companies that promote local attractions to foreign tourists,” he suggested.