Next year is going to be tough and this is what everyone has talked about since Prime Minister Najib Razak announced the Goods and Services Tax (GST) when he tabled the 2014 Budget last year.
We also saw a cutback on sugar subsidy, a fuel price hike and an increase in BR1M cash handouts last year.
This year, as Malaysians prepare to face the impending GST implementation in April next year, the government announced a 20 sen hike for RON95 and diesel fuel putting them at RM2.30 and RM2.20 per litre respectively.
But Najib, who is also Finance Minister, has indicated that this budget would aim to ease the people’s burden – a ‘pro-rakyat’ budget – with BR1M becoming the primary tool to manage these concerns.
“The government is on track to meet fiscal deficit targets, i.e. deficit reduction to 3.5 per cent by end (of) 2014 and 3 per cent by end (of) 2015,” the PM’s Office tweeted today.
This year’s budget will be the last under the 10th Malaysia Plan.
One minister has assured Malaysians that there isn’t anything to panic about as they would take care of the needs of the rakyat.
‘Stay positive and wait for Budget 2015,” Domestic Trade, Cooperatives and Consumerism Minister Hasan Malek said recently, referring to the recent fuel price hike as ‘minimal’.
Let’s see how this goes:
TOTAL BUDGET: RM273.9bil
Operating Budget: RM223.4bil
Development Budget: RM50.5bil
3.50pm: Prime Minister Najib Razak enters Parliament. (Photo: Berita Harian Online)
PM Najib Razak has begun tabling the 2015 Malaysian Budget.
Najib: #Bajet2015 to introduce overarching Malaysian National Development Strategy (MyNDS).
Najib: #Bajet2015 is capstone to 10th Malaysia Plan; 11th Malaysia Plan will focus on bringing Malaysia into high-income nation status.
Najib: “This will be an economy based on the people’s needs. It will be known as “Ekonomi Keperluan Rakyat”, or EKR … not PKR” *laughter in Parliament*
Najib: Total budget allocation this year is RM273.9 bil, RM9.8 bil more than last year
2015 will see several infrastructure projects initiated:
- Sungai Besi – Ulu Klang Highway
- East Coast Highway from Taiping to Banting
- Damansara – Shah Alam Highway
- KL Outer Ring Highway – East Link
- Upgrades to East Coast rail system, running from Gemas – Mentakab, Jerantut – Sungai Yu, and Gua Musang – Tumpat
Najib: High-speed Broadband penetration into high-impact economic areas will continue to be expanded into all state capital cities and selected municipalities.
RM200 million allocated to found MyCreative Ventures, the Federal Government’s investment arm specifically for emerging players in the creative industry.
RM100 million set aside to facilitate a New Digital Content Fund, under the auspices of the Malaysian Communications and Multimedia Commission, to encourage entrepreneurship in the field.
Najib: GST revenue is estimated at RM23.2 billion. “ But as a caring government, we have exempted several items from GST totalling RM3.8 bil. After deducting RM13.8 bio and RM3.8 bil, from that revenue, the government is left with a balance of RM5.6bil.”
From this RM4.9 billion will be channelled back to the rakyat.
Najib: RON95 Petrol, diesel and Liquified Petroleum Gas (LPG) to be exempted from GST.
Federal Government to release ‘Shopper’s Guide’ for consumers to make price comparisons for products before and after GST.
First 300 units of electricity to be exempt from GST. This usage rate translates into an estimated 70% of households not needing to pay GST for their electricity.
Fruits, white bread, books and 2,900 medicine brands will also be exempt from GST.
— Mohd Najib Tun Razak (@NajibRazak) October 10, 2014
Najib: Personal income tax to be reduced by up to three percentage points. Tax exemption to be given to low-income households earning RM4,000 a month or less.
Najib: RM800 million has been allocated to develop Malaysia’s education infrastructure:
- RM450 million for national schools;
- RM50 million for Chinese vernacular schools;
- RM50 million for Tamil vernacular schools;
- RM50 million for fully-residential boarding schools;
- RM50 million for religious schools; and
- RM50 million for MARA colleges.
PTPTN loan holders will receive a 10% rebate on their loans if they consistently pay their instalments for 12 months in a row, up until the end of 2015.
Najib: RM320 million allocated for youth development programmes; National Service Programme to be reviewed, revamped and improved.
Introdutction of Unity Camp programme for youth development.
MyCorps programme to facilitate youth volunteer initiatives on a global scale. This is to augment the existing 1Malaysia for Youth (1M4U) programme doing similar activities nationally.
RM100 million allocated to the 1Malaysia Youth City project, with on-site presence to be located in the Peninsula, Sabah and Sarawak.
Government to provide a guarantee of a 10% loan under the Youth Housing Scheme, which would allow full financing on homes, including the cost of insurance.
Borrowers may withdraw from their EPF Account 2 to top up their monthly installment and related costs – BUT only for the first 20,000 to take the opportunity.
RM30 million allocated to training and technical assistance for ethnic Indian youth from lower income backgrounds.
Najib: RM2.26 billion allocated for women’s social and professional development.
Introduction of ‘Women Career Comeback’ under TalentCorp and 1Malaysia Support for Housewife programmes to entice housewives to re-enter the national workforce.
RM30 million to facilitate and encourage entrpreneurship among women from the ethnic Indian community.
Better child care leave for women with step children, adopted children, foster children and children with disabilities.
More child care centres at workplaces.
In another major development, the Nobel Peace Prize this year has been awarded to India’s Kailash Satyarthi and Pakistan’s Malala Yousafzay!
— The Nobel Prize (@NobelPrize) October 10, 2014
Najib: Corporate tax rate in 2016 to go down from 25% to 24%. Corporate tax rates for Small and Medium Industries to go from 20% to 19%.
Federal subsidies and cash aid to be reduced by 7%, from RM40.6 billion this year to RM37.7 billion next year.
Youth Housing: RM200 to be given monthly to homebuyers aged 25 to 40 with a monthly income of less than RM10,000 a month.
PR1MA: Monthly household income for eligibility for PR1MA housing purchase raised to RM10,000. Federal Government to build 80,000 units of PR1MA housing at a cost of RM1.3 billion.
Healthcare: tax relief increased to RM6,000 a year for those needing to treat serious illnesses, including cancer, heart disease, and kidney failure.
30 doctors to be stationed at 30 new 1Malaysia clinics.
Najib: RM1.2 billion in financial aid allocated for Malaysia’s poor, senior citizens, the disabled, and children.
Raise in tax exemption for parents of disabled children from RM5,000 to RM6,000.
Najib: RM500 million allocated to upgrade government quarters and facilities in 126 locations.
Transportation: 30% toll discount for those travelling daily outside KL.
Toll discounts to be applied to the following routes: Rawang to KL, Klang to KL, and Seremban to KL.
Bantuan Rakyat 1Malaysia (BR1M) cash aid to increase from RM650 to RM950 for households earning RM3000 a month and below.
BR1M cash aid for households earning RM3,001 to RM4,000 month to increase from RM450 to RM750.
Single citizens aged 21 and above earning RM2,000 or less a month to receive RM350 in BR1M aid.
BR1M cash payments to be distributed three times per year.
Najib: Civil service bonus to be disbursed in January: half-month bonus for all civil servants earning a minimum of RM500 a month.
Civil service pensioners to receive a special cash aid of RM250.
Download the full text of Prime Minister Najib’s Budget speech here.