Budget 2017: As expected, a budget full of goodies


KUALA LUMPUR: Prime Minister Najib Razak presented the National Budget 2017 in his capacity as finance minister at the Dewan Rakyat today.

Below are the highlights:

Considerations for women, children and Islam

• Tax relief of RM1,000 for breast-feeding equipment to support working women.

• Tax relief up to RM1,000 for individual tax-payers who enrol their children age 6 and below into registered nurseries and pre-school.

• RM30 million allocated for free mammogram screening and HPV vaccination for women.

• Permata programme involving 50,000 children is allocated RM85 million.

– Establishment of the top STEM Talent Excellence Centre at the Academy of Sciences Malaysia.

• Increase of monthly allowance for Imam from RM750 to RM850.

• Allocation of RM3 million to coordinate tahfiz education through National Tahfiz Education Policy.

Security forces

• RM55 million to be provided to Special Insurgency Incentive Payment to veteran members of the armed forces who are yet to receive their special incentives.

• Out of the RM15.1 billion allocated to Ministry of Defence, RM1.8 billion is for asset defence maintenance; RM323 million to enhance effectiveness of ESSZone operations including personal deployment at the eastern border of Sabah.

• Ministry of Home Affairs allocated RM12.8 billion which includes a sum of RM8.7 billion for the Royal Malaysia Police.

• RM80 million provided to over 200,000 Rela members.

Empowering Malays and Bumiputeras 

• RM100 million to SME banks to increase opportunities for Bumiputera entrepreneurs.

• RM300 million to Tekun to assist small-scale entrepreneurs.

• RM200 million to Perbadanan Usahawan Nasional Berhad.

• RM120 million to Mara for various entrepreneurship programmes.

• Facilitation fund of RM500 million to Teraju to assist Bumiputra companies in expanding their businesses or start a new one.

Needs of Chinese and Indians addressed

• RM50 million allocated for the development of Chinese New Villages; RM20 million for micro-credit loans under the supervision of Malaysian Chinese Women Entrepreneurs Foundation, etc.

• RM50 million for programmes to increases capacity and income as well as RM150 million for business financing programmes through Tekun and Amanah Ikhtiar Malaysia (AIM).

• RM10 million allocation to expand pre-school programme to 50 national-type Tamil schools.

Orang Asli and disabled not left out

• RM535 allocated for persons with disabilities. This will also come in the form of employee allowance and training for disabled children.

• Increase of allowance of Orang Asli village heads, chairmen of Village Development and Security Committee from RM800 to RM900.

• For Native Customary Rights, RM20 million allocated for land survey in Sabah and RM30 million in Sarawak.

Incentives to encourage repayment of PTPTN loans

– 15 per cent discount on outstanding debt for full settlement.

– 10 per cent discount for payment of at least 50 per cent of outstanding debts.

– 10 per cent discount for repayment through salary deduction or direct debit. This will come into effect on Oct 22, 2016 to Dec 2017.

• RM4.3 billion will be allocated for scholarships.

• Government will replace book vouchers with student debit cards worth RM250, benefiting 1.3 million students.

• RM7.4 billion allocated for 20 public universities to ensure national higher education is on a par with global standards.

Teachers to receive free tablets

• Allocation of RM600 million to Special Fund for Improvement and Maintenance of Schools i.e. RM50 million for Chinese schools, RM50 million for Tamil schools and RM50 million for religious schools and RM50 million for registered Sekolah Pondok.

• Malaysian Communications and Multimedia Commission (MCMC) will provide 430,000 teachers with free tablets to assist in their teaching. RM340 million will be allocated for this.

• RM570 million to reconstruct 120 destitute schools. RM90 million to boost English language proficiency in school through Cambridge English, Dual Language and Highly-Immersive Programmes.

• RM200 million from the Working Capital Guarantee Scheme Fund specifically allocated to start-ups.

• RM75 million allocated for programmes under the SME Master Plan. Guarantee up to 15 billion is provided under various schemes of Syarikat Jaminan Pembiayaan Perniagaan to be extended until 2025.

Government to boost Internet connectivity 

• MCMC will provide RM1 billion to ensure coverage and quality of broadband nationwide reaches up to 20MB per second.

• Initiative for Ethernet broadband services in public universities to be increased to a maximum 100GB per second.

E-visas to more countries to attract tourists

• Extension of e-visa to countries in the Balkans and South Asia region in order to achieve a target of 32 million tourist arrivals.

• Government will promote Malaysia through Visiting [email protected] Year Campaign.

• Increase in tax deduction from RM500,000 to RM700,000 to encourage sponsorship by private sector in local and foreign arts, culture and heritage shows.

• RM400 million allocated for tourism for clean air and eco-tourism initiatives.

• RM29 million allocated for the construction of two Overhead Motorcycle Ramps at the Federal Highway in Selangor to mitigate floods in motorcycle lanes and ensure safety of riders.

RM60 million for taxi drivers’ welfare

• To assist among others BR1M recipients, the government will encourage their participation as ride-sharing drivers such as Uber drivers.

• Introduction of Social Security Organisation (Socso) Scheme to individual taxi drivers with monthly income up to RM3,000.

• Grant of RM5,000 announced to purchase new vehicles and offer individual taxi permits. This will benefit 12,000 qualified taxi drivers who have ended their leasing contract with taxi companies.

RM25 billion for healthcare

• National Community Health Empowerment programme will be expanded to prevent and control diseases such as dengue and Zika. RM80 million will be allocated for this.

• To reduce overcrowding in public hospitals, the government will cooperate with the private sector or NGOs to operate non-profit charitable hospitals based on government hospital rates. RM20 million will be allocated in the form of loans for hospital equipment purchases.

• RM25 billion allocated for healthcare i.e. new hospitals and clinics will be built and upgraded in Perlis, Kuching, Mukah, Jempol, Muar and Johor Bahru; RM4 billion for supply for drugs, consumables, vaccines and reagents to all government hospitals and health facilities.

RM1.2 billion for sports development

• RM450 million out of this sum is for hosting the 29th SEA Games and the 9th Para Asean Games in 2017.

– RM54 million allocated to continue sports development programmes including athlete preparation programmes and paralympic athlete preparation programmes.

• RM100 million allocated to build four more Urban Transformation Centres (UTC) in Negeri Sembilan, Perlis, Penang and Selangor as well as three more Rural Transformation Centres (RTC) in Selangor, Sabah and Sarawak.

• The purchase of reading materials, computers and sports equipment will be combined as the lifestyle tax relief up to RM2,500 per year.

Initiatives for first home buyers

• To enhance first home buyers’ affordability, government will introduce the following:

– through NBOS (National Blue Ocean Strategy), government to provide its vacant lands at strategic locations to GLCs and Perumahan Rakyat 1Malaysia (PR1MA) to build more than 30,000 houses, the selling price of which will be between RM150,000 and RM300,000 that is lower than market price.

– 10,000 houses in urban areas will be built for rental to eligible youth with permanent jobs including young graduates entering the labour market.

– government to subsidise up to RM20,000 per unit to build 5,000 units of People’s-Friendly Home (PMR)

• To enhance graduate employability, RM50 million is allocated to extend the 1Malaysia Training Scheme programme by GLCs to 20,000 graduates in 2017 compared to 15,000 graduates in 2016.

• Double tax deduction given on expenses incurred by private companies to provide structured internship programmes for students pursuing undergraduate degrees, diploma, Malaysian Skills Certificate Level 3 and above under the TVET programme.

RM6.8 billion allocated for BR1M

• “BR1M is not animal feed neither bait. Rather it is sincere assistance from the government as we always prioritise the rakyat’s needs,” Najib said.

– For households in the e-Kasih database with a monthly income below than RM3,000, BR1M will be increased to RM1,200 from RM1,050 and RM1,000;

– For households earning between RM3,000 and RM4,000, BR1M will be increased from RM800 to RM900;

– For single individuals earning below RM2,000, BR1M  will be increased from RM400 to RM450.

– At the same time, the Bereavement Scheme will be continued  with the RM1,000 compensation given to the next of kin of BR1M  recipients for households and the elderly category. Overall, the  BR1M programme will benefit 7 million recipients with an  allocation of RM6.8 billion.

• Nearly RM10 billion allocated for subsidies comprising fuel including cooking gas, toll charges and public transport.

• For the rakyat’s wellbeing, the government remains committed to implement rakyat-centric projects as well as programmes in urban and rural areas. Below are some examples:

– to brighten villages at night: 97,000 street lights and 3,000 LED lights will be installed at crossroads. This would involve 7500 villages nationwide including Sabah and Sarawak.

– to enhance connectivity of villages, towns and cities: 616 km of village roads and bridges will be built and upgraded with an allocation of RM1.2 billion.

– to maintain state roads RM4.6 billion is allocated to all states under the Malaysian Road Records Information System (MARRIS).

– allocation of RM350 million to build and refurbish 17,000 units of destitute and dilapidated houses in remote villages and Orang Asli settlements.

• Budget 2017 is not to benefit certain groups but is formulated and re-engineered to be inclusive particularly for the wellbeing of the rakyat.

Slew of goodies for civil servants

• To appreciate the contribution of civil servants, Najib announced the following:

– fully-paid study leave with scholarship to Support Group that is currently limited to management and professional groups

– quarantine leave up to five days without record to civil servants whose children are ill and quarantined

– Computer Loan Facility extended for the purchase of smartphones. Public servants can utilise this once every three years limited to RM5,000

– motorcycle loan facility increased from RM5,000 to RM10,000

– civil servants housing loans increased to RM200,000 and RM750,000 from RM120,000 and RM600,000 respectively.

– to complete 30,000 units of Perumahan Penjawat Awam 1Malaysia with selling price between RM90,000 and RM300,000 which is 20 per cent below market price.

– to extend the contract of service and contract for service officers that are expiring by year-end for at least one year.

– to address the issues of specialist doctors exiting and promotion delays, Grade 56 introduced between Grade 54 and JUSA C for medical and dental specialists.

– government to appoint the first group of doctors, dentists and pharmacists on contract latest by Dec 2016 due to constraints in permanent posts. In other words, nearly 2,600 doctors without housemanship will not serve on contract.

• Malaysia’s economy to grow 4-5 per cent in 2017, led by manufacturing at 4.1 per cent; construction at 8.3 per cent; and services at 5.7 per cent.

• Special assistance of RM500 to civil servants and RM250 special payment for government retirees.

GST rate to stay

• GST collection is expected to increase by 1.82 per cent to RM40 billion in 2017 from RM38.5 billion in 2016.

• Najib stressed the public should not believe the grapevine regarding the increase in GST rates: “That is just hearsay.”

• In addition, the government is expected to achieve a fiscal deficit target of 3 per cent of GDP in 2017 compared to 3.1 per cent this year.

• 2017 revenue collection to expand at around 3 per cent to RM219.7 billion and government is expected to achieve the fiscal deficit target of 3 per cent of the GDP.

• The securities sector is allocated RM5.3 billion and general administration, more than RM2.5 billion. Contingencies will be allocated RM2 billion.

• Under the Development Expenditure, the economics sector will receive the highest share of RM25.9 billion, followed by the social sector with RM12.2 billion.

• RM103.9 billion is allocated for Fixed Charges and Grants. RM691 million is allocated for Purchase and Assets and RM816.6 million for other expenditures.

• The total allocation for Budget 2017 is RM260.8 billion and is an increase of 3.4 per cent from Budget 2016.