Prime Minister Datuk Seri Najib Tun Razak has proposed an allocation of RM280.25bil for Budget 2018. The budget for 2017 is RM260.8 billion. Budget 2018 was formulated in line with the 11MP and this is the third Budget under the Plan.
Najib, who is also Finance Minister, arrived at the Parliament building at 3.10pm, before making his way to the Dewan Rakyat, before starting his speech at 3.35pm. This is the ninth budget presentation by Najib after he became Prime Minister in April 2009.
Here are the main points of his speech:
– A total of RM280.25bil has been allocated for Budget 2018, an increase of RM19.45bil over the 2017 budget allocation of RM260.8bil.
– Malaysia’s income per capita is expected to rise to RM42,777 by 2018, median monthly income in the country has risen from RM4,585 in 2014 to RM5,288 in 2016.
– The Budget 2018 theme is: Prosper with Inclusive Economy, Balancing duniawi (worldly) and ukhrawi (other-worldly) excellence to better the lives of the rakyat towards #TN50 aspirations.
– Najib said the federal government’s revenue collection for 2018 was expected to record RM239.86 billion.
– Budget 2018 has eight core thrusts.
The first thrust is to invigorate investment, trade and industry.
– The amount of domestic investment is expected to increase by 6.7%.
– Private investments are expected to touch RM260bil in 2018, in line with goals to make the private sector an engine of growth.
– RM7bil under the Working Capital Guarantee Scheme (SJPP) – RM5bil for capital and RM2bil for loans with a 70% job guarantee for the service industry.
– To automate the production process and reduce costs of foreign labour, RM1bil with 70% loan with a work guarantee below SJPP.
– RM1bil added to the size of the financing scheme fund for syariah-compliant SMEs, making it RM2.5bil, given a subsidy of 2% based on profit rate.
– RM200mil for training programmes, grants and SME (small and medium enterprise) easy loans under SME Corp and nearly RM82mil for industry development and halal products at various agencies.
– Tekun to receive RM500mil, highest-ever budget to benefit micro entrepreneurs.
– Budget 2018 increases the funds of Amanah Ikhtiar Malaysia (AIM) by RM200mil, total overall funding touches RM2.7bil and benefits 400,000 borrowers.
– 2020 is declared as the Visit Malaysia Year. In 2020, Malaysia will also host series of international meetings, namely APEC, WCIT and CHOGM
– RM80mil under the Rural Economy Funding Scheme (SPED) through Bank Rakyat and Bank SME, financing facility for rural Bumiputra entrepreneurs.
The second thrust is towards achieving TN50 aspirations
– Every Malaysian child born from Jan 1, 2018-2022, to be gifted RM200 worth of Amanah Saham units in new fund called Amanah Dana Anak Malaysia 2050 or ADAM50.
– RM2.2bil for scholarship grants under the Public Service Department (JPA), Higher Education Ministry and Health Ministry
– RM400mil for research grants and development for public universities, including special allocation to Universiti Malaya to become one of the Top 100 universities globally.
– RM90mil allocated for MyBrain Progamme for 10,600 people to further their studies at the Masters and Doctorate level.
– University and Form Six student to continue receiving book vouchers worth RM250, benefiting as many as 1.2mil students.
– Govt aid of RM100 for students from low-income families continues in 2018, with RM328m allocation which will benefit 3.2 million students
– PTPTN discounts until Dec 31, 2018: 20% discount for full settlement, 15% discount for 50% outstanding settlement, 10% through direct debit from salary. Grace period for PTPN loan repayments extended to 12 months after graduating, loans for those furthering studies can now be combined.
– RM1bil for initiatives spanning FitMalaysia, National Sports Day, athlete programmes, grassroots program and the national football development programme.
– RM20mil for the Bukit Jalil Sports School to improve its facilities as a premier sports school
Third Thrust: Excellence in Education Development, Training, Skills and Talent, total of RM61.6bil for this sector
– RM550mil allocated to special fund for improvement and upkeep of schools, as follows:
RM250mil for national schools; RM50mil for Chinese schools; RM50mil for Tamil schools; RM50mil for Mubaligh (missionary) schools; RM50mil for full boarding schools; RM50 for Maktab Sains Rendah Mara, RM50mil for government-aided religious schools.
– Almost 2,000 schools in bad condition, Government allocating largest-ever amount, RM2.5bil over a period of two years through the Industrial Building System method.
Fourth Thrust: Budget 2018 allocation for rural development includes:
– RM6.5bil allocation for basic infrastructure in rural areas;
– RM2bil for the Pan-Borneo Highway;
– RM1.1bil to upgrade bridges, streetlights, villages, surau and markets;
– RM1bil for SKMM to upgrade the communication infrastructure and broadband facilities in Sabah and Sarawak;
– RM934mil for rural road projects, including almost RM500mil for Sabah and Sarawak;
– RM672mil for electricity supplies, including RM620mil for Sabah and Sarawak involving 10,000 rural homes;
– RM420mil including almost RM300 for Sabah and Sarawak provided for clean water supply involving 3,000 homes;
– RM500mil allocated for the Public Infrastructure Maintenance Programme and Basic Infrastructure Project;
– RM50mil for mapping and measurement of custom lands, in which RM30mil is for Sarawak and RM20mil for Sabah.
– RM300m to be allocated for National Blue Ocean Shift, including for the building of new Urban Transformation Centres
– Almost RM9bil allocated for Royal Malaysian Police, including RM720mil to build 11 headquarters and six police stations, purchase of new firearms and operational vehicles, RM170mil to upgrade ICT equipment, including 1PDRMnet system.
– Over RM14bil allocated for the Armed Forces, including RM3bil for purchase and maintenance of defence assets and RM250mil for Esscom to enhance coastal security controls in Sabah and Sarawak.
Fifth thrust: Prioritising well-being of rakyat and income-making opportunities
– Personal income tax cut for all 2.3m tax payers, with 2% cut in the RM20,000 to RM70,000 tax income bands. Over 261,000 people no longer have to pay income tax. New tax rates for three income brackets as follows:
1) RM20,001 to RM35,000 (3%)
2) RM35,001 to RM50,000 (8%)
3) RM50,001 to RM70,000 (14%)
– 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.
– Mandatory maternity leave for private sector to be increased from 60 to 90 days; women returning to work after two-years to enjoy tax exemption for 12 consecutive months.
– BR1M 2018 expected to benefit seven million beneficiaries with a maximum payout of RM1,200 each
– Toll collection on Batu Tiga, Shah Alam (Federal Highway) and Sungai Rasau in Selangor; Bukit Kayu Hitam (Kedah) and Eastern Dispersal Link (Johor) abolished from Jan 2018.
– Civil servants to get RM1,500 special payment: RM1,000 in early-Jan 2018 and remaining RM500 towards Hari Raya 2018
– RM2.5 billion allocated for MARA higher education scholarships, which is the highest ever allocation and to benefit 90,000 students
– Government retirees to receive RM750 special payment each: RM500 to be paid in January 2018 and remaining RM250 towards Hari Raya next year
– 50 Kedai Rakyat 1Malaysia outlets to be transformed to KRIM 2.0 in 2018, with 3,000 outlets set up within 3 years
– Budget 2018 still includes up to RM3.9bil in subsidies, for items goods and transport, cooking gas, flour, cooking oil, electric subsidies and toll.
– Domestic helpers can now be sourced directly from country of origin or online with Immigration Dept, at existing levy and processing fee rates
– Tax exemption on 50% of home rental income up to RM2,000 per month to Malaysians residing in Malaysia. Exemption given from Year Assessment 2018 to 2020
– Cost of hiring foreign domestic helpers to be reviewed, with a view on reducing it in future
– To encourage more affordable housing, Step Up Financing Scheme for PR1MA homes to be extended to private developers, based on criteria to be set
– No GST for reading materials, including magazines, comics and journals, from Jan 1, 2018
– Services provided by local authorities will not be subjected to GST, effective 1 April 2018 or October 2018, according to the choice of local authorities
– GST exemption for O&G firms that import rigs, floating structures from Jan 1
– The management and maintenance services of stratified residential buildings supplied by the Joint Management Body (JMB) and management corporations are not subjected to GST.
Sixth thrust: Preparing for the fourth Industrial Revolution and the Digital Economy
– RM5b to be allocated under Green Technology Financing Scheme to boost green technology investments
– Capital allowances on ICT equipment to be eligible for full claims between 2018 and 2020
– RM83.5mil for Phase 1 DFTZ Aeropolis; minimum value for imports raised to RM800 from RM500 so Malaysia can be the regional e-commerce hub.
Seventh thrust: Enhancing efficiency and delivery of government-linked companies (GLC) and public service.
– GLC employees to enjoy increased benefits such as flexible working hours, childcare centres in offices.
– Increase allowance for senior citizens to RM350 per month, RM50 increase for working and unemployed People with Disabilities (PWD) as well as caretakers.
Eighth thrust: Balancing between the par excellence of the worldly and the hereafter.
– Retirement benefits for public servants who retire on medical reasons.
– Cash in lieu of accumulated leave of more than 150 days during the retirement year.
– Women more than five months’ pregnant and husband can leave work an hour earlier, provided both working in the same location.
– Maximum of 90 days maternity leave a year, total leave allowed is now 360 days.
– Minimum pension of RM1,000 per month.
– Medical facilities extended to parents of retirees.
– Special assistance of RM1,500 to Village Heads and Tok Batin
– Upgrading and maintaining wiring systems in all registered religious schools by GiatMara
– Monthly allowance and one-off RM1,500 payment for imam, bilal, Kafa and takmir teachers.
For the budget 2018 Full Speech, please visit – http://www.bajet.com.my/2018-budget-full-speech/