The 2018 Budget of Malaysia has been announced by the Prime Minister (PM) on Friday, 27 of October 2017. The theme of this Budget is "Prospering an Inclusive Economy, Balancing between Worldly and Hereafter, for The Wellbeing of Rakyat, Towards The TN50 Aspiration" which based on eight main thrusts. There are, Invigorating Investment, Trade and Industry, Moving Towards TN50 aspiration, Empowering Education, Skills and Trainings, and Talent Development, Driving Inclusive Development, Prioritising the Wellbeing of Rakyat and Providing Opportunities to Generate Income, Fortifying the Fourth Industrial Revolution and Digital Economy, Enhancing Efficiency and Delivery of Government-Linked Companies and Public Service and lastly, Balancing between the Worldly and Hereafter. The proposed Budget allocates a sum of RM280.25b compared to RM260.8b in 2017, of which, RM234.25b of the total budget is set for operating expenditure while the remaining RM46.0b is allocated for development expenditure. This set of budget is backed by expected government revenue of RM239.86b, implying a fiscal deficit of 2.8% to 2018 GDP where there was 3.0% in 2017 . As the country's fiscal deficit is expected to show improvement, we are hopeful to see firmer stability in foreign capital flows as well as the local currency exchange rate.
The first thrust, Invigorating Investment, Trade and Industries. Under this thrust, there are ten major focus in improving our country investment, trade and industries. First one is high impact investment which is we focus on emphasize high impact investment and strategic fund under MIDA, promote economic growth and create job opportunities in 5 main corridors located in Perak, Kedah Kelantan and Sarawak, and increase the period of Tax Incentive for Principal Hub until December 2020. Secondly is strengthening small and medium enterprises (SMEs) which are our focus is on Skim Jaminan Pembiayaan Perniagaan for working capital and services sector, government guarantee loans for production, shariah compliant financing scheme with subsidy rate, loans under SME Corp and halal industries and products development. Third is micro financing that focus on loan fund under Tabung Ekonomi Kumpulan Usahawan Niaga (TEKUN), Amanah Ikhtiar Malaysia (AIM) and Rural Economic Financing Scheme (SPED) for Bumiputera. Fourth is accelerating exports where our country will promote and expand export market, have insurance coverage for SME exporters and loans for export. Fifth is invigorating agriculture sector that focus in financial assistance to farmers, rubber tappers, smallholders and fisherman of RM200 for 3 months prior to paddy harvesting season, replanting oil palm, coconut and rubber replanting programme and upgrade plantation roads. Sixth, revitalised tourism industry such as Visit Malaysia Year 2020, expand eVisa Regional Hub, tax incentive for tour operating companies extended to 31 December 2020 and subsidy of 2%. Seventh, healthcare tourism industry that focus only in healthcare travel council, create a high value healthcare packages such Asian Hub for Fertility Treatment and Cardiology, investment tax allowance and double tax deduction on expenditure. Eighth is driving logistics sector which is focus in ECRL, MRT2, High Speed Rail, and Central Spine Road project. Besides that, subsidy for rural train transport, upgrade International Airports of Pulau Pinang and Langkawi also Sultan Ismail Petra, Mukah and Sandakan airports, public transportation fund and recognising Pangkor Island as Duty-Free Island. Ninth, strengthening capital market in income tax exemption for Sukuk Green SRI grant receiver and fund managers, relive on tax imposed, intellectual property as instrument of financial guarantee, and Bank Negara will monitor salary payment through local bank account for foreign worker in beginning of 2018. Last but not least, focus on childcare centre and welfare facilities for person with disabilities (PWDs) where there is a requirement to ensure they are provided with new office building and additional tax deduction are extended to employers hiring PWDs that certified by SOCSO.
Second thrust, Moving towards TN50 aspiration. There are four major focus in TN50 aspiration which are inculcating savings culture for TN50 generation where child that born from1 January 2018 to 2022 will get RM200 through PNB’s Unit Trust Scheme under Malaysian Children Trust Fund 2050 (ADAM50). Besides that, education for TN50 generation (RM250 million) that focus in Science, Technology, And Mathematics (STEM) centre establishment, enhance computer science module and introduction of 21st Century Smart classrooms. Other than that, TN50 talent and career which is establishment of one-stop centre incorporating agencies such SL1M and HRDF, apprenticeship programme and private company (secured government contract) required to allocate 1% of contract value to SL1M Programme. Furthermore, intensifying higher education where scholarships will be provided, book voucher assistance of RM250, further study for postgraduate levels under MyBrain and research and development grants to higher education institutions.
Third thrust, the Improvement and Maintenance of Schools. As per announced by the Prime Minister of Malaysia, Datuk Seri Najib Abdul Razak a total of RM550 million for the improvement and maintenance of schools. It is important to allocate most of the budgets on educations. This is because the youth is now going to be the leader of the future. A good education may prepare them to be able to continue to make Malaysia a great country in all aspects that have to be offered.
Due to the Malaysia diversity of culture the allocations of budgets are given as below:
RM250 million to National Schools.
RM50 million to National-Type Chinese Schools.
RM50 million to National- Type Tamil Schools.
RM50 million to Missionary Schools.
RM50 million to Boarding Schools.
RM50 million to Mara Junior Science Colleges.
RM50 million to Government-Aided Religious Schools.
This allocation of the budget will give the opportunity for all the children in Malaysia to have an education. As some unfortunate countries may not have the resources to offer the chance of giving an education to some of the children in their country. For example, the North-Eastern of Africa as they are the country with least likely to go to school as per the new rankings. Malaysia schools are divided into two, the rural area schools and the urban area schools. The budget given may close the gap between the rural area schools and the urban area schools. As this will give the opportunity to upgrade schools and improve the performance of the students. Thus, a chance for the rural area schools to compete against the urban area schools.
Furthermore, the Prime Minister announced that schools around Malaysia are given the allocation of RM2.5 billion for a period of two years for the purpose of upgrading and refurbishing of 2,000 old schools building. Due to the increasing of number of deaths of students who died in a burning school building with no upgrade of safety has caught the attention of the Government to make sure the school is safe for students to go. The allocation of RM2.5 billion are given as below:
RM500 million for schools in Peninsular Malaysia.
RM1 billion for schools in Sabah.
RM 1 billion for schools in Sarawak.
Other than allocation for school building, the allocation for school assistance and student assistance are also given. This shows the effort of the Government that education also is a priority for Malaysia.
Fourth is the Driving Inclusive Development. In Malaysia, there are parts of Malaysia are urban areas and rural areas. Most of the Peninsular Malaysia are urban areas. Unfortunately, for Sabah and Sarawak there are still parts of the area are rural area. As announced by Datuk Seri Najib Abdul Razak, the Prime Minister, the allocation of RM6.5 billion for the development of the rural area.
The budget given includes the development of:
RM2 billion in the Pan- Borneo Highway. This is the development of finishing the highway that will connect Sabah and Sarawak with Brunei. As this budget could help to finish the highway that will benefit the locals there and the import and exports between Sabah and Sarawak with Brunei.
Since technology is always upgrading. Every second there is always an update. Therefore, RM1 billion was allocated for Malaysian Communications and Multimedia Commission to upgrade the communication infrastructure and broadband facilities in Sabah and Sarawak.
Some of the roads in rural areas are not paved and some of the roads are damaged due to heavy lorries driving on it causing the road to have holes. The damaged road had caused accidents and difficulties for the citizen to use the road. The Government had allocated RM934 million for rural road projects and almost RM500 million for Sabah and Sarawak.
There are locals living in the rural areas. As calculated, there are 10,000 rural homes in Sabah and Sarawak. Some of the rural homes may not have electricity for their homes due to their location. Therefore, RM672 million were allocated for electricity supplies for the rural homes.
The rural areas usually have no access of clean water supply, unlike urban areas where they can a find clean water supply in the kitchen of their homes by simply pressing the option button hot or cold. The allocation of RM420 million, including almost RM300 million for Sabah and Sarawak provided for clean water supply that give access to clean water to 3,000 homes.
RM500mil allocated for the Public Infrastructure Maintenance Program and Basic Infrastructure Project.
RM50mil for mapping and measurement of custom lands, in which RM30mil is for Sarawak and RM20mil for Sabah.
The safety of a country is very important to ensure the harmony of the citizen. The Government had allocated RM9 billion for Royal Malaysian Police which include RM720 million to build 11 headquarters and six police stations, purchase of new firearms and operational vehicles and RM170 million to upgrade the ICT equipment, including 1PDRM net system. As this allows the Royal Malaysian Police will make their service better with the advancement of technology of everything is at the tip of the finger. Moreover, RM14 billion was allocated for the Armed Forces that include RM3 billion for purchase and maintenance of Defence assets and RM250mil for Esscom to enhance coastal security controls in Sabah and Sarawak. As this is to prepare for the attacks of terrorist towards the country.
For the fifth thrust that has been announced by Prime Minister is about Prioritising the Wellbeing of Rakyat and Providing Opportunities to Generate Income. Here means that focused toward helping Malaysian people in order to generate income for rakyat by introducing a few programs such as eRezeki, eUsahawan and eLadang. Moreover the government take initiatives in order to help Malaysian people to reduce their cost of living by implementing subsidies for goods, transportation, electricity and toll, providing Bantuan Rakyat 1 Malaysia (BR1M) with RM1200 maximum of payment, reduction of individual income tax for RM20,000 to Rm70,000 by 2% and the toll abolished in Batu Tiga, Shah Alam and Sungai Rasau (Selangor), Bukit Kayu Hitam (Kedah) and Eastern Dispersal Link (Johor). For housing the government also builds 210,000 units of Perumahan Rakyat 1 Malaysia (PR1MA), 3,000 units Rumah Mesra Rakyat, 17,300 of PPR, 25,000 units of PPA1M, 600 of MyBNHomes and 2,000 of MyHomes. Nest, in term of healthcare, by upgrade, maintenance of healthcare facilities, medical equipment, ambulance, operation theatre for Muar, Banting and Balik Pulau hospitals. There is also have the construction of women and children wards at Tengku Ampuan Afzan and Putrajaya hospitals, Cancer Centre at Sungai Petani, specialist clinic and new ward at Penang Hospital, Forensic Medical Centre at Kuala Lumpur Hospital. Lastly there is not subjected of GST towards services provided by local authorities, reading materials comprising all types of magazines and comics and also the GST relief towards services of construction of school buildings and houses of worship funded through donations and cruise operators.
The sixth thrust is Fortifying the Fourth Industrial Revolution and Digital Economy. Here this is more focused to the Matching Grant under the Domestic Investment Strategic Fund in order to enhance the smart manufacturing facilities. For tax incentives, by providing the extended incentive period for Accelerated Capital Allowance on automation equipment from 2018 to 2020 and this incentive up to 200% for manufacturing related-services sectors and provide the Capital Allowance incentive for ICT equipment beginning from 2018 to 2020. Next is the sustainable development which is that is by providing Green Technology Financing Scheme to promote investment in green technology industry and there is also have Flood mitigation programs. Lastly id the Digital Free Trade Zone which is the construction the first phase of DFTZ at Aeropolis and Kuala Lumpur International Airport.
The seventh trust of 2018 Budget is focusing on Enhancing Efficiency and Delivery of Government – Linked Companies and Public Service. In 2018 we can expect more benefits for employees whereby there is a huge ways that government want to implement like increasing distribution of profit to employees, additional flexible working arrangement and creating the child care centres and better benefits like facilities and services for pregnant female employees. As we can see in this highlight, there is more opportunity for employees to have finance and services assistance which come in different kind of channel. Besides that, the budget also declaring the prioritised needs for senior citizens, people with special needs and children. This benefits comes with increased monthly allowance for seniors citizen ( RM603 million) and for children with poor families background grand (RM 245 Million). This budgets benefits more for this group of citizen as they really need proper attention which not only come from family but from government assistance. Moreover, this step will motivating citizen to be better citizen and increase the chances of creating better country as there is believe of talent comes from different kind of age, background and races. For example, great talent hidden among children with poor background that sometimes need a little push in order to success; and government support somehow can trigger it. Lastly in this 7th thrust, there is opportunity in public sector housing financing board which legal aid funding is available in sales and purchase agreements that benefits citizen as citizen as it will create opportunity for citizen to own house at budget desired with saving for legal matter. As it usually come with high cost that could effect the buying decision. Besides that, with more citizen owning real estate, it will contribute into the country economics which increasing cash flow will show that company is developing into better position in world economics.
The last thrust is highlighting in balancing between the par excellence of worldly (Duniawi) and here-after (Ukhrawi). Government for 2018 budget have creating more funding on research matter like SERI and KITA- UKM. Having more research opportunity will create chances for Malaysia to be known as one of the research centre in the world. The aim is high but not possible as in the world, there is many country outsourcing the knowledge and creating big funding for research they want which sometimes not for their benefits but also for world benefits and world knowledge collection which can be use or practices. Other than that, government also want to enhancing the efficiency of the Public Services like having more Promotion option for seniors staff, Umrah leave up to 7 days, Leave early 1 hour benefit for more than 5 month pregnant staff, Increase maternity leave, Set the minimum pension to RM1000 and civil servant special assistance fund worth RM1500. Those kind of benefit have help to increase the motivation for public servant to serve better and also shows the understanding and compassion of government for their citizen. Lastly, the focus on Uphold the greatness of Islam and the Integrity of the rakyat like funding for Giatmara to maintain the wiring systems in all registered Tahfiz school (RM50 Million). This is the step of solution after the following incidents of Tahfiz Institutes burn down tragedy that kills many students. Government also want to introduce the training scheme through Giatmara for all tahfiz school in order for them to be prepared more. The monthly allowance for imam, bilal, and religious teachers (RM 588 million) and the One-Off payment of RM1500 as budget RM100 Million had been allocated for that purpose.
With many newly budget created for many purpose in focusing to serve better for citizens, it is very anticipating to see the process being implemented and success throughout the year of 2018.