Earlier today, Prime Minister Najib Razak tabled Budget 2017 themed, 'Accelerating Growth, Ensuring Fiscal Prudence, Enhancing Well-being of the Rakyat'
Prime Minister Datuk Seri Najib Razak started the Budget 2017 by mentioning that the first post-independence budget in 1959 only had an allocation of RM888 million. This year, Budget 2017 has a total allocation of RM260.8 billion. That will see a 3.4% increase compared to Budget 2016 recalibration.
He said that the Malaysian government has managed to sustain the country's GDP growth at 6% per annum.
Moving forward, PM Najib Razak highlighted three main initiatives by the government that has ensured the steady growth of the country's economy, namely:
1) The government has diversified the sources of economic growth, especially by reducing dependency on the Oil and Gas sector from 41.3% in 2009 to 14.6% in 2016.
2) The introduction and implementation of GST which has managed to collect almost RM30 billion as of 19 October 2016.
3) Subsidy rationalisation: Oil subsidy back in 1995 stood at RM123 million, constituting only 0.24% of the overall national budget. To increase efficiency, the government has instead moved on to targeted subsidy, focusing only on the sectors and community that are in need of most assistance.
As a result, Malaysia's Purchasing Power Parity has named Malaysia as an upper-middle income nation. The country's purchasing power per capita has increased from USD23,100 in 2012 to USD26,891 in 2015.
Here's the breakdown of Budget 2017's RM260.8 billion allocation:
RM214.8 billion has been allocated for Operating Expenditure and the remaining RM46 billion will go to Development Expenditure.
Operation Expenditure is broken down into:
- RM77.4 billion for Emolument
- RM32 billion for Supplies and Services
- RM103.9 billion for Fixed Charges & Grants
- RM691 million for Purchase of Assets
- RM816.6 million for Other Expenditures
As for the Development Expenditure:
- RM25.9 billion for the economic sector
- RM12.2 billion for the social sector
- RM5.3 billion for the security sector
- RM2.5 billion for general administration
- RM2 billion for contingencies
In the year 2017, the government expects to achieve the fiscal deficit target of 3%.
Budget 2017 has been formulated based on five main government principles and philosophies, namely:
1) The government prioritises national integration in forming a nation state and views the country's ethnic diversity as an essential asset.
2) The government also promises to prioritise and uphold sovereignty, the constitution, laws and the national security.
3) The government is cohesive, stable and works as a strong team.
4) The government works with a clear direction, systematic planning and holistic, efficient and structured implementation plans.
5) Finally, the government upholds the national ideology which is the Rukun Negara and Wasatiyyah which is the universal Islamic philosophy and principal.
We've broken down the budget into 20 segments to help you better understand the government's financial plans for the year 2017:
1. Civil Servants
- Quarantine leave for up to 5 days without record to public servants whose children are ill and or quarantined.
- Computer loan facility extension for the purchase of smartphones which can be utilised once every three years with a limit of RM5,000.
- The increase of the limit to the motorcycle loan facility from RM5,000 to RM10,000.
- The completion of 30,000 of the Perumahan Penjawat Awam 1Malaysia with the selling price between RM90,000 and RM300,000. That is 20% below the market price.
- The increase of the civil servant's housing loans to RM200,000 and RM750,000 from RM120,000 and RM600,000 respectively.
- The extension of the contract of service and contract for service officers that are expiring at the end of the year 2016, for at least another year.
- The introduction of Grade56 for medical and dental specialists to curb the problem of specialist doctors exiting and promotion delays. To appoint the first group of doctors, dentists and pharmacists on contract latest by December 2017. Almost 2,600 doctors that are without housemanship with benefit from this.
2. Rakyat Centric Projects in Urban and Rural Areas:
- 97,000 street lights and 3,000 LED lights will be installed at crossroads for 7,500 villages around the country, including Sabah and Sarawak.
- 616km of roads and bridges to be built and upgraded with an allocation of RM1.2 billion to enhance connectivity of villages, towns and cities.
- A total of RM4.6 billion allocation to maintain all state roads under the Malaysian Roads Records Information System.
- An allocation of RM350 million to build and refurbish 17,000 units of destitute and dilapidated houses in rural villages and Orang Asli settlements.
- An allocation of RM732 million to increase the supply of clean water, targetting 5,200 houses and upgrading the FELDA water supply system.
- RM500 million to set up a Water Supply Fund to address the water issues that are plaguing the nation.
- RM460 million allocation to provide electricity supply in rural areas, targeting about 10,000 households.
- 69 Flood Mitigation Plans to be continued across the country with an allocation of RM495 million.
- The implementation of People-Friendly Projects with an allocation of RM800 million, prioritising G1 and G2 contractors.
- An allocation of RM576 million to build 11,250 PPR houses that will be sold between RM35,000 and RM42,000. The government will finance RM20,000 of the full amount.
- More than 30,000 houses to be built at strategic locations with the selling price ranging from RM150,000 to RM300,000.
- To build around 10,000 houses in urban areas for rental to eligible youths with permanent jobs, including young graduates.
- To build 5,000 units of People's Friendly Home, with a government subsidy up to RM20,000 per unit.
- Stamp duty exemption to be increased to 100% on instruments of transfer and housing loan instruments to reduce the cost of first home ownership. Do note that this exemption is limited to houses with value up to RM300,000 for 1st home buyers only between the period of 1 January 2017 till 31 December 2018.
4. B40 Group
Here's the breakdown:
- An allocation of RM45 million for the expansion of the MySuria program which will see the installation of solar panels in more than 1,600 houses.
- An allocation of RM30 million to expand the Mobileprenuer Programme by GIATMARA, targeting 3,000 participants using motorcycles.
- An allocation of RM100 million for the Agropreneur program to produce 3,000 young entrepreneurs.
- An allocation of RM100 million to revitalise the eUsahawan and eRezeki programmes under the MDEC which involves 300,000 participants.
- RM10 billion subsidy for cooking gas, toll charges, public transportatin and various incentives.
- Government to encourage B40 group to generate additional income by joining ride-sharing services like Uber. For those who do not own a vehicle, downpayment will be made using BR1M and a rebate of RM4,000 will be provided for the purchase of Proton Iriz.
- For households earning RM3,000 to 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.
- Bereavement Scheme will be continued with RM1,000 compensation given to the next of kin of BRM1M recipients for households and elderly category.
This will benefit 7 million recipients with an allocation of RM6.8 billion.
- 10% discount for payment of at least 50% of the outstanding debt made in a single payment.
- 10% discount for repayment through salary deduction or direct debit in accordance with the repayment schedule.
The PTPTN repayment incentives will be effective tomorrow, 22 October 2016 until December 2017.
7. The empowerment of Bumiputera
- RM100 million to AIM for their various entrepreneurship programmes.
- RM200mil to Perbadanan Usahawan Nasional Berhad to implement the Entrepreneurship and Business Premises Financing Programme.
- RM120 million to MARA for various entrepreneurship programmes.
- Facilitation Fund amounting to RM500m to TERAJU to assist Bumiputera companies to expand their businesses or to start a new business.
8. Financial assistance for poor families
- Financial assistance to poor families, including General Assistance up to RM300/month & Children Assistance up to RM450/month.
- An allocation of RM424 million is provided for senior citizens, including senior citizen socioeconomic assistance of RM300 monthly.
- RM535 million, for persons with disabilities, including employee allowance, disabled children training allowance & assistance for PWDs unable to work.
9. Financial support for parents with schooling children
- Provide Schooling Assistance Programme of RM100 each to students from families earning up to RM3,000, benefiting 3.5 million students.
- RM1.1 billion to include Additional Assistance Payment for School Fees; Textbook Assistance and Per capita Grant Assistance.
- Special Needs Student Allowance of RM150 monthly, involving 67,000 students as well as replace buses for 21 special education schools.
- An allocation of RM600 million to Special Fund for Improvement and Maintenance of Schools.
10. Primary and Secondary Schools
- An allocation of RM132 million to improve access to pre-school education in government schools for free.
- An allocation of RM570 million to to reconstruct 120 destitute schools. 60 in Peninsular, 30 in Sabah, 30 in Sarawak using Industrial Building System, as well as upgrade 1,800 science laboratories.
- An allocation of RM478 million to complete construction of 227 primary & secondary schools throughout the country, including 8 new schools.
- An allocation of RM90 million to extend the English language proficiency in schools through Cambridge English, Dual Language and Highly Immersive programmes.
- An allocation of RM340 million to provide free tablets to assist teaching to 430,000 teachers.
- An allocation of RM1.1 billion to include Additional Assistance Payment for School Fees; Textbook Assistance and Per capita Grant Assistance.
- An allocation of RM1.1 billion for Hostel Meal Assistance Programme for 365,000 students.
- An allocation of RM10 million to expand pre-school programmes to over 50 Tamil schools.
11. Tertiary Education
A sum of RM7.4 billion is allocated for 20 public universities:
- From this amount, RM1.4 billion is allocated to 4 university hospitals, RM300 million is allocated for the empowerment of 5 research universities.
- RM100 million is allocated to higher education institutions to foster research culture as well as to increase publications and intellectual properties.
- Government will replace book vouchers with student debit card worth RM250 which can be used to purchase books,computer accessories & internet access.
- Scholarships will continue to be awarded an allocation of RM4.3 billion in 2017.
- Accelerating the implementation of Pan Borneo Highway in Sabah and Sarawak.
- An allocation of RM100 million to restore the East Coast railway line along Gua Musang – Tumpat that was destroyed during flood.
- To increase the trip frequency of ETS for the Johor Bahru – Padang Besar route.
13. SMEs and Entrepreneurship
- An allocation of RM20 million to be channeled to the 1Malaysia Hawkers and Petty Traders Foundation to provide loans to Chinese hawkers communities.
- An allocation of RM75 million to implement programmes under SME Master Plan.
-An allocation of RM200 million from the Working Capital Guarantee Scheme (WCGS) Fund will be specifically allocated to startups.
- Government will provide 2% rebate on interest rates charged to SME borrowers under SJPP scheme.
14. Safety, Security and Defence
- An allocation of RM1.8 billion for defence asset maintenance such as aircraft, patrol vessels, communication equipment, buildings and weaponry.
- An allocation of RM323 million for personnel deployment at the eastern border of Sabah.
- An allocation of RM12.8 billion including a sum of RM8.7 billion for the Royal Malaysia Police.
- An allocation of RM80 million to more than 200,000 RELA members.
- An allocation of RM60 million to enhance the effectiveness of crime prevention in cities including the omnipresence and Motorcycle Patrol Unit.
An allocation of RM25 billion for implementation of healthcare programmes and projects including:
- To build and upgrade new hospitals and clinics in Perlis, Kuching, Mukah, Jempol, Muar and Johor Bahru
- To upgrade hospital facilities nationwide with an allocation of RM536 million which includes 100 ambulances, cardiology treatment equipment for Serdang Hospital, Penang Hospital and Sultanah Aminah Hospital.
- An allocation of RM4.5 billion for the operations of 340 1Malaysia clinics, 11 1 Malaysia Mobile Clinics, 959 health clinics & 1,800 existing rural clinics.
- An allocation of RM4 billion for supply of drugs, consumables, vaccines and reagents to all Government hospitals and health facilities.
- An allocation of RM20 million is allocated in the form of loans for the purchase of hospital equipment.
- An allocation of RM110 million; RM70 million from it will be for medical assistance, benefiting almost 10,000 poor patients.
- An allocation of RM40 million for one-off grants worth RM200,000 to purchase haemodialysis equipment.
- An allocation of RM80 million for the National Community Health Empowerment Programme.
16. Taxi Drivers
- A grant of RM5,000 to purchase new vehicles and offer individual taxi permits, with an allocation of RM60 million.
- The introduction of SOCSO Scheme with a launching grant of RM60 million to individual taxi drivers with a monthly income up to RM3,000.
- The speed of fixed line broadband services will be doubled with the reduction in prices by 50%.
- Government to launch an initiative for Internet broadband services in public universities to be increased to a max. 100GB per second.
- MCMC to provide RM1 billion to ensure overage and quality of broadband nationwide reaches up to 20 megabytes per second.
18. Women's Development
- An allocation of RM30 million for women to undergo mammogram screening and receive Human Papilloma Virus vaccination to prevent cancer, for free.
19. Tax Relief
- Tax relief of up RM1,000 for purchase of breastfeeding equipment for breastfeeding women.
- Tax relief of up to RM1,000 for taxpayers who enroll their children aged 6 years and below into registered nurseries and pre-schools.
- The purchase of reading materials, computers and sports equipment to be combined as the lifestyle tax relief. The relief is also extended to include printed newspapers, smartphones and tablets, internet subscriptions and gym membership fees.
20. Youth And Sports
- An allocation of RM50 million for the construction of Football Academy Phase II in Gambang, Pahang.
- An allocation of RM122 million for constructing & upgrading facilities such as States Youth & Sports Complex & Community Sports Complex.
- An allocation of RM70 million to continue the Elite Sports Podium Development Programme to prepare our athletes for international sports events.
- An allocation of RM54 million to continue the Sportsmen Development Program including Athlete Preparation and Paralympic Athlete Preparation Program.
PM Najib Razak wrapped up Budget 2017 on a high note by informing that all civil servants will receive a special assistance of RM500 while government retirees will be given RM250.
The cash assistance will be paid in January 2017.
A couple of months ago, PM Najib Razak had asked Malaysians to share what they want from Budget 2017. Here are some of the main concerns and wants raised by Malaysians: