17 Highlights You Should Know From Pakatan Harapan's #Budget2020

A total of RM297 billion was allocated for this year's budget.

Cover image via Kementerian Kewangan Malaysia

On Friday, 11 October, Finance Minister Lim Guan Eng tabled #Budget2020, the second Federal budget by the Pakatan Harapan government since it came to power

The total fund allocated for #Budget2020 is RM297.020 billion, which is 5.57% less in comparison to RM314.55 billion allocated in #Budget2019.

However, the government is not spending less despite what appears.

According to an analysis by Malaysiakini, this year's budget appears less due to the absence of the Goods and Services Tax (GST) and Income Tax refund, which amounted to RM37 billion in the previous budget.

If we discount the RM37 billion in the last budget, #Budget2020 is larger by 6.99%.

Themed, "Shared prosperity: Sustainable and inclusive growth towards a high-income economy", the 2020 Budget aims to stabilise the government's financial position.

Here's the breakdown of the #Budget2020's RM297.020 billion and how the Federal fund will be allocated:

1. Your Netflix will be taxed

The Digital Services Tax will come into effect starting in January 2020.

This will affect streaming services like Netflix and Spotify, Google's digital advertising, and also digital software and games distribution companies such as Steam.

Foreign companies providing these services in Malaysia can now register with Customs Department starting 1 October 2019.

2. Increased tax for your higher pay

The government is introducing a new tax rate for those earning two million ringgit or more per annum at 30%, up from the current 28% rate.

Termed as taxing the super-rich, the increase will only affect 2,000 people.

3. Education gets priority

Finance Minister Lim Guan Eng announced that the Ministry of Education will be allocated a whopping RM64.1 billion from the national budget total.

The budget allocated for the Ministry of Education this year is more than the budget allocated in 2019, which was at RM60.2 billion.

Every year, the Ministry of Education receives the biggest allocation.

4. Minimum wage gets a bump

With the rise in the cost of living in major cities in the country, the government has decided to increase the minimum wage to RM1,200.

In January 2019, the government had increased the minimum wage to RM1,100.

"As the cost of living increases in major cities nationwide, the government proposes to increase the minimum wage to RM1,200," Finance Minister Lim Guan Eng said, adding that the government is committed to increasing quality of life for people.

Image via iMoney

5. Highway toll burden to go down

Finance Minister Lim Guan Eng announced that there will be a minimum reduction of average toll charges by 18% discount across all PLUS highways.

Putrajaya will acquire four Klang Valley highways – Shah Alam Expressway (KESAS), Damansara-Puchong Expressway (LDP), Sprint Expressway (SPRINT), and SMART Tunnel (SMART) to be funded via Government-guaranteed borrowings.

Effective 1 January 2020, the toll rates for cars at the Second Penang Bridge will be reduced from RM8.50 to RM7.00.

6. Cash incentives for graduates who obtain employment

Finance Minister Lim Guan Eng said under the [email protected] programme, graduates who have been unemployed for over a year and secure work would receive a wage incentive of RM500 on top of their salaries every month for a duration of two years.

"Employers will receive a hiring incentive up to RM300 per month for each new hire for two years," he said when tabling the Budget 2020 in the Dewan Rakyat.

7. Targeted fuel subsidy

Individuals who own not more than two cars and two motorcycles are eligible to receive fuel Targeted Subsidy Programme (PSP) for one vehicle.

Image via iMoney

PSP will be launched in Peninsular Malaysia starting January 2020, with two eligible categories:

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8. Broadband prices decreased and connectivity speed tripled

Lim Guan Eng announced that prices of broadband services have been lowered by 49%, adding that the implementation of Mandatory Standard on Access Pricing (MSAP) for broadband packages have succeeded in increasing Internet speeds by three times.

In addition, the Malaysian Communications and Multimedia Commission (SKMM) has allocated RM250 million to prepare Internet access via satellite technology to increase connectivity in Sabah and Sarawak.

9. A major boost for e-sports to grow local talents

The government will allocate RM20 million to grow local e-sports scene.

Lim Guan Eng said the government recognises e-sports talents in Malaysia.

"The government wishes Malaysian e-gaming teams good luck in Southeast Asian Games, happening in Manilla this December," Guan Eng said.

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10. Uplifting the Public Service

Cost of Living Allowance (COLA) increased by RM50 per month for support staff, with a total allocation of RM350 million annually.

Civil servants with at least 15 years' service allowed early redemption of Accumulated Leave (Gantian Cuti Rehat) for up to 75 days as replacement pay.

Free personal accident insurance (up to RM100,000 coverage) for two years to new government housing loan borrowers.

To help relieve the burden of dependants to civil servants who have died in service, the Government will introduce an Ex-Gratia Death Benefit of up to RM150,000 payable to dependents of the deceased.

RM26 million to give Rela members higher allowance of RM2 per hour.

All personnel of Jabatan Perkhidmatan Bomba dan Penyelamat Malaysia will receive a special allowance of RM200 a month, amounting to RM35 million. This will benefit 14,400 personnel of the Fire and Rescue Department of Malaysia.

The Government will accord a one-off payment of RM500 to the 70,000 holders of the Pingat Jasa Malaysia, with an allocation of RM35 million.

"The country records its appreciation to the Malaysian Armed Forces, Royal Malaysian Police, Fire Rescue Department, Royal Malaysian Customs Department, doctors, nurses, teachers and all civil servants for tirelessly striving to make Malaysia better," he said.

Special payments of RM500 for civil servants Grade 56 and below and RM250 for retirees and non-pensionable veterans. All will be paid before the end of this year.

11. Bumiputera businesses to grow with RM445 million allocation

With the allocation, the government aims to improve access to financing, business premises preparation, and entrepreneurial training.

The total amount is divided between four different entrepreneurship bodies:

1) RM150 million is allocated for all entrepreneurship and skills development programmes by Perbadanan Usahawan Nasional Berhad (PUNB).
2) Meanwhile, programmes to enhance marketing, packaging, and financial literacy through SME Corp will get a budget of RM75 million.
3) Another RM170 million will go towards financing access through Tekun Nasional, SME Bank, and Real Estate Investment Berhad (PHB).
4) Lastly, RM50 million will be directed to entrepreneurship programs under the Economic Affairs Ministry.

12. Special grant for Sarawak and Sabah doubled

For 2020, Sabah and Sarawak will receive the largest portion of Development Expenditures amounting to RM5.2 billion and RM4.4 billion respectively.

The rate set by the previous government was RM26.7 million for Sabah and RM16 million for Sarawak per annum. For the first time, the Government proposes to increase the rate, doubling it for 2020 to RM53.4 million for Sabah and RM32 million for Sarawak.

13. RM1.3 billion to uphold the Federal Constitutional position of Islam as the religion of the Federation

The allocation for Islamic Affairs under the Prime Minister's Department will be increased to RM1.3 billion in the 2020 Budget, from RM1.2 billion this year.

"We will increase the allowance to Al-Quran dan Fardu Ain class (KAFA) Teachers by RM100 a month to 33,200 existing KAFA teachers with an additional cost of RM46 million," Finance Minister Lim Guan announced during the budget yesterday.

A one-off special bonus of RM500 for each Imam, Bilal (Muezzin), Tok Siak/Noja/Merbot (mosque caretakers) and Guru Takmir.

A sum of RM10 million will be allocated to the Department of Islamic Development Malaysia (JAKIM) to develop a greater understanding of Maqasid Shariah via a series of advocacy programmes and deliberations.

14. An increased focus on healthcare

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15. More for the Home Ministry and the Defence Ministry

Both the Ministry will receive an increased allocation of this budget.

While the Home Ministry will get RM16.9 billion to ensure national security is maintained, the Defence Ministry will get RM15.6 billion.

The increased allocation comes with a focus on improving defence preparedness, including improving the mobility of the Malaysian Armed Forces.

In addition, preparedness involves the need to address new threats, such as defending Sabah's waters that require equipment such as Fast Interceptor Crafts.

16. RM50 million to boost detention procedures and facilities

"The Government will allocate RM50 million through Global Infrastructure Anti-Corruption Centre (GIACC) to enhance detention procedures and facilities, in particular, the installation of 11,500 units of Closed-Circuit Televisions (CCTV) in police detention centres and immigration entry points," Lim Guan Eng said, adding that the Government is concerned with custodial deaths and alleged mistreatment of suspects.

The Government will implement much-needed reforms, which includes establishing laws and institutions such as:

FIRST: The Independent Police Complaints and Misconduct Commission (IPCMC) to raise public confidence in our Royal Malaysian Police Force (PDRM); and

SECOND: Establish the Malaysian Ombudsman to replace the Bureau of Public Complaints to enhance governance and delivery systems of the Government.

17. Initiatives to increase women's participation in the workforce

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Overall, the Government will be undertaking further measures to improve the working environment for women and parents in general.

You can refer to the full text of Budget 2020 here.

What do you think about Budget 2020? Let us know in the comments below.

Here's a recap of Budget 2019:

Read other Budget 2020 stories on SAYS: