Summary of Malaysia Budget 2010 (3rd Strategy)

3rd Strategy: Focusing on Well-Being of Rakyat (Citizens)
1) Preventing Crime

-RM3.7bil allocated to increase efficiency of security force.

-Total RM1bil provided to improve PDRM services.

-RM1.9bil will be provided to armed forces.

-Another RM622mil will be provided for Malaysia Maritime Enforcement Agency.

2) Improving Income and Quality of Life of the Rakyat

2.1) Eradicating Hardcore Poverty

-Distribute Federal Welfare assistance on the 1st day of each month.

-Continue the “Skim Program Lonjakan Mega” with an allocation of RM141mil which will benefit 5000 families.

2.2) Assisting the Poor and Vulnerable Groups

-Continue the SPKR with an allocation of RM180mil.

-Provide skills training and entrepreneurship programs to more than 3000 women.

2.3) Establishing “Kedai Desa” (Rural shops)

-RM30mil will be allocated to UDA Holdings Bhd to build 300 units of shops in nationwide rural area.

2.4) Eradicating Urban Poverty

-RM48mil allocated to implement related programs.

2.5) Increasing Home Ownership

-More than 44000 low cost houses will be sold at a price of between RM21500-RM35000 per unit by DBKL and JPN, besides; JPN also will provide 74000 low cost houses to be rented in 2010. Priority will be given to the low and middle income groups for the above programs.

-RM200mil will be allocated under Ministry of Housing and Local Government to extending appropriate financial assistance to rehabilitate low and medium cost houses.

-The Government will launch a scheme that enables EPF contributors to utilize current and future savings in Account 2 to obtain houses.

2.6) Expanding Public Health Facilities

-RM14.8bil allocated to manage, build and upgrade hospitals and clinics. Besides, Government will also allocate RM10mil to expand 50 community clinic services in selected urban areas.

2.7) Enhancing Social Safety Net

a) RM224mil allocate to the disabled. And also RM174mil provided for the senior citizens.

b) Allocate a sum of RM15mil to assist poor patients and purchase medical equipments.

c) A total RM3.3mil provided, which increase the allowance rate from RM50-RM150 a month for every disabled children enrolled in NGO-organized special schools.

2.8) 1Malaysia Sukuk

The Government will issue 1Malaysia Sukuk (Syariah-Based Government Saving Bond) of total RM3bil, offered to all Malaysians aged 21 and above, with min investment of RM1000 and max RM50000, maturity period of 3 years with 5% annual return rate paid quarterly.

2.9) 1Malaysian Retirement Scheme

-Government will establish the above scheme which administered by EPF for those who self-employed and without fixed income.

-For every RM100 contribution, the Government will contribute 5% subject to max RM60 per annum, which is an addition to the existing dividend paid by EPF. This contribution is only for a 5 year period and contributors may withdraw the savings at age 55.

2.10) EPF contributions

-EPF contributions will be increase to 11% on voluntarily basis and effective immediately. And will revert to 11% starting from 1 Jan 2011.

-Government proposes the existing personal tax relief of RM6000 be increases up to RM7000 for EPF contribution and life insurance premiums.

2.11) Developing Wakaf Properties

RM20mil will be provided for this particular purpose.


3) Strengthening Infrastructure in Rural and Remote Areas.

-In 2010, a sum of RM2.3bil will be allocated to:

a) RM857mil for construction of both rural and village roads

b) Priority will be given to the soil stabilizer in the construction of rural roads, where appropriate.

c) RM530mil allocated to supply water and RM825mil allocated to supply electricity.

d) Provision of RM88mil to implement 5356 social amenity projects.

-Government will spend RM41mil to improve the income and quality of life of the Orang Asli Community.


4) Improving Public Transport

a) Accelerate formation and operation of SPAD as a single authority to monitor and enforce service standards as well as provide a long term plan for public transport and expected to be operational in 2010.

b) Acquire 8 new EMUs and refurbish 9 EMUs by KTMB.

c) Acquire 35 units of LRT trains by SPNB.

d) Construct covered walkways linking LRT stations to nearby activity centers.

e) Expand special lanes and increase the number of buses in KL. And 4 new hubs will be constructed in Penang.

f) Fast-Track construction of the Integrated Transport Terminal in Gombak.

g) Implement dedicated lanes for buses on underutilized expressways and modify Touch’n’Go lanes at toll booths.



Glossary

PDRM: Polis Diraja Malaysia (Royal Malaysia Police)

SPKR: Skim Pembangunan Kesejahteraan Rakyat

DBKL: Kuala Lumpur City Hall

JPN: National Housing Department

NGO: Non Government Organization.

SPAD: Public Land Transport Commission

EMUs: Electric Multiple Units

KTMB: Keretapi Tanah Melayu Bhd

SPNB: Syarikat Prasarana Negara Berhad

*Adapted from Malaysia 2010 Budget Speech by Prime Minister Najib 

Summary of Malaysia Budget 2010 (2nd Strategy)

Summary of 2nd Strategy: Ensuring Holistic and Sustainable Development

1) Enhancing Highly Skilled Human Capital
1.1) Expanding Access to Quality and Affordable Education
RM30bil will be allocated to primary and secondary school education, where:
-RM19bil for emoluments
-RM2.8bil for student assistance and scholarship program
-RM1.6bil for schools construction (where RM1.1bil for refurbish).
Besides, 4 NKRA will be focused, which are namely:
a) Strengthening pre-school education – RM48mil will be provided in 2010.
b) Increasing literacy and numeracy rate – RM32mil allocated and all 2010 year 1 school children will be involved.
c) Creating high performance school – RM20mil allocated to target 20 schools to be recognized as SBT in 2010.
d) Recognizing school principles and head teachers – Monetary or non-monetary incentives will be awarded to head teachers and principles who achieve target performance.

1.2) Safeguarding Welfare of Student
a) Award national scholarship to 30 crème de la crème students.
b) Convert PTPTN to scholarship for those who graduate with 1st class honors degree or equivalent started at 2010.
c) Provide 50% discount on KTMB long distance fares for student aged 13 and above, commence at 2010.
d) Netbook package cost RM50 per month for 2 years offered to 100000 local university students by Telekom, commence 2010.

1.3) Enhancing Skills of the Workforce
a) RM1.3bil for polytechnics and community colleges.
b) RM504mil for Industrial Training Institutes and Advanced Technology Training Centre.
c) RM438mil for Institut Kemahiran MARA, Kolej Kemahiran Tinggi MARA, Institut Kemahiran Belia Negara, and Institut Kemahiran Tinggi Belia Negara.
d) RM 110mil for state skills development centres and selected training institutions.
e) Accredit SKM level 4 and above as equivalent to the academic stream.

1.4) Expanding PERMATA program
-RM100mil allocated to implement related programs.

1.5) Strengthening Public Higher Education Institutions
-Government will consider relaxing the rules and regulations on hindering IPTA from generating their own income.

2) Strengthening Banking and Financial System
-A new motor basic insurance and takaful scheme will be offered and expected to be introduced by the mid of 2010.

-Micro insurance and takaful coverage will be expanded for small businesses, small scale businessmen will benefit from coverage ranging RM10000-RM20000, with a premium of RM20 per month.

-Government will review, improve, and enforce Anti-Money Laundering Act and Anti Terrorism Financing Act 2001.

2.1) Invigorating the Stock Market 
a) First stage of allowing brokerage sharing at a minimum rate of 40% for remisier which takes effectively, and second stage of fully liberalized commission-sharing will be effective 1 Jan 2011.
b) Allow 100% foreign equity participation in corporate finance and financial planning companies compared at least 30% local equity before.
c) All PLC required offering e-Dividend, and stockbroker will offer e-Dividend option too.

2.2) Further Developing Islamic Finance System.
Government proposes existing tax incentives be extended to 2015 in financial services especially for Islamic finance. Scope will be extended:
a) Stamp duty exemption of 20% on Islamic financing instrument.
b) Tax exemption on banking profits derived from overseas operations, and also extended to profits of insurance and takaful company which derived from overseas operations.
c) Double deduction on expenditure incurred in promoting Malaysia Islamic
Finance.
d) Deduction on expenditure incurred on the issuance of Islamic securities approved by SC and LOFSA.
e) The tax treatment accorded to SPV established under the Companies Act 1965 is extended to SPV established under Offshore Companies Act 1990 electing to be taxed under the Income Tax Act 1967.
f) Tax exemption on profits received by non-Ringgit Sukuk approved by SC extended to Sukuk approved by LOFSA.

2.3) Ar-Rahnu Micro Credit Program
Government will encourage all syariah-compliant financial and banking institutions to offer this scheme.

3) Combating Corruption
a) Formulate a Whistle Blower Act to encourage corruption disclosure and will be introduced in 2010.
b) Establish 14 Special Corruption Session Courts and 4 Special Anti-Corruption Commission Appeal High Courts.
c) Enhance Malaysia image in anti-corruption.

4)  Development of Regional Economic Corridors.
-RM3.5bil will be allocated by Government in Regional Economic Coridors.

4.1) Developing Putrajaya and Cyberjaya
Efforts will be intensified to increase business, commercial and recreational activities.

5) Improving Effectiveness and Efficiency of Government Administration

5.1) Strengthening Management of Government Finance
-If to implement GST, it will replace the current sales and service tax as well as exemption will be given to the low income group.

-Government proposes that upstream petroleum companies income tax for year of assessment 2010 based on income derived from 2009 be allowed to pay in installments within 5 years.

-Government proposes that a tax of 5% be imposed on gains from the disposal of real property from 1 Jan 2010. But the existing tax exemption will be retained for gifts between close relatives. This exemption will be given on disposal of a residential property once a lifetime.

-Government proposes RM50 service tax per year imposed on each principle credit card and charge card, included those issued free of charge, and also RM25 service tax on each supplementary card, effective 1 Jan 2010.

-Government will impose a sum of RM10000 for each AP to open AP holders, effective 1 Jan 2010.

-Government allows government agencies to rent out certain assets and retain 50% of rentals received while the 50% shall be remitted to the Government as revenues, effective 1 Jan 2010.

-Government has identified assets (lands and buildings) which can be jointly developed or sold to GLC.

5.2) Restructuring of Fuel Subsidy Scheme
-To benefit only targeted groups, Government will implement a fuel subsidy management system in early 2010 as well as other commodities.

5.3) Intensifying Government Delivery System
-Civil servants with monthly household income from RM2000-RM3000 are qualified for the RM180 monthly pre-school fee subsidy. An allocation of RM200000 will be made available for every Ministry and Government department to establish day-care centre.

5.4) Individual Income Tax
-Government proposes income tax rate reduced to 26% effective from the year of assessment 2010, as well as cooperatives and non-resident individual’s tax rate.

-Government proposes personal relief be increased from RM8000 to RM9000, effective from the year of assessment 2010.

-Government proposes income tax on employment income of Malaysians and foreign knowledge workers residing and working in Iskandar Malaysia be imposed at a rate of 15% only.

*Adapted from Malaysia Budget 2010 Speech by Prime Minister Najib.

Glossary

NKRA: National Key Result Areas

 KEMAS: Jabatan Kemajuan Masyarakat

SBT: Skim Bantuan Tuisyen

Crème de la crème: French word, which means the very best.

KTMB: Keretapi Tanah Melayu Berhad

SKM: Sijil Kemahiran Malaysia

PERMATA: Program Pendidikan dan Pengasuhan Kanak-kanak

PLC: Public Listed Company

SC: Securities Commission

LOFSA: Labuan Offshore Financial Services Authority

SPV: Special Purpose Vehicle

GST: Goods and Services Tax

AP: Approved Permit

Summary of Malaysia Budget 2010 (1st Strategy)

Malaysia Budget 2010 presented by Prime Minister Najib implemented under 3 strategies, which were:

1st Strategy: Driving the Nation towards a High-Income Economy

2nd Strategy: Ensuring Holistic and Sustainable Development

3rd Strategy: Focusing on Well-Being of the Citizens

Below is the 1st Strategy Summary:

1st Strategy: Driving the Nation towards a High-Income Economy

1) Increasing Private Investment
Government will give priority to enhance domestic investment and encourage local companies abroad to remit their profits and reinvest in the country.


1.1) Providing Business Friendly Environment
-Accelerate the pace of businesses activity such as registration and commercial cases.
-MyID and MyCOID as tools in enhance effective delivery system.
-Permanent Resident (PR) status granted to high skilled and talented expatriate more smoother.
-TNB will spend RM 5 bil to improve electricity services in 2010. Sabah Electricity Sdn Bhd as well will improve services.

1.2) Implementation of Privatization Initiatives
-Government will privatize companies under Ministry of Finance and other viable government agencies.

1.3) Enhancing Implementation of Public-Private Partnership Initiatives
-High impact projects by the private sector such as Integrated Immigration, Customs and Quarantine Complex (CIQ) in Bukit Kayu Hitam, construction of 6 UiTM campuses and the development of MATRADE centre will be undertaken jointly with the government.

1.4) Intensifying FDI
-Relaxed condition and simplified procedures for foreign companies to operate in Malaysia.
-Khazanah Bhd and Permodalan Nasional Bhd enhance collaboration with foreign investors in education, tourism and infrastructure.
-1MDB will establish a CSR fund totaling RM 100 mil as a start to finance community activities.

2) Intensifying R&D and Commercialization
The government will undertake the following measures:
a) Rationalizing all research funds and grants to be more effective to achieve set targets.
b) Establishing the National Invention Centre supported by a network of innovation excellence centre under the Ministry of Science, Technology and Innovation and in collaboration with the Ministry of Higher Education.
c) Integrating R&D activities with patents, copyrights and trademarks registration to ensure R&D&C processes are implemented more effectively. The cooperation between patent and research agencies will expedite the commercialization of research findings.
d) Providing SME with tax deduction on expenses incurred in the registration of patents and trademarks in the country.

3) Leveraging Fully On Niche Areas
3.1) Boosting Tourism Industry
-Government will allocate a total of RM 899 mil in 2010 to implement:
a) Attracting participants from UK, Japan, Republic of Korea, Middle East, India and China to participate in the MM2H program.
b) Upgrading the infrastructures in tourism centres such as ecotourism development and homestay facilities.
c) Ensuring front-liners are local.
d) Utilizing internet-based advertising to promote tourism activities.
e) Providing more attractive tourism products and events.
-To further promote medical tourism industry, income tax exemption of 50% on the value of increased exports will be increased to 100%.

3.2) Strengthening ICT industry
-Government will expedite the implementation of HSBB at a total cost of RM 11.3 bil, of which RM 2.4 bil from government and remain are from Telekom Malaysia.
-To increase broadband penetration, government proposes that individual tax payers be given tax relief on broadband subscription fee up to RM 500 from 2010-2012.
-Civil servants can apply for computer loans up to max RM 5000 once in every 3 years.

3.3) Intensifying Halal Industry
a) Formulate the Halal Act
b) To corporatize the HDC as an agency under MITI.
c) Intensify Halal certification by JAKIM.
d) An amount of RM 24 bil provided to developing the Halal products anti-smuggling system.

4) Advancing Agricultural Sector
-Government will allocate RM 6 bil for the agricultural sectors, where:
a) RM 137 mil to upgrade and drainage and irrigation infrastructures in paddy fields.
b) RM 70 mil provided in 2010 to implement the Paya Peda Dam project in Terengganu.
c) RM 82 mil will allocate to modernize the aquaculture industry and implement entrepreneurship training scheme for aquaculture breeders.
d) Allocation of RM 149 mil to develop food farming industry.
e) Allocate RM 58 mil to develop basic infrastructure of livestock farms and establish related supply chain.
f) Implement the incubator program to train and guide youths and graduates to be successful agro-entrepreneurs.
-FELDA, FELCRA and RISDA cooperate in establishing a consortium to implement various high impact projects in downstream and upstream industries. Which each of the authority contributing RM 100 mil and will be implemented at the end of 2009.
-MASKargo will upgrade air cargo facilities for export of perishable agricultural products.
-Government will provide subsidies, incentives and assistance amounting to almost RM 2 bil to safeguard farmers and fisherman interest.
-In 2010, more than RM 400 mil for paddy price subsidy, almost RM 300 mil for paddy fertilizer subsidy, almost RM 220 mil for incentives to increase paddy yield, production and rice subsidy, and additional RM 170 mil allocated to provide cost of living allowances and incentives to fisherman.

5) Promoting Construction Industry
-In 2010, RM 9 bil provided to finance infrastructure projects:
a) Provision of RM 4.7 bil for road and bridge projects as well as RM 2.6 bil for water supply and sewerage services.
b) Provision of RM 899 mil for rail facilities, RM820 mil for port and sea services as well as RM 276 mil for airport projects.

6) Strengthening SME
-Government will taking steps to consolidate SME funds and grants from earlier 79 totaling RM 8.8 bil to 33 and these funds will be coordinated by SME Corp.
-A sum of RM 350 mil for SME Corp, where RM 200 mil for SME soft loans, RM 100 mil for capacity enhancement, remain balance for branding and promotion. Interest rate charge will be same as development finance institutions.
-Government will ensure financial institutions approve micro financing at an average of 6 days and disbursement at an average of 4 days.
-Government will allocate RM 538 mil for the implementation of various SME development programs:
a) RM281 mil to state economic development corporation.
b) RM 200 mil to TEKUN, where RM 20 mil for small scale Malaysian-Indian entrepreneur. Besides, loan approval and repayment processes will be restructured to improve effectiveness.
c) RM 57 mil for the purchase of business premises, provision of infrastructure outside industrial areas and Skim Kilang Bimbingan through the SME Bank.

7) Developing Green Technology
-RM 20 mil provided to intensify green awareness activities.
-A fund amounting to RM 1.5 bil to provide soft loans to green companies, maximum financing is RM 50 mil for suppliers and RM 10 mil for consumer companies. Government will bear 2% interest rate.

7.1) Promoting Construction of Green Buildings
a) Building owners that obtaining GBI Certificates from 24 Oct 09 until 31 Dec 14 will be given income tax exemption.
b) Buyers purchasing buildings with GBI Certificates from developers will be exempt from stamp duty charges on instruments of transfer of ownership.

8) Promoting Creative Industry
a) Formulate a comprehensive Creative Industry Policy.
b) Establish RM 200 mil creative industry fund to finance related activities and will managed by BSN.
c) Launching grant of RM 3 mil to establish Tabung Kebajikan Penggiat Seni to ensure the welfare of artistes.

Glossary
NKRA: National Key Results Areas
MATRADE: Malaysia External Trade Development Corporation
FDI: Foreign Direct Investment
1MDB: 1 Malaysia Development Bhd
CSR: Corporate Social Responsibilities
SME: Small and Medium Enterprise
MM2H: Malaysia My Second Home
HSBB: High Speed Broad Band
HDC: Halal Industry Development Corporation
MITI: Ministry of International Trade and Industry
JAKIM: Department of Islamic Development Malaysia
FELDA: Federal Land Development Authority
FELCRA: Federal Land Consolidation and Rehabilitation Authority
RISDA: Rubber Industry Small Holder Development Authority
TEKUN: Tabung Kumpulan Usaha Niaga
GBI: Green Building Index

*Adapted from 2010 Malaysia Budget Speech by Prime Minister Najib