Budget 2017 Highlights

The Edge Market

21 October 2016

BUDGET 2017 HIGHLIGHTS

  • Budget 2017's allocation stands at RM260.8 bil is up 3.4% from recalibrated Budget 2016
  • Putrajaya allocates RM214.8 bil for Operating Expenditure, with RM46 bil for Development Expenditure
  • Under Development Expenditure, the economic sector will receive the highest share of RM25.9b, followed by social sector with RM12.2b
  • RM103.9b allocated for fixed charges and grants; RM691m for purchase of assets; RM816.6m for other expenditures
  • Govt expects to achieve a fiscal deficit target of 3% of GDP
  • The security sector will be allocated RM5.3b; the general administration more than RM2.5b; contingencies will get RM2b
  • Malaysia, in diversifying sources of economic growth, has reduced dependency on O&G sector from 41.3% in 2009 to 14.6% in 2016
  • 2017 revenue collection to expand at about 3% to RM219.7b
  • GST collection has reached nearly RM30b as of 19 October 2016
  • Approved FDI in 1H16 totalled RM28b, up 32% from 1H15, says Najib
  • Bereavement Scheme of RM1,000 compensation to the next of kin of BR1M recipients will continue
  • RM4.6b allocated to technical and vocational education and training institutions to enhance technical and vocational education and training education capacity
  • Govt to provide vacant lands at strategic locations to GLCs & PR1MA to build more than 30k houses priced between RM150k-RM300k
  • Private firms to get double tax deduction on expenses incurred to provide Structured Internship Programme for students under technical and vocational education and training
  • Over 12k PR1MA homes worth RM3.3b has been booked, with 85k units at various stages of approval
  • PR1MA financing to get "step-up": buyers to get loan up to 90%-100%; loan rejection rate to be reduced drastically
  • Lifestyle tax relief extended to include purchase of printed newspapers, smartphones & tablets, internet subscriptions & gym membership fees.
  • Stamp duty exemption increased to 100% on instruments of transfer & housing loan instruments, to help reduce cost of first home ownership
  • Stamp duty exemption limited to houses priced up to RM300k, for 1st home buyers only, between Jan 1, 2017 and Dec 31, 2018
  • Collection Intelligence Arrangement (CIA) to be established under @MOFmalaysia to raise efficiency of revenue collection
  • RM1.2b allocated to Ministry of Youth and Sports for sports development
  • Govt to implement various rakyat-centric, national interest projects funded by Private Finance Initiative: allocation RM10b
  • SOCSO Scheme to be introduced for taxi drivers with monthly income up to RM3k; launching grant: RM60m
  • RM1.3b allocated to raise food production at a competitive price
  • RM25b allocated for implementation of various healthcare programmes and projects
  • Govt to provide one-off grants worth RM200k for purchase of haemodialysis equipment; total allocation RM40m
  • RM110m to be allocated - RM70m for medical assistance - to benefit about 10,000 poor patients
  • Govt to provide grant of RM5k to buy new vehicles, offer individual taxi permits; total allocation RM60m
  • To help B40 generate additional income, govt to encourage their participation as ride-sharing schemes like Uber. M40 group's household income ranges between RM3.9k-RM8.3k.
  • For those who don't own a vehicle, down payment will be made using BR1M; rebate of RM4k given to buy Proton Iriz
  • Private sector development expected to expand 8.1% to RM230b in 2017
  • RM2.1b allocation for infra & socioeconomic development at: Iskandar Msia, NCER, ECER, SDC & SCORE
  • RM522m allocated to MIDA; focus industries are chemicals, electric & electronics, R&D
  • Govt-linked investment firms to allocate special fund of up to RM3b to potential firms.
  • Capital Market Research Institute to be set up, with initial funding RM75m from Capital Market Development Fund
  • Malaysia now considered an upper middle-income country — Najib
  • No increase in GST for 2017 - PM Najib
  • This govt has delivered, is still delivering and will continue to deliver - Najib
  • There are three main categories of rakyat in our country; T20, M40 & B40
  • B40 refers to the bottom 40% of households with monthly income of RM3,900 and below
  • Govt will never allow Malaysia to become a failed state - PM Najib
  • 97k street lights & 3k LED lights will be installed at crossroads for 7.5k villages nationwide
  • 616km of village roads & bridges to be built & upgraded with an allocation of RM1.2b
  • RM50m allocated to extend GLCs' SL1M programme to 20k grads in 2017 vs 15k grads in 2016
  • Govt to build 10k houses in urban areas for rental to eligible youths with permanent jobs, including young grads entering labour market
  • Existing tax reliefs, the purchase of reading materials, computers and sports equipment be combined as lifestyle tax relief
  • Only 2.1 million income tax payers out of 14.6 million of country's total workforce
  • For civil service: Govt extends fully paid study leave with scholarship to the support group, currently limited to management & professional group
  • Quarantine leave up to 5 days without record to public servants whose children are ill & are quarantined
  • Computer loan facility extended to purchase of smartphones for public servants; they can use this once every 3 yrs; limited to RM5k
  • Motorcycle loan facility limit available for public servants raised from RM5,000 to RM10,000
  • Civil servant’s housing loans to be raised to RM200,000 and RM750,000, from RM120,000 and RM600,000
  • Govt will complete 30k units of Perumahan Penjawat Awam 1Msia, to be sold between RM90k & RM300k; i.e. 20% below market price
  • Contract of service/contract for service officers, expiring at end-2016, to be extended at least 1 yr
  • Fitch had rated Malaysia with A-, similar to that of advanced and larger economies such as Republic of Korea (AA-), China (A+), Taiwan (A+), Japan (A). 86. This means, bankruptcy is never in Malaysia’s economic dictionary, PM Najib
  • To address issue of specialist docs exiting & promotion delays, Grade 56 introducd btwn Grade54 & JUSA C for medic & dental specialists
  • The 1st group of doctors, dentists & pharmacists to be appointed on contract latest by Dec 2016 due to constraint in permanent posts
  • About 2,600 doctors without housemanship will now serve on contract
  • Stamp duty on instruments of property transfer worth over RM1m to be raised to 4% from Jan 1, 2018
  • For households in the e-Kasih database with a monthly income below RM3,000, BR1M will be increased to RM1,200 from RM1,050 and RM1,000
  • For households earning between RM3,000 and 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
  • BR1M is not animal feed neither bait, rather it is a sincere assistance from the government, says Najib
  • RM1.3b allocation for paddy farmers to subsidise price, seeds and fertilisers, including hill paddy
  • In next 2 yrs, fixed line broadband speed will be doubled while price will be halved
  • To ensure higher education is on par with global standards, RM7.4b is allocated for 20 public universities
  • For households in the e-Kasih database with a monthly income below RM3,000, BR1M will be increased to RM1,200 from RM1,050 and RM1,000
  • 2017 declared Startup & SME Promotion Year
  • RM75m for implementation of programmes under SME Master Plan to promote SME development
  • 2% rebate given on interest rates charged to SME borrowers under SJPP scheme
  • For SMEs: income tax reduction by stages based on percentage increase in income, compared with previous year of assessment
  • For SMEs: Tax reduction of 1 percentage point (ppt) for a rise of between 5% and 10% in chargeable income; 2 ppt for a rise of between 10% and 15% rise; 3 ppt for a rise of between 15% and 20%, and 4% for a rise of 20%
  • Up to RM1k tax relief introduced for breastfeeding equipment to support working women who're still breastfeeding
  • Home Affairs Ministry to get RM12.8b allocation, including RM8.7b for Royal Malaysia Police
  • RM30m for women to undergo mammogram screening, get Human Papilloma Virus vaccination to prevent cancer, for free
  • 15% discount to be given on full settlement of PTPTN debt, 10% on half payment, 10% via salary reduction/direct debit
  • RM200m from Working Capital Guarantee Scheme (WCGS) Fund will be allocated for startups
  • Schooling Assistance Programme of RM100 each for students from families earning up to RM3k, benefiting 3.5m students
  • RM1.8b provided for defence asset maintenance, like aircraft, patrol vessels, communications equipment, buildings, weaponry
  • Govt to launch series of national discourse to chart the nation direction on new canvas, the 2050 National Transformation (TN50)
  • TN50 will span 30 years to form a nation state of calibre, with par excellent mindset
  • There will be a special assistance of RM500 to all public servants; special payment of RM250 for govt retirees
  • Govt will amend Bankruptcy Act 1967 from early next year, concerning those declared bankrupt especially ‘social guarantors’. Details to be announced soon.
  • JAKIM will raise monthly allowance of Imam from RM750 to RM850
  • RM85m allocation for PERMATA prog involving 50k children, including the establishmt of Top STEM Talents Excellence Centre
  • RM4.6b is allocated to all states under the Malaysian Road Records Information System to maintain state roads
  • TN50 will be kick-started by young generation of all races via national discourse to be conducted by Youth & Sports Ministry, under Najib's patronage as PM
  • Water Supply Fund to be set up immediately with allocation of RM500m to address country's water supply issues
  • Book vouchers to be replaced with RM250 student debit card to buy books, computer accessories, internet access
  • MCMC to provide free tablets to 430,000 teachers; allocation RM340m
  • To encourage youths to make long-term investments, govt to introduce Private Retirement Scheme (PRS)
  • To help improve rakyat’s income opportunities, especially the B40, RM275 million is allocated
  • RM45m to expand MySuria Prog (RM45m) to instal solar panels in over 1.6k houses
  • RM30m to expand Mobilepreneur Prog by GIATMARA, targeting 3k participants using motorcycles
  • eUsahawan and eRezeki progs under MDEC to be revitalised with RM100m
  • RM460m allocated to provide electricity supply in rural areas, targeting about 10k houses
  • 69 flood mitigation plans will be continued nationwide with allocation of RM495m
  • Housing ministry to build 9,850 houses under People’s Housing Prog (PPR) with RM134m allocation
  • Govt to implement MyBeautiful New Home initiative, especially for B40 with an allocation of RM200m
  • MyBeautiful New Home initiative: Initially, 5,000 units will be built with prices ranging from RM40,000 to RM50,000 per unit
  • RM10b for subsidy comprises fuel subsidies including cooking gas; toll charges; public transport; and various incentives

Web source: http://www.theedgemarkets.com/my/article/budget-2017-highlights