RCEP PACT

 Asia banks on RCEP trade megadeal for early COVID relief...

Read More Here...

BUDGET 2021 - ULASAN

THE 2021 BUDGET

1. For 2½ hours I sat down in my seat at the Dewan Rakyat listening to the Minister of Finance’s budget speech.

 

2. It was amazing. It was the biggest ever. For operation and development the Government will spend 322.5 billion altogether.

 

3. I am not a financier. These big figures are mind-boggling. It seems that the Government will be putting money in the pocket of everyone, rich and poor, employed and unemployed.

 

4. The question that I would like to ask is where the money will come from. The deficit is said to be about 85 billion Ringgit. It is bigger than the development budget of 69 billion.

 

5. We know that the COVID-19 pandemic has affected the economy badly. Although the glove industry has done well but Petronas and Tourism, the two biggest contributors to Government revenue, have done very badly.

 

6. All other industries have suffered badly. I don’t think income and corporate tax would amount to even 2/3 of the normal figures during normal times.

 

7. It is expected that vaccines would put an end to the pandemic. The industries, trade and business will recover. But can they recover fully so as to achieve a Gross Domestic Product (GDP) growth of 7.5%. Just think. From a shrinkage of 4% to growth of 7.5%, the recovery would be 11.5% – fantastic.

 

8. From the complaints I hear from the business community mere approvals would take more than a year. That means there would be practically no inflow of investment funds in 2021. Certainly, there would be no profits made, or taxes paid to the Government. Even local investors will meet with these delays.

 

9. Policies don’t grow economies. Only implementation will do so. I know of cases where multi-billion Ringgit projects have been delayed for years. If the investor pushed, he is likely to face even longer delays.

 

10. So don’t expect restarting or launching new industries to begin on the 1st of January. The rosy picture of immediate recovery once the COVID-19 pandemic is overcome is not going to happen. The pandemic would not end on new year’s day.

 

11. I suppose the Government will have to borrow to implement the budget. This is estimated to increase Government debt to 1.3 trillion. That is a lot of money. If you fail to service loans, you may be bankrupted.

 

12. I can understand the need but we can still prune the operation and development costs. In the last 15 years salaries had been increased at very high rates – as much as 25% each time. Ministers and members of parliament had been given numerous allowances. Such is the increase that everyone is keen to be members of Parliament and Ministers. Nothing will make them part with their position. Even when their leaders commit crimes, they will support them. Giving up their posts would deprive them of so much money. Principles don’t count anymore.

 

13. It is perhaps better to make these posts less lucrative.

 

14. This pandemic is affecting the poor the most. Those who have lost their jobs and the small traders have no income at all. They earn today for today. If they don’t then they will have no money to buy food even. They will starve.

 

15. On the other hand those who are paid high salaries continue to earn more than their daily needs. Of course, those who are paid high salaries, such as airline staff and business executives may also lose their jobs.

 

16. Dato Seri Shafie Apdal had suggested that Ministers should have their pay cut by 30%. That is a big figure. I think people earning high salaries in the Government or private sector should forgo 10% of their salaries. It is a sacrifice but I don’t think it would hurt them if there is a reasonable cut off point, say RM 20,000 p.m.

 

17. The money should be used to provide food to the unemployed and those without income.

 

18. Back to the budget. While the economic situation requires more money to be spent by the Government, the pandemic also affects the revenue for the Government.

 

19. When business do not do well, they would pay less tax to the Government. Indeed, when they fail to make profits, they would pay no taxes to the Government.

 

20. Government revenue must shrink during this pandemic. But the Government needs to offer stimulus packages. That cost a lot of money.

 

21. Additionally, Government has to service loans and also reduce the principals. For this RM35 billion would be needed. Total charge expenditure is RM72.3 billion or 30.6% of Operating Expenditure of RM236.5 billion.

 

22. I must admit to being frightened. It is a behemoth of a budget but can we raise the money to finance it. Government debt will be RM1.3 trillion. How do we pay.

 

23. The budget is for the Year 2021. The expectation of economic recovery is too optimistic. I can think of lots of other things which can be done to lower cost and increase income. But I suppose the Minister of Finance has considered all of them.

 

24. What is a fact is that most people are not happy. That is shown by their reaction.

 

25. I hope this budget would be modified in order to become more realistic. Then we can support it. We need not be bribed for our support. We do not want to precipitate a crisis.

 

http://chedet.cc/?p=3226

Budget 2021 Highlight

BUDGET 2021

KUALA LUMPUR: Finance Minister Tengku Zafrul Aziz tables the 2021 Budget today, a first for the Perikatan Nasional government since taking over Putrajaya in March this year.

According to Bernama and Reuters, a total of RM322.5 billion has been allocated for 2021, some RM7.8 billion more than the 2020 Budget worth RM314.7 billion.

Around RM236.5 billion has been allocated for operational expenditure, RM69 billion for development and RM17 billion for the Covid-19 fund.

Operational:

Emoluments – RM84.5 billion

Debt repayment – RM39 billion

Services and supply – RM32.8 billion

Pensions – RM27.7 billion

State governments – RM7.7 billion

Subsidies – RM18.7 billion

Others – RM25.8 billion

Development:

Economy – RM39 billion

Social – RM18.3 billion

Security – RM7.7 billion

General administration – RM3.8 billion

Covid-19 fund – RM17 billion

The top three goals for Budget 2021 are:

• welfare of the people
• business continuity
• economic resilience

Civil service

• Increase of allowance from RM6 to RM8 an hour for 1,900 volunteer firefighters
• One-off payment of RM500 for 40,000 recipients of the Pingat Jasa Pahlawan Negara
• Special RM600 for civil servants Grade 56 and below
• For retired civil servants and veterans with no pension, the government will provide RM300 special aid

Environment

• RM50 million to clean rivers of rubbish and waste
• RM40 million to strengthen enforcement and monitoring activities
• RM10 million for island waste management projects in Johor and Terengganu
• RM400 million for all states for biodiversity protection
• RM20 million for the hiring of 500 former soldiers and police, as well as Orang Asli, to patrol forests
• Government to build urban transformation centre in Lembah Pantai with the assistance of the private sector

Job creation and social issues

• RM100 million for NGOs involved in job creation, addressing social issues and environmental protection. This RM100 million grant will be matched with a RM100 million grant from GLCs
• RM2 billion to continue the Green Technology Financing Scheme 3.0
• Appointment of 100 new MACC officers

Sabah and Sarawak

• RM5.1 billion and RM4.5 billion to improve infrastructure, health and education facilities in Sabah and Sarawak respectively.

Economic corridors

• RM780 million for development projects in economic corridors in Johor, Kelantan, Kedah, Sarawak and Sabah
• Extension of tax incentives for economic corridors until 2022
• RM150 million for the supply of raw water to Melaka
• EPF to proceed with RM50 billion Kwasa Damansara development, which includes commercial and residential properties. It is expected to generate 100,000 jobs

Development

• RM15 billion allocated for transport infrastructure projects including Pan Borneo Highway, Gemas-Johor Bahru project and Klang Valley Double Track project
• Continuation of projects including the Rapid Transit System between Johor Bahru and Singapore and the MRT in the Klang Valley
• Government to proceed with High Speed Rail project, subject to discussions with Singapore
• RM3.8 billion for infrastructure projects including the construction of bridges and roads in several states

Sin tax

• Freeze on new import license for cigarettes
• Tightening of renewal of import licenses for cigarettes
• Restriction of transhipment of cigarettes to selected ports only
• Imposing of tax with drawbacks on all transhipped and reexported cigarettes
• Barring of all transhipment and export of cigarettes using pump boats
• Imposing tax on cigarette and tobacco products in all duty-free islands
• 10% excise duty on e-cigarettes and non-electronic cigarettes, including vape

Digital transformation

• RM1 billion for digital transformation scheme
• RM150 million in grants for the digitalisation and automisation of small- and medium-sized enterprises (SMEs)
• Nearly RM1.2 billion for microcredit schemes
• RM10 billion for Syarikat Jaminan Pembiayaan Perniagaan Bhd
• RM2.5 billion for G1 to G4 contractors for small and medium projects nationwide
• MARA to provide RM50 million in funding scheme for Bumiputera contractors

Tourism

• RM50 million for retraining programmes for 8,000 airline staff
• 500 jobs for Orang Asli and local communities to become tour guides in all national parks
• RM50 million for the maintenance and restoration of tourism facilities nationwide
• RM35 million for the Malaysia Healthcare Travel Council
• Special RM1,000 grant for traders, taxi drivers, e-hailing drivers and tour guides in Sabah
• Human Resource Development Fund levy exemptions for companies in the tourism sector and those still affected by Covid-19 for six months

Commodities

• RM20 million for sustainable palm oil certification programmes
• RM16 million for latex production incentives
• Government to open a furniture sector to create jobs in Pagoh

Agriculture

• RM50 million for organic agriculture project benefitting 1,000 communities
• RM150 million for modernisation of fishermen vessels
• RM60 million for modernisation programmes in the supply chain
• RM100 million for high-impact and high-value agriculture and livestock

Development of local products

• RM150 million for training programmes and assistance for 100,000 entrepreneurs
• RM150 million for the Shop Malaysia Online initiative
• RM35 million to promote Malaysia-made products
• Tax incentives for companies producing Covid-19 vaccines to invest in Malaysia

Science, Technology and Innovation

• RM400 million for selected ministries and agencies to carry out research and development (R&D)
• RM100 million for research into diseases, including vaccine development

Investments in primary sectors

• RM1 billion to encourage investments in technology, including R&D for the electronic and aerospace industries, among others
• RM500 million to support companies involved in advanced technology and innovation
• Tax incentives for certain industries will be extended to 2022
• RM1.4 billion to support the development of the domestic supply chain and increase the development of local products including medical devices
• RM3.7 billion to extend several schemes for maritime and logistics development, sustainable development, tourism infrastructure and public transportation sectors
• RM2 billion in targeted aid for SMEs

National defence

• RM16 billion allocated to defence ministry
• RM17 billion to home ministry
• RM2.3 billion to maintain military assets
• RM27 million to improve the country’s cybersecurity
• RM500 million for the construction of 1,000 homes for families of military personnel
• RM153 million for Rela

Transport

• RM300 million to expand the My30 unlimited travel pass to Penang and Kuantan, Pahang
• Government to introduce unlimited monthly travel passes at RM5 for students and the disabled. This includes train services in the Klang Valley as well as other parts of the country
• Tax exemption for the purchase of new buses

Housing

• Stamp duty exemption for first homes up to RM500,000
• RM1.2 billion for the provision of homes for low-income house buyers
• RM500 million for 14,000 PPR units
• RM315 million for 3,000 Rumah Mesra Rakyat
• RM125 million to repair dilapidated low-cost homes
• RM310 million for civil service homes
• Government to work with selected financial institutions for a rent-to-own scheme involving 5,000 PR1MA homes

RM50.4 billion for education

• RM50.4 billion for the education ministry accounting for 15.6% of the budget
• RM420 million for the Supplementary Food Programme for students
• RM725 million for dilapidated schools
• RM45 million for student welfare
• RM14.4 billion for the higher education ministry
• RM50 million to improve facilities and infrastructure at public universities
• RM50 million to upgrade internet connectivity in universities from 500Mbps to 10Gbps
• RM6 billion for technical and vocational education and training (TVET)
• RM300 million for loans for 24,000 TVET students
• RM29 million for TVET programmes for students at tahfiz and pondok schools

Digital connectivity

• RM1.5 billion to ensure internet connectivity for the B40 group in the form of credit of RM180 per person. This will benefit eight million people
• Telcos to provide RM1.5 billion worth of data
• RM500 million for Jendela initiative, to boost internet connectivity in schools
• RM7.4 billion for MCMC to increase broadband service in 2021 and 2022
• GLCs to contribute RM150 million to the Cerdik fund for the purchase of laptops for 150,000 students in 500 schools

Youth and sports

• RM1,000 per month for three months for employers who hire fresh graduates for apprenticeship programmes
• One-off RM50 e-wallet credit for those aged between 18 to 20 years old. This will benefit 1.5 million youths
• RM19 million for national health programmes to encourage healthier lifestyles
• RM103 million to build, upgrade and maintain all sporting facilities nationwide
• Tax exemption for sporting expenditure increased from RM2,500 to RM3,000

Rural development

RM2.7 billion for rural infrastructure projects. This includes:

• RM1.3 billion for roads
• RM632 million for water supply
• RM250 million for electricity supply
• RM355 million to build new houses and repair dilapidated houses
• RM121 million to construct 27,000 lamp posts

Tax exemption and essentials goods

• 1% decrease in income tax for those earning between RM50,000 to RM70,000 per year
• RM20 million to establish community centres for children to be looked after when school session ends
• RM170 million for early childhood education under KEMAS
• Tax exemption for companies who hire senior citizens
• Tax exemption for disabled couples increased from RM3,500 to RM5,000
• RM158 million for social and development programmes for the Orang Asli community, including the establishment of 14 new playschools
• Extension of tax exemptions for companies who hire former convicts and drug addicts
• RM50 million for repair and maintenance of houses of worship under local councils
• RM100 million to empower the Indian community’s socio-economic development
• RM177 million to the Chinese community for education facilities and new villages
• RM30 million to establish kindergartens in government buildings especially hospitals
• RM21 million to set up social support centres
• RM95 million allocated to microcredit financing for women entrepreneurs
• RM500 one-off payment to religious teachers and leaders (takmir), expected to benefit nearly 70,000 people
• RM1.4 billion allocated to the prime minister’s department for Islamic affairs
• RM4.6 billion allocated to empower Bumiputera entrepreneurs
• This includes RM6.5 billion to universities catered towards Bumiputeras
• RM1 billion allocated for reskilling and upskilling programmes
• Government allocates RM2 billion to continue Penjana Kerjaya programme under Socso
• Government to allocate 1.5 billion to extend wage subsidy programmes for another three months, particularly in the tourism sector
• RM3.7 billion for Skim Jaminan Penjanaan Pekerjaan (JanaKerja) to create jobs and improve skills
• RM400 million to abolish Felda settlers’ interest debts
• Fishermen allowance to increase to RM300 a month
• RM200 million allocated for distribution of essential goods

EPF contribution for employees reduced from 11% to 9% for 12 months beginning January 2021

• RM24 billion for Socso’s employment injury scheme. Delivery riders will also be included in this scheme
• RM3,000 tax exemptions for contributors to private retirement schemes
• EPF to allow contributors to withdraw from Account 2 to purchase insurance
• Government to allow contributors to withdraw RM500 a month from their EPF Account 1 for 12 months from January 2021
• RM150 million allocated to extend Socso’s job search allowance for three months

Covid-19 and public health

The Covid-19 fund ceiling to be raised to RM65 billion

RM1 billion to curb Covid-19 in the following ways:

• RM475 million for equipment and supplies for the health ministry
• RM318 million for frontliners’ PPEs and hand sanitisers
• RM150 million for the National Disaster Management Agency
• RM50 million to purchase equipment, laboratory supplies and medicine in university hospitals
• One-off payments of RM500 to frontliners
• RM24 million for mental health programmes
• Tax exemption of up to RM1,000 for medical treatment expenses involving vaccination
• Tax exemption of up to RM8,000 for treatment of serious diseases
• Tax exemption of up to RM1,000 for health screenings
• Tax exemption of up to RM8,000 for medical treatment, necessities and care for parents
• MySalam and Perlindungan Tenang voucher programme for the B40 to be expanded.
• RM90 million for pneumococcal immunisation programme for children.
• Aid for OKU increased to RM300 million
• Aid for senior citizens increased to RM500 million
• Allowance for OKU workers increased to RM450 million
• In total, RM2.2 billion allocated for monthly welfare aid, which will benefit over 400,000 people

FGV expecting RM3.5 - 4.0 Bil on early LLA ending with Felda?

How will FGV fare on early 

LLA ending with Felda? 

READ MORE HERE