Saturday, October 16, 2010

Important Point of Malaysian 2011 Budget by Encik Ketam

2011 budget will emphasize efforts to transform the nation into a developed and high income witg inclusive and sustainable development, spearheaded by the private sector as well as focus on the well-being of the rakyat

With the theme “transformation towards a developed and high income nation”, the 2011 budget will centre on the following four key strategies:

First: reinvigorating private investment
Second: intensifying human capital development
Third: enhancing quality of life of the rakyat
Fourth: strengthening public service delivery


The government has been assuming a significant role in driving economic growth since the financial crisis in 1997/98. The time has come for the private sector to resume its role as the engine of growth. In this context, the government announced and strategiesd that the 10MP commencing in 2011 will emphasize the role of private sector.

In 2011, private investment is estimated to expand 12.5% to RM86 billion. The implementation of the 12 National Key Economic Area (NKEA) is expected to create 3.3 million job opportunities.

The private sector will finance 92% of the NKEA and the remaining by the government

Public-Private Partnership Initiatives

Government will further intensify the Public-Private Partnership initiative to enhance private sector involvement in economic activities

Government will provide allocation as a tipping point for infrastructure support to ensure viability of private sector-led projects

Several PPP projects identified under the 10MP will be implemented in 2011 through private investment of RM12.5 billion. The government will allocate RM1 billion from the Facilitation Fund. Among the PPP projects are:

First: Construction of highways such as the Ampang-Cheras-Pandan Elevated Highway, Guthrie-Damansara-PJ Highway, Pantai Barat-Banting-Taiping Highway

Second: Construction of a 300-megawatt combined-cycle gas power plant in Kimanis, Sabah to increase electricity generation capacity to meet rising demand

Third: development of projects such as the International Islamic University Malaysia Teaching Hospital in Kuantan, Pahang, the Women and Children’s Hospital as well as the Integrated Health Research Institute Complex in KL

To promote Malaysia as a shopping haven in Asia by providing branded goods at competitive prices, the government proposes that import duty on approximately 300 goods preferred by tourist and locals, at 5% to 30% be abolished.

Such goods are apparel, handbags, shoes, shampoo, suits, children’s apparel, wallets, hair colourants, golf balls, imitation jewellery, talcum powder, curtans, table cloth, blankets, bed sheets, shirt, undergarments, lingerie, nightwear, perfumes and mosquito netting

The government will extend the investment allowance period for the last mile broadband service providers. In addition, import duty and sales tax exemption on broadband equipment are also extended for two years until 2012

Currently, ordinary mobile phones are subject to 10% sales tax but mobile phones with various applications such as internet and personal digital assistant (PDA) are exempted from sales tax. For the purpose of streamlining tax treatment, the government proposes that sales tax be exempted on all types of mobile phones.

A quality, skilled, knowledgeable, creative and innovative human capital is a perquisite towards achieving a developed and high income nation. As such, education and training will be restructured and strengthened. For this, a sum of RM29.3 billion is allocated for Ministry of Education, RM10.2 billion for Ministry of Higher Education and RM6727 million for the Ministry of Human Resource

Government also allocates RM111 million for PERMATA programme, including the construction of the second phase of Sekolah PERMATA Pintar School Complex, 32 PERMATA Children Centres (PAPN) and financing operations of 52 completed PAPNs as well as continuing PERMATA Pintar, Seni, Insan and Remaja Programmes

Every child regardless of race is a national asset and a future leader. Education must be apolitical. Towards this, the government allocates RM250 million for development expenditure to religious schools, Chinese-typ3e schools, Tamil National schools, missionary schools and Government-assisted schools nationwide.

To provide competent and quality teachers and instructors to better guide and educate students, the Government allocates RM576 million in the form of scholarships for those wishing to further their studies

The National Wage Consultation Council will determine the rate and mechanism of minimum wage. The basic salary of postmen was raised to RM710on 1 July 2010 from RM610. The government will enforce basic minimum wages for security guards

Government will continue to reduce the number of foreign workers by increasing in stages the levy according to sector. It is also mandatory for employers to procure health insurance for their foreign workers

Government allocates RM 30 million, among other, to introduce the Single Mother Skill Incubator Programme and the Prime Entrepreneur and Woman Activist Award in conjunction with Women’s Day commencing 2011.

The government will allow flexibility to self-determine fully-paid maternity leave, not exceeding 90 days from the current 60 days.

Developing National Sports

A sum of RM365 million is allocated to the Ministry of Youth and Sports

To develop football, government will establish a Football Academy in Pahang with an allocation of RM20 million to produce quality and highly skilled football players

Assisting the Less Fortunate

RM1.2 billion to the Ministry of Women, Family and Community Development

First: Welfare assistance for senior citizens with an allocation of RM166 million. This group is estimated to increase to more than 15% of the total population by 2030

Second: Children’s assistance programme with an allocation of RM121 million to enable them to receive quality childcare and early education. This programme will benefit 97’000 children

Third: Assistance programme to benefit 80’000 disabled individuals with an allocation of RM218 million

Fourth: excise duty exemption be increased from 50% to 100% on national vehicles purchased by the disabled

Fifth: construction of an intervention centre for the homeless by providing employment opportunities, housing facilities and counseling

Since 2008, government provided a rebate on electricity bill payment for monthly consumption of below RM20. The rebate has benefited more than one million consumers nationwide. Government will continue this rebate programme with an allocation of RM150 million to ease burden of the low-income goup

Governmentproposes that te existing tax relief of up to a maximum of RM5000 be extended to cover other expenses such as day care centre, cost incurred to employ caretakers for parents and other daily needs such as diapers

Increasing house ownership

A sum pf RM 568 million is provided to build 300 units under Projek Bantuan Perumahan Bandar, 79’000 units under Program Perumahan Rakyat and 8’000 units under Projek Bantuan Rumah Sewa

To assist estate workers to own house, government will provide Skim Pembiayaaan Perumahan Kos Rendah with an allocation of RM50 million.

The scheme is open to all Malaysian permanent estate workers to assist them to obtain housing loans with a maximum of RM60,000 for the purchase of low cost houses at 4% interest rate and repayment period up to 40 years extending to the second generation.

For young adults with income less than RM3,000, the government will introduce Skim Rumah Pertamaku through Cagamas Berhad which will provide a guarantee on down payment of 10% for houses below RM220,000. This scheme is for first-time house buyers with household income less than RM3,000 per month. In other words, the house buyers will obtain a 100% loan without down payment.

Government will allocate RM974 million as price subsidy for paddy, fertilizers and paddy seeds.

Reducing transport cost

Toll rates in four highways owned by PLUS Expressways Berhad will not be raised for the next five years, effective immediately.

Health care

RM15.2 billion is allocated to construct new hospitals, increase the number of doctors and nurses as well as to obtain supplies of medicines and equipment.
Combating Crime

Government will allocate RM350 million to implement various programmes to combat crime, including burglary, motorcycle and car thefts as well as promoting safe townships and voluntary Patrol scheme in high-risk areas. The government will establish an additional 25 special courts to expedite prosecution.

Preservation of Environment

the Government will allocate RM1.9 billion to finance environmental projects, including implementing of Life Programme and greening of Kuala Lumpur. The government will also undertake efforts to preserve marine sources and coastal areas including Pantai Siring in Melaka, Pantai Sabak in Kelantan, Teluk Lipat in Terengganu and Rompin in Pahang.

Appreciating Civil Servants

The Government will reduce the burden of civil servants in coping with schooling expenses by providing a Special Financial Assistance amounting to RM500. This assistance will be provided to all civil servants Grade 54 and below, including contract officers and retirees. The payment will be made in December 2010.

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