Abdullah Unveils A Generous Budget For All

KUALA LUMPUR, Sept 7 (Bernama) -- A Budget for all. That sums up the 2008 Budget unveiled by Prime Minister Datuk Seri Abdullah Ahmad Badawi today, which offers goodies to all segments of the Malaysian population, from kindergarten kids, civil servants and businessmen to senior citizens.
Totalling RM176.9 billion, the generous budget, an increase of 10.9 per cent from this year's, emphasises three main strategies -- enhancing the nation's competitiveness, strengthening human capital development and ensuring the well-being of all Malaysians.
Coming on the heels of the nation's 50th birthday just a week ago, the budget is aimed at countering the increasing cost of living through measures to raise the people's disposable income.
"As we enter the next 50 years, it is important that we leverage on the strength of our diversity and remain united in our quest towards achieving developed nation status," Abdullah, who is also Finance Minister, said when tabling the 2008 Budget in the Dewan Rakyat here.
Themed "Together Building the Nation and Sharing Prosperity", the budget also places weight on infrastructure development, including in Sabah and Sarawak.
The 2008 Budget also provides for a conducive investment climate for the private sector as it wants the nation's corporate tax regime to remain competitive.
To improve the efficiency and simplify the administration of corporate tax, the government will implement a single-tier tax system, effective from the year of assessment 2008, where profits are only taxed at the company level and dividends received are exempted from tax.
"The reduction in corporate tax (the government in the 2007 Budget announced a reduction of corporate tax from 28 per cent to 27 per cent in 2007, 26 per cent in 2008 and 25 per cent in 2005) and the introduction of the single-tier system will enable higher dividends to be distributed to share holders," said Abdullah, who is also Finance Minister.
The prime minister also announced several measures to be adopted by the Special Taskforce to Facilitate Business (Pemudah) in an effort to ensure a conducive environment to attract private investment.
To attract quality human capital, especially professionals and skilled workers, the government will encourage and facilitate the entry of foreign workers who can add value to the nation's economy.
To this end, the Immigration Department will shorten the processing period for the issuance of work permits to seven days for skilled workers, compared with 14 days previously.
A new category of visa for business travellers would also be introduced to provide for a longer validity period, apart from the introduction of other features to facilitate easier entry into the country effective Jan 1, 2008, he said.
Reflecting the importance of good corporate governance, the government would establish a Public Companies Accounting Oversight Board under the Securities Commission to monitor auditors of public listed firms to ensure quality and reliable audited financial statements.
The prime minister also touched on positioning Malaysia as an international financial centre, promoting investments from the Middle-East, the Takaful industry, increasing the competitiveness of Labuan as an Offshore Financial Services Centre and stimulating the property sector.
Not letting-up the push for the agricultural sector, Abdullah said several new sources of growth had been identified in this field, such as the pioneer project of virgin coconut oil processing, commercialising of nira nipah products and breeding of Boer goats.
To encourage the cooperation between bio-technology companies and local universities, Bionexus status companies would be allowed to use the laboratories and reserach facilities at these universities.
To further promote the Multimedia Super Corridor (MSC) internationally, Abdullah said, the government would host the World ICT Week in Kuala Lumpur in May, 2008.
Measures would also be taken to further enhance Cyberjaya's attraction as a major cyber city, able to attract world-class technology companies.
Recognising that the small- and medium-size enterprises (SMEs) may face cash flow constraints at the initial stages of operations, the prime minister said the government would give them flexibility to pay taxes at the end of the financial year instead of monthly instalments for a period off two years from starting operations.
Moving to the second thrust of the budget, the prime minister announced the abolishment of school fees for primary and secondary school students.
On top of this, the government would also provide free textbooks for all school-going children while giving an exemption of examination fees for the Sijil Tinggi Agama Malaysia. Last year the government waived the examination fees for PMR, SPM and STPM.
"With this (free textbooks scheme), 5.7 million students will benefit from this scheme compared with 4.5 million students currently. With these measures, schooling in Malaysia is now completely free," he said, to the thumping of tables by the MPs.
Abdullah said that to ensure that every student had the opportunity to participate in uniformed activities, the government would provide a set of free uniforms each for one activity for students from families with a monthly income of RM1,000 and below.
Recognising the important role of teachers, the prime minister announced an increase in the allowance for special education teachers from RM100 to RM250 per month, a rise in allowance for graduate substitute teachers from RM85 to RM150 per day and an allowance of RM60 per hour for degree holders and RM50 per hour for diploma holders teaching Chinese and Tamil languages in national schools.
Retired teachers, given their expertise and vast experience, can continue to contribute in the field of education. Retired teachers will therefore be recruited to train teachers and serve as substitute teachers," Abdullah said.
To strengthen higher education, a sum of RM12 billion has been provided for the implementation of projects and programmes, including enhancing research and development and commercialisation activities in four research universities and increasing the allocation to Universiti Teknologi Mara to achieve the target of 200,000 students by 2010.
The fund would also be used to upgrade and expand Universiti Malaysia Kelantan, Universiti Darul Iman and Universiti Pertahanan and to rebrand community colleges.
"The government will increase the number of undergraduate students sponsored by the Public Service Department at local universities from 5,000 students to 10,000 annually beginning 2008," Abdullah said.
Taking cognisance of the rising cost of living for students, the government will increase the cost of living allowance by between 23 per cent to 84 per cent to students in local institutions of higher learning, including those attending preparatory and language courses.
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