Budget 2009 (Upadated)

Gov't to spend record RM208 bil for 2009
The total expenditure was set at RM207.9 billion for 2009 compared to RM176.9 billion in 2008.
Of this amount, RM154.2 billion is for operating expenditure, while RM53.7 billion is for development expenditure.
In 2008, the operating expenditure was RM128.8 billion and RM48.1 billion for development expenditure.
Budget deficit up
The budget deficit is estimated to be 3.6 percent of GDP in 2009 and 4.8 percent of GDP in 2008.
Abdullah had in the previous year’s budget speech forecast a deficit of 3.1 percent for 2008.
Economic growth slowing
GDP growth for 2009 is estimated at 5.4 percent and 5.7 percent for 2008. The most recent official forecast is for GDP growth in 2008 is 5 to 6 percent.
Additional income tax rebate
Those earning below RM35,000 per annum will get rebate of RM400 compared to RM352 previously.
Those earning between RM35,000 to RM50,000 per annum will get a one percentage point reduction in their marginal tax rate to 12 percent from 13 percent previously.
Those in the highest bracket of RM250,000 per annum will get a similar reduction to 27 percent from 28 percent previously.
Free electricity
Those whose use less than RM20 of electricity per month will not be charged.
Bonus for civil servants
Government servants will get one-month bonus.
Those from Sabah and Sarawak will get free airfares to go home every two years, beginning January 2009.
Special allocations for Sabah, Sarawak
Sabah to get an additional allocation of RM580 million for upgrading infrastructures, while Sarawak will get RM420 million.
Hike in cigarette taxes
Excise duty will rise by 3 sen per stick from 15 sen to 18 sen. There was no increase last year.
Staff training incentives
Firms can claim working capital allowance for upgrading their staff skills.
Toll charges for buses slashed
Toll charges for buses to cut by 50 percent for the next two years. The government will spend RM45 million to compensate toll operators for this.
To improve public transportation, the government has allocated RM35 billion in the next five years.
Benefits for transport operators
Government to provide RM3 billion in soft loans under public transportation fund to be administered by Bank Pembangunan to finance acquisiton of buses and rail assets.
Government will also reduce toll charges for all buses for 2 years beginning 15 Sept 2008.
Eligibility criteria for welfare help raised
The eligibility criteria will be raised to RM720 per month of household income from RM400 previously for Peninsular Malaysia.
The eligibility criteria will be raised to RM830 per month of household income for Sarawak and RM960 for Sabah.
Low-income pensioners to get more
Those who have serve for at least 25 years will get pension of at least RM720 permonth.
Interest income exempted
Interest income of 5 percent on fixed deposits with banks exceeding RM100,000 to be exempted.
Import duties cut or removed
Government to reduce import duties on various consumer durables from between 10 to 60 percent to between 5 and 30 percent. This includes blenders, rice cookers, electric kettles.
Government to fully exempt import duty on several food item, i.e. vermicelli, biscuits, fruit juices, canned sweet corn.
Diesel-engine vehicles to benefit
Government to reduce road tax on private passenger vehicles with diesel engine to the same level as petrol engines.
Incentives for food security
From the RM5.6 billion provided under the National Food Security Policy for the 2008 to 2010 period, the government will in 2009 allocate RM300 million to increase fish landings and RM1 billion for padi farmers to increase production.
Poultry farmers will also get incentive in the form of a reinvestment allowance of 60 percent for a period of 15 years for expansion of chicken and duck farms to increase poultry output.
Funds for fertilisers and pesticides
Allocation of RM475 million in the form of agricultural inputs, fertilisers and pesticides to assist padi farmers.
Help for low-cost housing
Allocation of RM330 million for 4,400 units of Program Perumahan Rakyat, 1,500 units of PPR Bersepadu and 600 units of PPR Dimiliki. In addition, Syarikat Perumahan Negara Bhd to build 33,000 low-cost houses.
Stamp duties for home owners slashed
Purchase of medium-cost houses up to RM250,000 to get 50 percent reduction in stamp duty on transfer document and loan agreement.
More for public education
Education Ministry to get RM31 billion allocation to benefit 5.8 million students, RM1.6 billion to finance additional posts created following the opening of 26 primary and 41 secondary schools and the additional expenditure for maintenance, food assistance, scholarship, per capita grant and new equipment.
Government to build 110 new primary and 181 new secondary schools.
Higher Education Ministry to get RM14.1 billion, of which RM8 billion is for operating expenditure of public institutions of higher learning, RM4.4 billion for development expenditure and RM627 million for polytechnics and community colleges.
Additional sums for growth corridors
To utilise RM6 billion out of the RM10 billion additional allocation from the mid-term review of the Ninth Malaysia Plan.
Cheaper hybrid cars
100 percent importy duty and 50 percent excise duty on new hybrid CBU cars, with engine capacity below 2,000cc will be given to franchise importers.
The exemption is for two years to prepare for the local assembly of such cars.
Tax exemptions for Islamic capital markets
Tax exemption to be given for three years on fees and profits earned by institutions undertaking activities relating to the arranging, underwriting, distributing, trading on non-ringgit sukuk.
Police to get more funds
Allocation of RM5.4 billion to enhance the Royal Malaysian Police.

What’s not in 2009 Budget

No lowering the Employee Provident Fund contribution.

No hike in gambling taxes or alcohol duty.

No increase in the number of food items under price control.

KUALA LUMPUR, Aug 29 (Bernama) -- The government today tabled Budget 2009 which focuses on measures to maintain the well-being of Malaysians that has been enhanced over the last 51 years since independence, by seeking to strengthen the nation's economic resilience to mitigate the adverse impact of an increasingly challenging external environment.
"Today, as we face a global environment of higher prices and slower economic growth, I am confident, if we remain united, we shall overcome this challenge as well," said Prime Minister Datuk Seri Abdullah Ahmad Badawi when tabling in the Dewan Rakyat next year's budget carrying the theme of "A Caring Government".
The strategies formulated demonstrate that the government was responsive to the concerns of the people and had taken measures to lighten the burden of all Malaysians, particularly the lower income group, he said.
The approach taken was focused towards support and assistance, which not only improved the quality of life but also enabled all Malaysians to enhance their productivity, he added.
The budget was also in line with the medium-term plan as articulated in the National Mission and the Ninth Malaysia Plan (9MP) to further develop the nation towards Vision 2020.
Abdullah, who is also the Finance Minister, proposed for next year's budget an allocation of RM207.9 billion, of which RM154.2 billion was for operating expenditure and RM53.7 billion for development expenditure, and said the budget focused on the three specific strategies of ensuring the well-being of Malaysians, developing quality human capital, and strengthening the nation's resilience.
He said that in ensuring the well-being of the people, the government would ensure that all Malaysians would continue to benefit from the country's economic growth.
"The government will implement a broad range of measures to reduce the impact of the higher cost of living, particularly among the lower income group and the vulnerables," he said.
As in previous budgets, the government empathised with the difficulties faced by the lower income group, he said and announced that the government had raised the eligibility criteria for welfare assistance under the Welfare Department from a monthly household income of RM400 to RM720 for Peninsular Malaysia, RM830 for Sarawak and RM960 for Sabah.
Abdullah said the government recognised the contributions of pensioners towards the development of the country, and in assisting the lower income pensioners cope with the recent price increases, government pensioners who had served at least 25 years upon retirement would be given a pension of not less than RM720 per month from Jan 1 next year.
The prime minister said the government had always assisted victims of calamities, such as floods and fire, and would now set up a special fund of RM25 million to channel timely financial assistance to families deprived of their sources of income, particularly arising from accidents to breadwinners.
Efforts to eradicate poverty remains an important government agenda in Budget 2009. Abdullah said the government was confident that hardcore poverty would be eradicated by 2010.
He also said that the government would continue to implement programmes to enhance income, as well as provide skills and career development training under the "Skim Pembangunan Kesejahteraan Rakyat" programme.
Abdullah said the government proposed an allocation of RM220 million for the "Program Lonjakan Mega Luar Bandar" rural development programme being implemented in Pulau Banggi, Sabah, and Tanjung Gahai in Kuala Lipis, Pahang, which would benefit 13,300 households.
The provision of housing for the poor was being stepped up with the government proposing a RM50 million allocation to build 1,400 houses and repair 1,000.
Abdullah said priority would be given to senior citizens, the disabled and single parents with many dependents as well as victims of natural disasters.
He also said that hardcore poverty in Sabah and Sarawak was also being given attention in the budget. He said measures would continue to be taken to increase income and enhance the quality of life of Malaysians in the two states by improving basic amenities, such as electricity, water and rural roads.
For this, RM580 million and RM420 million were being allocated for Sabah and Sarawak, respectively, he said.
Abdullah also said that as part of the government's effort to further reduce the financial burden of the lower income group, households which incurred monthly electricity bills of RM20 or less would not have to pay for electricity for the period of Oct 1 2008 to the end of 2009.
A total of 1.1 million households would benefit from this measure which would cost the government RM170 million for the period, he added.
Abdullah said that realising that higher inflation rate had also affected the purchasing power of the lower middle-income group, the government proposed that the current tax rebate of RM350 per person be increased to RM400 for those with taxable income of RM35,000 and below. With this increase, some 100,000 tax payers would be out of the tax net, he added.
Additionally, to reduce the tax burden of individuals, especially those dependent on interest income from savings, the government proposed that all interest income for individuals be tax exempt.
To mitigate the impact of rising prices on consumers, the government proposed to reduce import duties on various consumer durables from between 10 per cent and 60 per cent to between five per cent and 30 per cent. These included blender, rice cooker, microwave oven and electric kettle.
Abdullah also said that the government would reduce the road tax on private passenger vehicles with diesel engines to be the same as those with petrol engines effective Sept 1 this year as, currently, private passenger vehicles with diesel engines owned by individuals and companies were subject to a higher road tax compared with those with petrol engines.
The prime minister said the primary strategy of Budget 2009 was to focus on measures to make employee welfare a priority. He said that to encourage the private sector to give employee welfare priority, the government proposed that the travel allowance for commuting to work provided by employers be given full tax deduction while the employees receiving such an allowance be given tax exemption of up to RM2,400 per year.
Abdullah said the government proposed to extend the tax exemption on medical benefits by employers to include maternity expenses. In addition, he said, given the growing acceptance of traditional medicine, namely acupuncture and ayurvedic, the government also proposed an extension of tax exemption to cover such medical benefits.
The prime minister said that to assist civil servants with young children, the government proposed to raise from RM2,000 to RM3,000 from Jan 1 next year the eligibility criteria of monthly household income for those households provided with the RM180 monthly subsidy towards nursery fees.
He also said that the free return air fares to home states, between Peninsular Malaysia and Sabah and Sarawak, enjoyed by government servants once every two years to foster closer family ties would be provided every year from Jan 1 next year.
Abdullah said the government would continue to encourage greater utilisation of public transportation, in the context of improving the productivity and quality of life.
"I believe a more efficient, reliable and integrated public transportation, which provides seamless travel and greate frequency of services, is required," he said.
The prime minister said RM35 billion would be expended between 2009 and 2014 to further improve the efficiency of public transportation, which included projects to enhance the capacity of existing rail services, build new rail tracks, increase the number of buses, as well as provide better infrastructure facilities.
Besides increasing the number of RapidPenang buses to 350 next year, he said, the Light Rail Transit (LRT) system in the Klang Valley would be extended by 30 km, that is 15 km respectively for the Kelana Jaya and Ampang lines.
"Upon completion in 2011, the extensions are expected to benefit 2.6 million residents in the Subang Jaya-USJ and Kinrara-Puchong areas, compared with 1.9 million currently," he said.
Abdullah said a new LRT line would be built along a 42-km route from Kota Damansara to Cheras, with a capacity exceeding 300,000 passengers daily when completed in 2014.
He also said that Keretapi Tanah Melayu (KTM) Berhad commuter rail services would be upgraded through the rehabilitation of the existing 20 Electric Multiple Units (EMUs), which was expected to be completed next year, and the addition of 13 new units of EMUs by 2011.
The 7.5-km Sentul-Batu Caves rail track was under construction and was expected to be completed by 2010, he added.
To provide facilities for inter-urban taxis and buses from the northern region, a new integrated terminal would be built, he said, adding that the terminal would contribute towards further reducing traffic congestion in the heart of Kuala Lumpur.
Abdullah said the government would continue to help reduce the operating costs of public transport operators.
Besides the recent increase in the quota for diesel subsidy, the government would provide a soft loan facility of RM3 billion under the Public Transportation Fund, administered by Bank Pembangunan Malaysia Bhd, to finance the acquisition of buses and rail assets, he said.
He said the government also proposed to reduce toll charges by 50 per cent for all buses, except at border entry points, namely the Johor Causeway, Second Link and Bukit Kayu Hitam, for a period of two years from Sept 15 this year.
The government would provide compensation to toll operators for their loss of revenue, estimated at RM45 million per year, he added.
Abdullah said bus operators would also be given sales tax exemption on the purchase of locally assembled new buses and Accelerated Capital Allowance on the expenditure incurred while road tax would be reduced to RM20 a year for all bus and taxi operators, including rent-a-car and limousine operators.
To ensure that specific attention is given to efforts for overall development of the public transportation system, Abdullah said, the Public Land Transportation Commission would be established under the Prime Minister's Department to plan, integrate, regulate and improve the overall public transportation services. The commission was expected to commence operations by mid-2009.
Abdullah also said that the government would implement several agriculture programmes to ensure adequate food supply.
or this, he said, the government had provided RM5.6 billion under the National Food Security Policy for the period 2008 to 2010, among others to provide incentives to agriculture entrepreneurs to reduce pollution costs and encourage higher agriculture output.
An amount of RM300 million had been allocated in an effort to increase fish landings. Of the sum, RM180 million was in the form of cost-of-living allowance to fishermen and fishing boat owners as well as RM120 million as incentive for fish landings.
Abdullah said the government proposed that the expansion of chicken and duck farms be given Reinvestment Allowance of 60 per cent for a period of 15 years to help increase poultry output.
An allocation of RM475 million was to be provided in the form of agricultural inputs, fertilizers and pesticides to assist padi farmers, besides proposing that import duty on fertilizers and pesticides be abolished.