"STRENGTHENING ECONOMIC RESILIENCE, ACCELERATING TRANSFORMATION AND FULFILLING PROMISES"
Mr. Speaker Sir,
I beg to move the Bill intituled "An Act to apply a sum from the
Consolidated Fund for the service of the year 2014 and to appropriate
that sum for the service of that year" be read a second time.
Mr. Speaker Sir,
I begin the 2014 Budget Speech by reciting the holy kalimah
Bismillahirrahmanirrahim. Surah al-Qasas from the holy Quran, verse 77
says, "But seek, through that which Allah has given you, the home of the
Hereafter; and [yet], do not forget your share of the world. And do
good as Allah has done good to you;"
Philosophers often say:
"Unity is the beginning, staying united reflects progress while working together is the recipe for success."
1.Let us begin by expressing our gratitude to Allah Subhanahu Wa
Taala for with His Blessings, my colleagues and I are able to gather in
this august House, a symbol of our vibrant democracy in our sovereign
and independent nation.
2.On behalf of the Government, I would like to record our highest
appreciation and thank the rakyat for supporting and giving the mandate
to Barisan Nasional in the 13th General Election to continue to lead the
Mr. Speaker Sir,
3.This proves that though faced with various obstacles and challenges
as well as allegations hurled at us, with God's grace and the
transformative leadership of Barisan Nasional, we prevailed and continue
to be resilient and strong as the party chosen by the rakyat for the
next five years.
4. Indeed, we went through a challenging General Election. We take
pride that we observed all the rules and regulations in the true spirit
of democracy as provided for under the Federal Constitution. This
election has been acknowledged by friend and foe alike as the mother of
Mr. Speaker Sir,
5.The Government is certainly aware that in an environment of global
political and economic uncertainties, and if we are not vigilant, we
will be adversely affected. Hence, we are most grateful that our nation
has not been dragged into civil unrest which can destroy the country.
6.We are also grateful that our nation remains blessed, as we are
free from natural calamities unlike in other countries. We pray that we
are always protected by Him.
Mr. Speaker Sir,
7. We have implemented 10 Malaysia Plans and 3 Outline Perspective Plans, since 1965 to 2010.
8. The National Development Policy was implemented from 1991 to 2000.
Next came the National
Vision Policy which spanned the period from 2001
to 2010. When tabling the 2010 Budget, I launched the National
Transformation Policy, the bedrock and catalyst towards achieving Vision
9.I must stress explicitly that all these plans would not have been
realised without careful planning and clear strategies by the
Government. In fact, for decades the Barisan Nasional Government has
taken relentless efforts to develop the nation from an agriculture-base
to a modern industrial economy and further grow to upper middle-income
status. We are now poised to become a high-income and developed nation.
Mr. Speaker Sir,
10.On 14 September 2013, I presented the Agenda on Bumiputera
Economic Empowerment at the Dewan Agong Tuanku Cancelor in the main
campus of UiTM. In my speech, I explained the demographics of the
nation, particularly in relation to the Malays and Bumiputeras.
Mr. Speaker Sir,
11.Currently, the demographics beginning from Arau, Perlis to Kudat
and Tawau in Sabah, through Bintulu and Batang Ai, Sarawak, indicate
that Malays comprise 41 subgroups within nine major groups, Chinese 10
subgroups, Indians 8 subgroups, Orang Asli 18 categories, Bumiputera
Sabah more than 60 ethnic groups and in Sarawak, more than 40 subgroups.
12.The truth is, irrespective of whether we are Malays, Chinese,
Indians, Kadazans, Murut, Dusun, Iban, Bidayuh, Orang Ulu, Orang Asli,
Sikhs, Eurasians, Siamese, Baba Nyonya and Chitty, we are all
Malaysians. Every ethnic or subgroup irrespective of numbers is
important in our journey towards success.
Mr. Speaker Sir,
13.According to the 2010 Population and Housing Census, estimates for
2013 indicate that there are 18.6 million Malays and Bumiputera (67.9%
of total population) including Muslims and non-Muslims, Chinese, 6.6
Indians, 2 million (7.2%), while there are 259,000 (0.9%) people of
other ethnic groups (0.9%). This means there are about 27.4 million
14.However, this does not include the 40,000 Bangladeshis who were
brought in as phantom voters in the recent 13th General Election as
alleged by the Opposition. Till today no one has even seen them or their
shadow. Enough of lies. Ask for forgiveness from Him.
Mr. Speaker Sir,
15.Indeed, for more than five decades, there has been an agreement
forged by our former leaders in full wisdom and knowledge, supported by
statistical evidence and our multiracial society. Therefore based on the
solid premise, we present you this important document.
16.As in previous years, the tabling of this document of national
importance falls on a Friday afternoon, a blessed day. This is the first
Budget to be presented by the Barisan Nasional Government, after
gaining the trust and confidence of the rakyat, once again. This is also
my fifth budget as the Minister of Finance since 2009.
2014 BUDGET THRUSTS
17.The 2014 Budget is formulated to ensure that the economy continues
to expand at a strong pace, and to reduce the fiscal deficit, with the
overall objective of prospering the nation and promoting the well-being
of the rakyat. Towards this, the 2014 Budget is formulating based on the
theme "Strengthening Economic Resilience, Accelerating Transformation
And Fulfilling Promises", outlining five main thrusts:
First Thrust: Invigorating Economic Activity
Second Thrust: Strengthening Fiscal Management
Third Thrust: Inculcating Excellence in Human Capital
Fourth Thrust:Intensifying Urban and Rural Development
Fifth Thrust: Ensuring Well-Being of the Rakyat
2013 ECONOMIC PERFORMANCE AND 2014 PROSPECTS
18.Allow me to highlight the current global and domestic economic
prospects. The global economy is expected to grow at a slower pace of
2.9% in 2013. As a highly open economy, Malaysia is not spared from the
modest growth. Nevertheless, the country's strong economic fundamentals
and accommodative monetary policy will enable us to grow at a
sustainable pace. In fact, the economy grew 4.2% in the first half of
19.Economic indicators reflect trends that support growth. For
example, the FBMKLCI reached 1,818 points on 24 October 2013, with
market capitalisation of RM1.66 trillion, a new record high in terms of
level and value. This underscores the increasing local and foreign
investors' confidence in the economy.
20.Net foreign direct investment was higher at RM18.2 billion in the
first half of 2013 compared with RM15.9 billion during the same period
in 2012. International reserves remained strong at RM444.9 billion at 14
October 2013, sufficient to finance 9.7 months of retained imports and
is 3.9 times the short-term external debt.
21.For the whole of 2013, the domestic economy is expected to expand
between 4.5% and 5%. Growth is supported by private investment,
increasing 16.2% to an estimated RM165 billion. In addition, private and
public consumption are expected to grow 7.4% and 7.3%, respectively
mainly supported by strong domestic economic activity.
22.In 2014, in tandem with an improved global economic outlook, the
domestic economy is projected to grow at a stronger pace of 5% to 5.5%.
Growth will be driven by private investment expanding 12.7%, and private
consumption at 6.2%.
23.Exports of goods are expected to grow 2.5% due to improving
external demand. On the supply side, the construction sector is expected
to grow 9.6%, followed by the services sector at 5.7%. The unemployment
rate is estimated at 3.1% while the inflation rate will remain low
between 2% and 3%.
24.The per capita income for 2014 is expected to reach RM34,126
compared with RM24,879 in 2009, an increase of 37% over 6 years. In this
regard, we are confident of achieving the target per capita income of
RM46,500 or USD15,000 in 2020. It is even possible that we will achieve
developed nation status much earlier than 2020.
2014 BUDGET ALLOCATION
25.The 2014 Budget will allocate a total of RM264.2 billion to
implement programmes and projects for the well-being of the rakyat and
national development. Of this amount, RM217.7 billion is for Operating
Expenditure while RM46.5 billion for Development Expenditure.
26.Under Operating Expenditure, RM63.6 billion is allocated for
Emoluments and RM36.6 billion for Supplies and Services. Meanwhile,
RM114.5 billion is allocated for Fixed Charges and Grants, while RM1.4
billion is for the Purchase of Assets. The remaining RM1.5 billion is
for Other Expenditures.
27.From the Development Expenditure of RM46.5 billion, a sum of RM29
billion is allocated to the economic sector. A sum of RM10.5 billion is
allocated to the social sector for education and training, health,
welfare, housing and community development. In addition, RM3.9 billion
is allocated to the security sector. The balance of RM1.1 billion is for
general administration and RM2 billion for contingencies.
28.In 2014, the Federal Government revenue collection is estimated at
RM224.1 billion, an increase of RM4 billion from 2013. Taking into
account the estimated revenue and expenditure, the Federal Government
fiscal deficit will further decline from 4% of GDP in 2013 to 3.5% in
2014. This clearly indicates the Government's commitment towards fiscal
consolidation to further strengthen the financial position of the
29.Taking into account the current international and domestic
economic environment, I will now present the five thrusts which will be
the basis of the 2014 Budget.
FIRST THRUST: INVIGORATING ECONOMIC ACTIVITY
30.The Government will continue to provide a conducive environment to
attract more domestic and foreign investment. The Government's efforts
have led to an increase in private investment. For example, the share of
private investment to GDP has grown from 12.4% in 2010 to 16.7%
31.In 2014, private investment is expected to increase further to
RM189 billion or 17.9% of GDP, particularly in oil and gas, textile
industry, transport equipment and real estate development.
32.Public investment is estimated to reach RM106 billion. Projects to
be implemented include construction of the 316-kilometre West Coast
Expressway from Banting to Taiping as well as double-tracking projects
from Ipoh to Padang Besar, and later from Gemas to Johor Bahru.
33.In the oil and gas sector, among projects to be undertaken by
Petronas include the Sabah Ammonia Urea Project (SAMUR) in Sipitang; the
integrated oil and gas production development project in Kebabangan;
the regasification plant project in Lahad Datu, Sabah; and RAPID in
Pengerang, Johor, which is the largest investment in Malaysia.
34.The Government will continue to encourage investments in the five
regional economic corridors by providing basic infrastructure and
implementing high-impact projects. As at end-2012, investments worth
RM124 billion or 41% of the total committed investments were realised in
the regional corridors.
35.In the first nine months of 2013, the regional corridors attracted
committed investments of RM53.4 billion with almost 50% realised. Among
the important projects in Iskandar Region are Pinewood Studio,
Gleneagles Medini Hospital and Pegasus International School. In
addition, sewerage and flood mitigation projects will be carried out.
36.In 2014, the Government will allocate RM1.6 billion for
development in the five regional corridors. Among the main projects to
be implemented include the agropolitan project and oil palm-based
industries in the Sabah Development Corridor as well as Samalaju
Industrial Park and a halal hub in the Sarawak Regional Corridor.
37.Meanwhile, in the East Coast Corridor, Kuantan Port will be
expanded. An integrated petrochemical complex will be built in Gebeng
and Kertih. In the Northern Corridor, the main projects include planting
of commercial crops and fertigation system.
Invigorating Services Sector
38.The services sector is the key contributor to economic growth and
has huge potential for further development. The sector's contribution to
GDP has increased from 49.3% in 2000 to 55% in 2013. To further promote
growth in the sector, the Government will launch the Services Sector
Blueprint in 2014 which outlines strategies and measures as well as
identifies the following potential subsectors to be developed.
39.Malaysia is currently ranked 29th in the World Bank Logistics
Performance Index Report 2012. The Index benchmarks the performance of
logistics activities, including shipping, infrastructure, timeliness,
customs clearance and competencies. Though lagging behind developed
nations, our performance can be improved.
40.To ensure a more efficient logistics sector, the Government will
formulate a Logistics Sector Master Plan. The Plan will provide the
strategic direction for the development of logistics infrastructure and
supply chain as well as review regulations and laws. In addition, the
Government will allocate RM3 billion in soft loans under the Maritime
Development Fund through Bank Pembangunan Malaysia. The Fund will
provide financing to encourage the development of the shipping industry,
shipyard construction, oil and gas as well as maritime-related support
Promoting Aviation Industry
41.Malaysia has potential to be an aviation hub in the region. The
industry will have a multiplier effect on the economy in line with
growing demand for passengers and air cargo. For the period January to
July 2013, passenger traffic at airports nationwide increased to 43.9
million from 38.6 million passengers during the same period in 2012.
42.Total air cargo handled increased to 529,000 tonnes during the
first seven months of 2013. When KLIA 2 is operational, passenger
traffic is expected to increase to more than 70 million. To further
develop the industry, the Government will formulate a National Aviation
Policy, which will outline measures to strengthen the ecosystem and
services network in the aviation industry.
43.To improve operations management and air traffic control, the
Government will replace the existing air traffic control management
system in Subang that is almost 20 years old. A new air traffic
management centre costing RM700 million will be built at KLIA. The new
system will facilitate an increase in air traffic from 68 to 108
movements per hour on 3 runways. This will be among the highest capacity
in handling air traffic worldwide.
44.To increase passenger comfort, the Government will upgrade several
airports, such as Kota Kinabalu and Sandakan in Sabah as well as Miri,
Sibu and Mukah in Sarawak. For this, the Government will allocate RM312
million. In addition, the passenger terminals in Langkawi International
Airport and Kuantan Airport will be upgraded.
Promoting Tourism Sector
45.In 2013, the tourism sector is expected to generate revenue of
RM65 billion and has the potential to contribute further. In 2012,
Malaysia attracted 25 million tourists. In view of the encouraging
performance, 2014 has been declared Visit Malaysia Year (VMY), targeting
28 million tourists.
46.To implement the VMY programmes, the Government will allocate
RM1.2 billion for operating and development expenditure in 2013 and
2014, including for promotion and advertising.
47.In continuous efforts to attract more tourists, I am pleased to
announce 2015 as the Year of Festivals. In this regard, we will organise
and showcase a variety of cultural programmes and festivals in the
48.Malaysia is among the preferred tourist destinations for shopping.
According to the Globe Shopper Index 2012 and CNN Travel 2013 Report,
Kuala Lumpur is ranked the 4th most popular city in the world for
shopping after New York, Tokyo and London.
49.To further promote Malaysia as a preferred tourist destination,
the Government will continue to encourage investments particularly in
new 4 and 5-star hotels. The measure will ensure adequate supply of
international standard accommodation and increase tourist arrivals,
especially from the luxury and high-spending category. To support this,
the Government proposes the application period for Pioneer Status and
Investment Tax Allowance incentives be extended for another 3 years
until 31 December 2016.
50.To further promote the tourism industry, a sum of RM2 billion will
be provided to the Special Tourism Infrastructure Fund under Bank
Pembangunan Malaysia. The Fund will provide soft loans at low interest
rates between 4% and 6%, with the Government providing a subsidy of 2%.
The Fund will be used to finance the cost of building infrastructure
such as hotels, resorts and theme parks as well as purchase and
replacement of equipment related to the tourism sector.
Expanding Internet Access
51.In a borderless world, information can be obtained
instantaneously. Therefore the requisite infrastructure will be upgraded
to meet consumer demand. Hence, the Government has implemented the
High-Speed Broadband (HSBB) project under the National Broadband
52.The collaboration with the private sector has involved investment
of RM11.3 billion since the 9th Malaysia Plan. The HSBB project has been
implemented with Internet access speed of 4 megabits per second (Mbps)
and benefiting 2.3 million premises, particularly in urban areas.
53.To expand coverage in major towns, the Government will implement
the second phase of HSBB project in collaboration with the private
sector involving an investment of RM1.8 billion. The initiative is
expected to provide additional coverage and facilities mainly in urban
areas, benefiting 2.8 million households nationwide. The Internet speed
will be increased to 10 Mbps.
54.The HSBB network will be expanded to suburban areas with an
Internet access speed increasing to between 4 and 10 Mbps, which will
benefit 2 million consumers at a cost of RM1.6 billion.
55.To increase Internet coverage in rural areas, 1,000
telecommunication transmission towers will be built over the next 3
years, with an investment of RM1.5 billion. To increase Internet access
in Sabah and Sarawak, new underwater cables will be laid within 3 years,
at a cost of RM850 million. These investments will utilise the
Universal Services Provision Fund, which is under the purview of the
Malaysia Communications and Multimedia Commission.
Strengthening Financial Market
56.Currently, the domestic bond market is the largest in Southeast
Asia with a value exceeding RM1 trillion, while daily transactions in
the foreign exchange and money markets are more than RM30 billion. To
ensure efficient operations of financial markets, a clear regulatory
framework is required.
57.In this regard, amendments will be made to existing laws and Bank
Negara Malaysia will lead the initiative in formulating the Netting Act
to protect enforcement rights of "close-out netting" under the financial
contract. This is to reduce credit risk and promote the derivatives
market, thereby reducing systemic risks in the domestic financial market
as well as reduce the cost of doing business.
58.Malaysia's position as a leader in the Islamic capital market is
an advantage in attracting funds and issuance of securities. To enhance
global competitiveness, efforts will be intensified to promote Malaysia
as a market for Social Responsible Investment (SRI).
59.Among the measures which will be implemented include introducing
the Environmental, Social and Governance Index (ESG) to raise the
profile of listed companies which have high socially responsible
60.The Securities Commission will introduce the Framework of Socially
Responsible Sukuk Instrument or SRI Sukuk to finance various
sustainable and responsible investment initiatives. In addition, the
Government will establish a SRI Fund to be invested in listed companies
which demonstrate high accountability, transparency and sustainability,
including inclusiveness in diversity encompassing gender, age and
61.For a start, Valuecap will allocate RM1 billion to invest in
companies that score high on the ESG Index. I trust this will encourage
more companies to show high commitment towards social responsibility.
62. In 2010, the Government established the 1Malaysia Pension Scheme
(SP1M), for the self-employed without fixed income to contribute
voluntarily to the Employees Provident Fund (EPF). To date, about 66,000
contributors have participated in the scheme with total savings
exceeding RM240 million.
63. To encourage more people to participate in the scheme, I propose
that the Government increases its contribution from 5% to 10%, or from a
maximum of RM60 to RM120 per year. This will be effective from 1
January 2014 to end-2017 and is expected to attract 30,000 new
64. The Government recognises the importance of savings from an early
age to ensure sufficient savings after retirement. To further increase
savings, the Government encourages youth to undertake long-term
investment through the Private Retirement Scheme (PRS).
65. Towards this, the Government proposes a one-off incentive of
RM500 to contributors who participate in the PRS scheme with a minimum
cumulative investment of RM1,000 within a year. The incentive, which is
available for individuals aged between 20 and 30 years, is expected to
attract 420,000 youth contributors nationwide. The incentive will be
implemented from 1 January 2014, for a period of 5 years, involving an
allocation of RM210 million.
Moving Up the Value Chain in Agriculture Sector
66. According to an old proverb, if you work on the land diligently,
you will reap the harvest. As such, agriculture is always included in
the annual budget.
67. An allocation of RM6 billion will be provided for the
implementation of high value-added and commercially viable agriculture
programmes. Among the main initiatives are as follows:
First: Establish the Food and Agro Council for Export (FACE) which
will be chaired by the Minister of Agriculture and Agro-based Industry.
The Council will act as a facilitator to increase exports of local
Second: Strengthen FAMA to play a more strategic role, in line with
the concept of “from farm to export market”. For instance, FAMA will
organise an Agro Bazaar in Singapore; and
In line with the high price and demand for durians, we will increase
exports to China. To ensure that agriculture produce remains fresh, the
Government will provide cold room facilities in KLIA. In addition to
increasing exports, this will give higher return to farmers;
Third: Ensure fair prices of food products by opening an additional
60 farmers’ markets, 50 fish markets, 50 agriculture caravans as well as
100 fresh fruit stalls nationwide. The initiative to be undertaken by
FAMA and LKIM will provide facilities to traders to sell food products
directly to consumers.
68. The Government will allocate a sum of RM2.4 billion for subsidies
and incentives, including subsidies for fertilisers, seeds, price of
paddy and rice as well as incentives for higher production of paddy and
fish landing. In addition, the Government will allocate RM243 million
for the replanting programme of rubber, palm oil and cocoa as well as
forest plantation programme.
69. To increase productivity as well as to promote agriculture
produce with high demand, the Government will allocate RM634 million
under the National Key Economic Area. Among the projects include paddy
and fish cage farming, seaweed and birds’ nest, high-value herbs,
vegetables and fruits for the export market.
70. The Government will also implement a lobster rearing project at
Semporna, Sabah in collaboration with a multinational company to produce
18,000 metric tonnes yearly which will create 20,000 jobs. The project
is expected to benefit more than 6,000 local entrepreneurs and increase
their monthly income up to RM4,000 over the long term.
71. To increase competitiveness and the contribution of Bioeconomy to
economic growth, the Government will implement the Bioeconomy Community
Development programme. Under the programme, idle lands will be
developed through the application of biotechnology as well as for
contract farming to increase the value-added of the agro-based industry
and income of farmers.
72. Recognising the importance of research and development (R&D)
for the development of Bioeconomy, the Government will provide the
following R&D incentives for viable projects which will be assessed
First: Tax deduction for companies that invest to acquire technology platform in bio-based industry;
Second: Exemption on import duty on R&D equipment for companies
that invest in pilot plants for the purpose of pre-commercialisation in
Malaysia; and Third: Special incentive to companies to partially cover
the operational cost for human capital development for Centre of
Excellence for R&D.
The incentives are for applications received by Biotech Corp from 1 January 2014 to 31 December 2018.
73. According to Hadith, out of ten parts, nine parts of one’s
sustenance is in business. In this respect, we will train and nurture
more young entrepreneurs so that they will become successful
businessmen. Thus, the Government is committed to ensuring that
entrepreneur development remains a key element in generating economic
74. An entrepreneur development plan will be formulated to provide a
conducive ecosystem which emphasises the generation of ideas which can
be commercialised, infrastructure for training and incubators,
entrepreneurship modules, financing facilities as well as marketing. To
formulate the entrepreneur development plan, an entity called the
National Entrepreneur Development Office will be established under the
National Strategy Unit, Ministry of Finance which will plan and
coordinate all activities related to entrepreneurship.
75. During the recent 4th Global Entrepreneurship Summit, I had
announced the establishment of the Malaysian Global Innovation and
Creativity Centre (MaGIC), a one-stop centre to empower entrepreneurs.
MaGIC will monitor the performance of entrepreneurs; house an integrated
database; provide incubators; registration and patenting of
intellectual property; funding facilities; business matching process;
and guidance, counselling and training. For this purpose, the Government
will provide an allocation of RM50 million.
76. To make Malaysia an Entrepreneurial Nation, the 1Malaysia
Entrepreneurs (1MeT) programme was implemented to expose
entrepreneurship to youth who are interested to venture into business.
Through the 1MeT Programme, a database of participants has been created.
77. The Government targets 5,000 young entrepreneurs to be trained
yearly. In this regard, committed 1MeT entrepreneurs will be given
further guidance at MaGIC. In addition, Malaysia will host the 5th
Global Social Business Summit from 7 to 9 November 2013, which will
provide a platform for social entrepreneur development, especially among
youth in the country.
78. To reduce graduate unemployment, the Government encourages
graduates to venture into entrepreneurship upon graduation. For this, I
am pleased to announce that the Government will allocate RM50 million
under the Graduate Entrepreneurship Fund which will be managed by SME
Bank. The Fund will provide soft loans of up to RM500,000 at an interest
rate of 4%.
Strengthening Small and Medium Enterprises
79. Currently, while SMEs account for 97.3% of the total registered
businesses, their contribution to GDP is 32.4%. Following the new SME
definition, the percentage of registered SMEs will increase to 98.5%.
The Government is committed to ensuring that SMEs contribute 40% to GDP
80. The Government proposes an allocation of RM120 million for an
integrated package to increase innovation and productivity of SMEs. The
package will provide financing for mechanisation and automation as well
as upgrading capacity of SMEs. In addition, the Government provides
various assistance and incentives under the Green Lane Policy programme
for financing, tax incentives and procurement including:
First: Subsidy on interest rate of 2% or a maximum of RM200,000 per year;
Second: Stamp duty exemption for loan agreements under the soft loan incentive scheme;
Third: Tax deduction on expenses incurred for obtaining 1-InnoCERT certification;
Fourth: Government procurement incentives encompassing approved
manufacturers status company registration without site visit as well as
bonus marks given in technical evaluation; and
Fifth: Priority incentives to participate in procurement exercise by Minister of Finance Incorporated Companies.
The Government plans to extend these incentives until 31 December 2017.
81. The Government has implemented the Minimum Wage Policy on 1
January 2013. The monthly minimum wage is RM900 in Peninsular Malaysia,
and RM800 in Sabah, Sarawak and Labuan. To encourage compliance with
this new policy, and to reduce the financial impact to SME employers,
co-operatives, societies and associations, the Government proposes that
the difference in the wages paid by employers for the period of 1
January 2014 to 31 December 2014 be given further tax deduction.
82. To help the night market traders, the Government will create a
Night Market Traders Entrepreneur Scheme with an allocation of RM100
million under Bank Simpanan Nasional. The soft loans will carry a 4%
interest rate, with maximum loans of up to RM30,000. The facility is to
cover business costs such as revolving capital, site rental, raw
materials and business equipment.
SECOND THRUST: STRENGTHENING FISCAL MANAGEMENT
Transformation of Civil Service
83. To achieve this objective, we first need to transform the civil
service. To improve the service delivery system, the Government will
implement the transformation plan in every ministry. This is important
to strengthen and restructure the organisation to remain relevant in
line with current developments.
84. The Government views seriously the issues highlighted in the 2012
Auditor General’s Report. To enhance confidence of the rakyat as well
as uphold the image and credibility of the civil service, a special
committee has been established, chaired by the Chief Secretary to the
Government, to investigate and take stern action against errant civil
85. The Public Service Department (JPA) is investigating and taking
action on more than 100 cases for non-compliance with financial
procedures including procurement procedures. Meanwhile, 15 cases are
under the investigation of the Malaysia Anti-Corruption Commission
(MACC) for prosecution.
86. To enhance integrity, the Government will establish an Integrity
Management Unit in each ministry to increase compliance and adherence
with established procedures. MACC officers will be represented in the
Improving Budget Management
87. To improve budget management, the Outcome-Based Budgeting (OBB)
was introduced to ensure that allocation is based on outcomes; improve
the efficiency of implementation; reduce redundancy as well as
systematically evaluate performance of all Government programmes and
projects. In 2014, three ministries, namely Ministry of Health, Ministry
of International Trade and Industry as well as Ministry of Finance will
undergo performance evaluation based on the OBB.
88. Last June, the Government established the Fiscal Policy Committee
(FPC). The role of the FPC is to strengthen the Government’s financial
position, ensure fiscal sustainability and long-term macroeconomic
stability. The Government is committed to reducing the fiscal deficit
gradually, with the aim of achieving a balanced budget by 2020. The
Government will also ensure that Federal debt level will remain low and
not exceed 55% of GDP.
89. In addition, the Government will continue to ensure a strong
operating surplus where revenue will always exceed operating
expenditure. Emphasis will be given to improving efficiency in spending,
prioritising implementation of high-impact projects as well as
improving auditing methods.
90. Currently, audit is only undertaken after a project or programme
is completed. As a proactive measure, the Government will conduct audit
on projects valued at more than RM100 million during its implementation.
Monthly Tax Deduction as Final Tax
91. Currently, tax payers with employment income and subject to
monthly tax deduction (MTD) are required to submit tax returns before or
on 30 April of each year. The requirement to submit tax returns has
confused tax payers from whom MTD has already been made and yet they are
still required to submit the tax returns to the Inland Revenue Board.
92. To facilitate tax payers with employment income whose MTD have
been made, it is proposed that these tax payers are not required to
submit tax returns if satisfied their MTD is a final tax. This proposal
is effective from year assessment 2014.
93. In general, subsidies impede growth if not well targeted. The
Government has allocated almost RM47 billion in 2013 for various types
of subsidies, incentives and assistance, including subsidies for
petroleum products, food, health, agriculture and fisheries, utilities,
toll as well as welfare and education.
94. Of this amount, the largest allocation of RM24.8 billion or 53%
is to subsidise petroleum products that are enjoyed by all segments of
society, including the high-income group, businessmen and foreigners. In
addition, subsidised products are also smuggled by irresponsible
people. Subsidy is rakyat’s money and should be used to improve the
well-being of the rakyat. However, if subsidies lead to wastage and
losses, the Government will not hesitate to take appropriate action.
95. To ensure a targeted subsidy system, the Government will
gradually restructure the subsidy programme. This is to ensure that only
those who truly deserve will enjoy it. A portion of the savings from
the restructuring of the subsidy system will be distributed in the form
of direct cash assistance, while the other half will be used to finance
development projects. For a start, the Government has reduced the
subsidy on petroleum products by 20 sen a litre on 3 September 2013.
96. In addition, to ensure that there is no duplication in providing
assistance and no deserving welfare assistance recipient is left out,
the Government will establish a comprehensive database system, including
integrating the databases of e-Kasih, recipients of welfare assistance;
and BR1M recipients. For this, the Implementation and Coordination
Unit, JPM will lead the initiative.
Goods and Services Tax (GST)
97. The Government takes cognisance that the current sales tax and
service tax have certain weaknesses such as the impact of double
taxation on consumers, the absence of full tax relief on exported goods
and transfer pricing issue. These weaknesses ultimately will result in
losses to the consumers and the Government.
98. In Budget 2013, the Government intended to take bold measures to
strengthen the fiscal position of the nation. In fact a Bill in relation
to the GST had been previously read in this august House. Since then we
have received various views, both positive and negative.
99. The Government has taken a few years to conduct detailed and
comprehensive studies, and has considered the views of all segments of
society, including the chambers of commerce, investors, economists,
academicians, consumer associations and NGOs.
100. Thus, based on the principal of People First, the Government has
decided to expeditiously implement a fair and comprehensive tax system
that benefits all Malaysians.
101. In this regard, the Government proposes that the sales tax and
service tax be abolished. These two taxes will be replaced by a single
tax known as the Goods and Services Tax (GST). I must stress that GST is
not a new tax.
102. Currently, the inflation rate is low at 2%. The Government
believes that this is the best time to implement GST as the inflation
rate is low and contained.
103. With the implementation of GST, the Government will be able to
address the weaknesses in the current taxation system. As an example, if
we were to buy a carbonated drink in a restaurant today, we would not
notice that we are paying double taxes which are sales tax and service
104. Put differently or explained in simple terms, with the GST
system, consumers will only need to pay tax once and the price of goods
should be cheaper.
105. We feel disheartened that certain irresponsible groups tried to
take advantage by confusing the general public on the understanding of
GST. They claimed that when GST is implemented, the price of goods will
rise, and that the poor and low-income group will bear the burden.
106. More than 160 countries have already implemented GST. This
clearly demonstrates that GST is proven to be a transparent, effective
and fair tax system. The vast majority of nations in the world would not
have implemented GST, if it is disadvantageous to the people and the
country. Most of the developed nations have long implemented GST or
Value Added Tax (VAT). Even ASEAN countries such as Indonesia, the
Philippines, Laos and Cambodia, as well as countries such as Burkina
Faso, Burundi, Zimbabwe, Rwanda and Kenya have implemented GST.
107. On the part of the Government, GST legislation, computerised
systems, training of officers, GST infrastructure and a comprehensive
communication plan have been completed.
108. The proposed GST model to be implemented in Malaysia is as follows:
First: The GST rate is fixed at 6% and to be effective from 1 April 2015, approximately 17 months from today.
This rate is the lowest among ASEAN countries compared with 10% in
Indonesia, Vietnam, Cambodia, the Philippines, and Laos and 7% in
Singapore and Thailand;
Second: GST will not be imposed on basic food items such as rice,
sugar, salt, flour, cooking oil, lentils, herbs and spices, salted fish,
cencalok, budu and belacan;
Third: GST will not be imposed on piped water supply, and the first 200 units of electricity per month for domestic consumers;
Fourth: GST will not be imposed on services provided by the
Government such as the issuance of passports, licences, health services
and school education;
Fifth: Transportation services such as bus, train, LRT, taxi, ferry,
boat, highway toll as well as education and health services are exempted
from GST; and
Sixth: Sale, purchase and rental of residential properties as well as selected financial services are exempted from GST.
109. Upon the implementation of GST, the Government is committed to
providing various forms of assistance to the rakyat during the GST
transition period. The assistance and support are as follows:
First: One-off cash assistance of RM300 to households who are BR1M recipients;
Second: Individual income tax rates be reduced by 1 to 3 percentage
points for all tax payers to increase their disposable income. With this
measure, 300,000 persons who currently pay income tax will no longer
pay tax. Generally, families with monthly income of RM4,000 will no
longer have tax liability. Other existing tax payers will also enjoy tax
Third: Individual income tax structure will be reviewed to enhance
the competitiveness of the nation as well as to retain and attract
talent and skilled workers into the country. To ensure a more
progressive tax structure, the chargeable income subject to the maximum
rate will be increased from exceeding RM100,000 to exceeding RM400,000.
The current maximum tax rate at 26% will be reduced to 24%, 24.5% and
These measures will be effective from 2015.
110. In this regard, to ensure smooth implementation of GST by
businesses, the Government proposes the following additional packages:
First: Corporate income tax rate be reduced by 1 percentage point
from 25% to 24%. Whereas income tax rate for small and medium companies
will be reduced by 1 percentage point from 20% to 19% from the year of
Second: Cooperative income tax rate be reduced by 1 to 2 percentage points from the year of assessment 2015;
Third: Secretarial fee and tax filing fee are allowed as tax deductions from the year of assessment 2015;
Fourth: Cost of purchasing ICT equipment and software is given Accelerated Capital Allowance until year of assessment 2016;
Fifth: Expenses incurred for training in accounting and ICT relating
to GST be given further tax deduction for years of assessment 2014 and
Sixth: Training grant of RM100 million will be provided to businesses
that send their employees for GST training in 2013 and 2014. In
addition, financial assistance amounting to RM150 million will be
provided to SMEs for the purchase of accounting software in 2014 and
111. With the various special packages provided by the Government,
certainly no parties should take opportunity to increase prices of goods
and services unscrupulously. Prices of goods will be constantly
monitored. The Government will publish prices of goods and services as a
guide for consumers to compare prices.
112. Consumers are urged to make rational choices, spend prudently
and report unethical traders to the authorities. In this regard, the
Ministry of Domestic Trade, Cooperatives and Consumerism will intensify
enforcement efforts through the Price Control and Anti-Profiteering Act
113. In addition, to ensure the smooth implementation of GST, a GST
Monitoring Committee will be established and chaired by the Honourable
Second Minister of Finance with members from Government agencies as well
as representatives from industries and NGOs.
THIRD THRUST: INCULCATING EXCELLENCE IN HUMAN CAPITAL
114. The biggest challenge for Malaysia is holistic human capital.
Holistic human capital development includes intellectual capital,
artistic skills, communication skills, interpersonal skills, thinking,
innovation and creativity. In essence, physical and technological
developments must be balanced with noble values. Otherwise, there will
be a vacuum and material success will not be rooted in universal human
115. The Government will continue to provide quality and advanced
skills training to meet the demands of the job market. In addition, the
physical, spiritual and intellectual aspects will be honed from young to
tertiary level. The workforce will also be infused with noble values so
that society lives in peace and harmony.
Enhancing Educational Excellence
116. In achieving the third thrust, the first initiative is enhancing
educational excellence. Indeed, every Budget has provided the largest
allocation to the education sector. Education is important. Since
ancient times, a civilisation will not last if not imbued with knowledge
117. The Government is committed to accelerating academic
achievement, competencies and skills. Towards this, the Government will
allocate a sum of RM54.6 billion or 21% of the total allocation in 2014.
In addition, the Government will ensure that the implementation of the
Malaysia Education Blueprint achieves the objective of ranking Malaysia
in the top one third category of the world’s best education, within a
span of 15 years.
118. To continue upholding excellence in education beginning from
preschool to the secondary level, programmes to be implemented include:
First: The Government recognises that early education is critical for
physical and mental development. In this regard, we allocate RM530
million for preschool programmes as well as set up 93 preschools in
national-type primary school;
Second: Implementing programmes to enhance the teaching profession
with emphasis on teaching, improving teaching methods and proficiency in
Bahasa Malaysia and English. For this, a sum of RM209 million is
Third: Expanding internet access in schools especially in rural areas with an allocation of RM168 million; and
Fourth: Build 33 new schools and upgrading existing ones, including dilapidated schools with an allocation of RM831 million.
119. In the 2012 and 2013 Budget, respectively the Government
provided RM1 billion under the Special Fund for Building, Upgrading and
Maintenance of Schools specifically for urgent repairs and maintenance
of school buildings; purchase of equipment and construction of
120. To follow up on the Government’s commitment, I am pleased to
announce an additional RM450 million for this Special Fund. Of this,
RM100 million will be channelled to national schools and RM50 million
each to national-type Chinese schools, RM50 million to national-type
Tamil schools; mission schools; Government-assisted religious schools;
boarding schools; and Maktab Rendah Sains MARA as well as People’s
Religious Schools (SAR).
121. The Government will focus on strengthening public and private
higher learning institutions towards producing quality graduates who
meet the demands of the job market.
Among programmes to be implemented include:
First: Improving the status of research universities by increasing
research and the number of articles for publications in international
journals. For this, the Government will provide an allocation of RM600
million in research grants for public institutions of higher learning;
Second: The Government will continue the MyBrain15 programme which
finances tuition fees at post-graduate level, especially for executives
in the private sector. For this, a sum of RM110 million is allocated.
122. Publishing articles in international academic journals is an
important aspect in promoting the works of local academicians.
Recognising the importance of establishing a world-class scholarly
centre, the Government will establish a Malaysian Citation Centre to
increase publication of local scholarly works and assist researchers
publish articles in renowned international journals.
Strengthening Skills Training
123. Continuous efforts will be made to improve the quality of
training in order to produce a highly skilled workforce. The Government
will therefore implement the following measures:
First: Implement a single tier for the Malaysian Skills Certificate
course Levels 1 to Level 3 for 6 months in all Industrial Training
Institutes under the purview of Manpower Department (JTM);
Second: Upgrade and replace equipment at JTM training institutes with
the latest technology involving an allocation of RM178 million; and
Third: Allocate a sum of RM330 million to Skills Development Fund
under the Ministry of Human Resource. The fund will provide loans for
SPM leavers to enrol in skills training courses.
124. Youth are the nation’s hope, asset and heir for the future.
According to religious scholars, good behaviour of youth today will
reflect the future of the nation.
125. A sum of RM200 million is allocated to upgrade and implement a
two-shift approach at the National Youth Skills (IKBN). Among the areas
that have been identified include automotive, marine maintenance,
welding and electrical wiring which will benefit more than 15,000 IKBN
126. At present, there are 13,000 registered employers who contribute
a levy of 1% of the monthly wages of workers to the Human Resource
Development Fund (HRDF). The levy is used to train and upgrade the
skills of workers.
127. HRDF will provide RM400 million for registered companies to give
opportunities to employees to enrol in upskilling and reskilling
programmes. The allocation can also be used by these companies to train
apprentices and future workers.
128. To ensure employees are able to balance between career and
family commitments, a flexible work environment is important. Therefore,
it is proposed that employers implement the Flexible Work Arrangement
(FWA) to give flexibility in terms of duration, place and working hours
at the workplace.
129. The FWA may be implemented through compressed work week, flexi
hours and weekend work. To encourage more Malaysian companies to adopt
FWA as the norm, the Government proposes that training expenses and
consultancy fees incurred by employers in implementing FWA be given
further tax deduction.
130. The Government will continue giving RM100 to all primary and
secondary school students to ease the burden of schooling expenses. For
this, the Government will allocate RM540 million which will benefit
about 5.4 million students. I understand some parents have donated the
sum to the Parent-Teachers Association (PIBG). The Government
appreciates the kind gesture.
1Malaysia Book Voucher
131. A reading culture among the rakyat should be enhanced. Make the
book your friend, your torch in the dark and a lifelong mind stimulant.
132. To ease the burden of students in pre-university and
institutions of higher learning in purchasing books and reference
materials, the Government will continue to provide the 1Malaysia Book
Voucher Programme valued at RM250 to each student. The initiative is
expected to benefit 1.3 million students involving an allocation of
FOURTH THRUST: INTENSIFYING URBAN AND RURAL DEVELOPMENT
National Blue Ocean Strategy (NBOS)
133. The National Blue Ocean Strategy (NBOS) is an integrated
approach by the Government in formulating policies and initiatives
through smart partnership between the ministries and agencies.
134. The strategy complements the National Transformation Policy. To
date, 56 initiatives have been implemented using the NBOS approach of
low cost, speedy implementation and high impact programmes. In 2014, the
Government will allocate RM278 million to implement various programmes
First: Launching of the Urban Transformation Centre (UTC) in Sabah at
the end of the year and 4 more UTCs with one each in Sarawak, Johor,
Terengganu and Perlis, in addition to the existing 5 UTCs;
Second: Launching an additional three Rural Transformation Centres
(RTCs) with one each in Sabah, Sarawak and Negeri Sembilan, bringing the
total to 8 RTCs; and
Third: Implementing Mobile Community Transformation Centre or Mobile
CTC by increasing the number of modified buses and vans. The main
services to be provided include MyKad registration, driving licence
renewal, health screening and business advisory services.
Strengthening the Public Transport Network
135. An efficient public transport system facilitates mobility, saves
time and travel costs. The Government is therefore committed to
improving public transport, including providing quality and comfortable
facilities. Among the initiatives taken are:
First: Constructing the Ipoh-Padang Besar double-tracking project and
later extending to Johor Bahru as well as upgrading rail tracks
nationwide with an allocation of RM2.9 billion;
Second: Providing ‘park and ride’ facilities at LRT stations, KTM
commuter stations and ERL stations with an allocation of RM62 million;
Third: Introducing a Centralised Taxi Service System with an
allocation of RM15.3 million to ensure efficient mobilisation of taxi
Fourth: Building ‘last city terminals’ and upgrading bus stops as
well as providing ‘drop-and-ride’ facilities involving an allocation of
RM28 million; and
Fifth: Refurbishing Electric Multiple Units (EMUs) trains at a cost
of RM28 million to ensure frequency and efficiency of services.
136. To ensure a seamless network between urban and rural areas, the
Government will allocate RM130 million to subsidise rural air transport,
especially for rural population in Sabah and Sarawak. Holding firm to
the principle of People First, the Government will also continue to
subsidise uneconomical train routes in East Coast, namely Pahang and
Kelantan. The move will benefit about 600,000 commuters involving an
allocation of RM52.9 million.
Enhancing Urban Well-being
137. Currently, there are various local community groups such as
Residents’ Associations, Jawatankuasa Kemajuan dan Keselamatan Kampung,
as well Neighbourhood Watch, which focus on administration as well as
promote unity and harmony among local residents.
138. To enhance coordination and community well-being, particularly
in urban areas the Government proposes the establishment of Jawatankuasa
Perwakilan Penduduk (JPP) in local authorities (PBT). JPP will be
represented by members of the local community to support community
development programmes, apart from addressing issues in their areas. For
this, the Government will establish 24 JPP zones in each local
authority with an allocation of RM63 million.
139. Currently, treated water supply reserves nationwide have not met
the 20% target with water supply disruptions, particularly during peak
periods. Therefore, to increase the coverage of water supply to 100%,
especially in urban areas, the Government will build and upgrade dams
and water treatment plants involving an allocation of RM1.2 billion.
140. To further strengthen and improve basic infrastructure as well
as improve the living standards of people in rural areas, a sum of RM4.1
billion is provided for rural development programmes for basic
infrastructure projects such as:
First: A sum of RM980 million is allocated for the refurbishment and
upgrading of 437 kilometers of rural road networks nationwide. In
addition, a total of RM500 million is provided for the Pan-Borneo
Second: A sum of RM457 million is allocated for the provision of
potable water to 8,000 houses in rural areas. In addition, RM75 million
is allocated for the supply of water tanks in Sarawak;
Third: A sum of
RM865 million is allocated for the provision of uninterrupted 24-hour
electricity supply to more than 16,000 homes nationwide. In addition, to
address the frequent electricity supply disruption in Sabah, a sum of
RM265 million is allocated to strengthen the generation and transmission
system such as upgrading of the Tenom Pangi Hydro Power Station,
construction of Kimanis electricity transmission lines and construction
of main switch station in Sandakan;
Fourth: A sum of RM179 million is allocated to build and refurbish 20,000 houses for poor people in rural areas;
Fifth: To encourage entrepreneurship among the rural populace and
increase their incomes, a sum of RM20 million is allocated for Rural
Business Challenge programme which includes food production, fish
farming, auto repair and agro-tourism; and
Sixth: A sum of RM109 million is provided for the economic
development as well as to upgrade the infrastructure, facilities and
living standard for the Orang Asli community.
141. The Government will continue with the flood mitigation programme
(RTB) in Sungai Muda in Kedah, RTB Lembangan Sungai Muar in Johor, RTB
Sungai Bunus in Kuala Lumpur and RTB Pekan in Pahang. For this, the
Government will allocate RM659 million. In addition, the Government will
provide an allocation of RM79 million for dredging and deepening river
142. The Government is aware that the Bumiputera minority
particularly in Sabah and Sarawak face challenges in owning customary
land. For this, the Government will allocate RM50 million for land
surveying and customary land ownership verification.
FIFTH THRUST: ENSURING THE WELL-BEING OF THE RAKYAT
Malaysia Happiness Index
143. The nation’s prosperity does not only depend on economic
progress, but also the quality of life and the well-being of the rakyat.
In this regard, the Malaysian Well-being Index (MWI 2012) was
developed. The Government will continue to formulate policies and
strategies to improve the quality of life and well-being of the rakyat.
Enhance Security and Public Order
144. The Government appreciates the contribution of the security
forces. Priority is also given to security and public order. The
Government is committed to combatting crime and averting foreign threat
which may disrupt national security and harmony.
145. For this, the Government will allocate a sum of RM8.8 billion to
the Royal Malaysia Police (PDRM) and RM13.2 billion to the Malaysian
Armed Forces (ATM) to reduce crime and enhance military preparedness.
146. To further strengthen the police force, the Government will
build and upgrade the Police Headquarters, District Police Headquarters
(IPD) and staff quarters involving an allocation of RM128 million. The
sum includes the construction of a new IPD in Pasir Mas, Kota Setar,
Johor Bahru Selatan, Sipitang and Nusajaya as well as building a new
Police Station in Pengerang, Tongod and Country Homes Rawang.
147. In the fight against serious crime, the Government has allocated
RM200 million to equip PDRM with the latest tools and equipment such as
firearms, ammunition, bulletproof vests, narcotic detectors, biometric
systems and forensic vehicles. The Government also will provide 496
closed-circuit cameras (CCTV) in 25 local authorities involving an
allocation of RM20 million.
148. In addition to the 1,000 motorcycles purchased this year for the
Police Motorcycle Patrol Unit, the Government has agreed to procure an
additional 800 motorcycles with an allocation of RM20 million this year.
The Government will also procure an additional 200 motorcycles bringing
it to a total of 2,000 motorcycles for 2 years.
149. The armed intrusion in Lahad Datu is a black mark for Malaysia.
The sacrifices and the patriotic deeds of the armed forces in defending
the nation is highly appreciated. What is important is that we will not
allow even an inch of our land to be taken away by anyone. Sabah will
remain with Malaysia forever.
150. To safeguard our territorial waters from foreign threat,
particularly in Sabah and Sarawak, the Government established the East
Coast Special Security Area (ESSCOM) early this year. To further
strengthen ESSCOM operations, the Government will allocate a sum of RM75
million for 2014.
151. In addition, the Government will continue to enhance national
security of our territorial waters and borders by strengthening
surveillance and upgrading defence equipment. This includes the purchase
of six offshore patrol vessels; four cargo aircrafts and support
equipment; as well as armoured vehicles with an allocation of RM2.4
152. The Government is concerned about the welfare of armed forces
personnel and veterans. In recognition of their contribution to the
nation, the Government will allocate RM48 million to cater for the
welfare of 20,000 ATM veterans, including health payments, ex-gratia and
153. In addition, a total of RM202 million will be allocated to build
and refurbish ATM quarters. The Government will also provide school bus
services for the children of military personnel to replace the army
Environmental Conservation and Resource Management
154. The Government is committed to providing a clean, safe and
healthy environment for the present and future generations. Among the
programmes to be implemented are the National Carbon Reporting Programme
or MyCarbon by the corporate sector, establishment of a National
Conservation Trust Fund for conservation of degraded areas and permanent
forest reserves, as well as natural resource management.
155. To strengthen the development of green technology, the
Government will provide investment tax allowance for the purchase of
green technology equipment and income tax exemption on the use of green
technology services and system.
156. To encourage a green lifestyle, Malaysian Green Foundation will
be established to promote and enhance use of green technology by the
corporate sector and the general public. For this, a launching grant of
RM15 million will be provided to the Foundation.
157. As an immediate measure to prevent the recurrence of the recent
tragedy in Cameron Highlands, the Government will approve an allocation
of RM40 million to widen and deepen Sungai Bertam.
158. To improve efficiency and electricity energy conservation, the
Government will undertake energy audits as well as install retrofit in
ministry buildings. For 2014, the Ministry of Health; Ministry of Youth
and Sports; Ministry of Human Resources; Ministry of Domestic Trade,
Co-operatives and Consumerism; and the Ministry of Agriculture and
Agro-based Industry have been identified for the implementation of the
initiative. In addition, the Government will install solar panels on
rooftops of ministry buildings as well as replace existing lights with
LED lights in stages.
Quality Healthcare Services
159. The Government will continue to provide quality healthcare and
medical services for the rakyat. For this, a sum of RM22.1 billion will
be allocated for the health sector under operating and development
expenditure. The allocation will be channelled to programmes and
projects, including the construction of Hospital Tanjung Karang and
additional blocks for Hospital Jeli; as well as the upgrading of
Hospital Kuala Lipis and 30 rural clinics.
160. In addition, the Government will allocate RM66 million for the
purchase of equipment and the construction of additional blocks in
Hospital Queen Elizabeth in Kota Kinabalu. The Government has set up 234
1Malaysia clinics, and another 50 additional 1Malaysia clinics will be
established in 2014. To address the shortage of parking lots at Hospital
Kuala Lumpur, a total of 1,950 new parking lots will be completed in
2014. Meanwhile, hospitals in Rompin and Tampin as well as National
Cancer Institute will be operational early next year.
161. To improve the quality of nursing care and reduce the nurses’
workload of working continuously in two shifts, the Government will
appoint 6,800 more nurses with an allocation of RM150 million. Apart
from this, a total of RM3.3 billion will be allocated for the purchase
of medicine and medical equipment to ensure patients receive appropriate
treatment including expanding the cardiothoracic services in Hospital
Ipoh, Kuala Terengganu, Kuantan and Kuching.
162. The Government recognises the difficulty of patients with kidney
failure having to go to the haemodialysis centre for dialysis 3 times a
week. Patients spend up to RM400 for each treatment. To facilitate
patients with end state kidney failure, the Government will provide free
treatment kits called Continuous Ambulatory Peritoneal Dialysis (CAPD)
costing RM19,000 per unit. The initiative which is expected to benefit
over 1,000 patients will allow them to be treated at home.
163. Statistics indicate that 2.6 million Malaysians under the age of
30 are diabetic. If left untreated, patients will face various
complications such as heart disease, kidney failure, blindness and
amputation. In relation to this, the Government proposes to abolish the
sugar subsidy of 34 sen effective 26 October 2013. I urge all Malaysians
to take care of their health and reduce sugar in your food and drinks.
Development of National Sports
164. Sports development requires a comprehensive ecosystem, including
infrastructure, management and coaching, talent building and welfare of
athletes from an early age. Therefore, a sum of RM239 million is
allocated to pursue excellence in sports including upgrading sports
complexes and courts, establishing Pilot Talent Identification Programme
in primary schools and to implement the Future Professional Coach
Programme to hone the skills of potential coaches for selected sports.
165. In addition, the Government will allocate RM150 million to the
Sports Trust Fund for the development of elite sports, medical treatment
and research. Furthermore, the Government will make thorough
preparations to ensure the success of athletes in international sports
competitions, including 2014 Asian Games in Incheon; 2014 Youth Olympics
in Nanjing; and the 2015 Commonwealth Games in Glasgow.
Enhancing the Role of Women and Well-being of Families
166. Women not only play an important role in their families but also
contribute significantly to nation building. Their contribution has
been highly recognised. In this regard, programmes for the development
of women and family institution will be continued with an allocation of
RM2.2 billion to the Ministry of Women, Family and Community
167. Various programmes will be implemented, including Akademi
Inovasi Wanita under the purview of Institut Tadbiran Awam Negara
(INTAN). The academy will draw up programmes relating to leadership,
entrepreneurship, and innovation.
168. Some of the programmes include the Women Directors Programme
which prepares women to be members of Board of Directors; Purple DNA
Entrepreneurship Programme such as “Purple Licious”, a mobile food
kiosk; and an additional 23 Senior Citizens Activity Centres.
169. The Government will also double the rate of daily allowance for
children in institutions under the Department of Social Welfare (JKM)
from RM1.50 per day to RM3 per day for school going children and from
RM0.50 to RM1.00 per day for children who have not started schooling.
The scheme will benefit 4,500 children in JKM institutions nationwide.
In addition, the daily allowance for senior citizens in JKM institutions
will be raised from RM10 to RM30 a month to cater for their daily
170. To ease the burden of civil servants, the eligibility to qualify
for the subsidy of public sector TASKA fee of RM180 per month is now
extended to households with a monthly income of RM5,000 compared with
171. In addition, the Government is proposing a monthly assistance of
RM250 in nursery fees, to parents with a monthly income of not more
than RM900 and who enrol their children in private nurseries registered
under JKM. The move will benefit 3,334 children under the age of 4, and
involve an allocation of RM15 million.
172. As an addition to the Human Papilloma Virus immunization
services and mammogram screening, the Government is proposing a free
breast prostheses and special bras for breast cancer patients. The
initiative will assist in offsetting the cost of purchasing the support
material which is estimated to cost about RM1,200 and will benefit more
than 8,000 breast cancer patients. The allocation set aside for this is
173. I would like to announce that the Government will purchase four
special buses for the implementation of the Mobile Family Centre which
will provide advisory services related to family matters; dietary
requirements; screening for chronic disease; as well as testing for
glucose and cholesterol.
174. The aspiration to achieve a developed and high income nation
status can only be achieved through concerted efforts by all, especially
the Bumiputera. The Government is committed to further strengthening
the participation of Bumiputera in the economic development of the
country and make the Bumiputera agenda a national agenda.
175. For this, the Government will implement various programmes
including intensifying skills training for youth and Professional
Leaders Programme as well as increasing student intake into UiTM to
250,000 by 2020.
176. Student population in UiTM has reached 180,000. In addition, the
Government will increase Bumiputera equity holdings and property
ownership through the Skim Jejak Jaya Bumiputera (SJJB), Skim Amanah
Saham Bumiputera 2 and strengthen the Bumiputera real estate
177. To increase Bumiputera equity ownership, SME Bank will establish
Bumiputera Equity Fund (EquiBumi) with an allocation of RM300 million
to provide loans to credible Bumiputera companies to take over listed
companies or companies with potential to be listed on Bursa Malaysia.
178. In addition, an allocation of RM200 million is provided by the
SME Bank for loan facility for the development programmes for Malay
Reserve Lands in strategic areas such as Kampung Baru, Kampung Pandan
and Kampung Datuk Keramat. This facility will help to improve the
standard of living of the Malay community in line with the rapid
development in the surrounding area.
179. The Government will continue to increase Bumiputera
participation in business and entrepreneurship to generate income and
wealth. Among programmes to be implemented are the establishment of
Bumiputera Entrepreneurs Start-Up Scheme (SUPERB) with an initial fund
of RM30 million.
180. In addition, to enhance the vendor development programmes, the
Government proposes that expenses incurred by anchor companies,
especially GLCs be given double tax deduction.
181. To increase business opportunities and access to funding for SME
entrepreneurs, soft loan facilities will also be provided. Among the
financing facilities are the Amanah Ikhtiar Malaysia with funds
totalling RM300 million and TEKUN with RM700 million.
Assisting the Disabled (OKU)
182. We recognise that everyone is special and we are all perfect in
the eyes of God. In relation to this, the contribution of OKU is highly
appreciated. Many facilities have been provided for their well-being and
to maximise their potential. The Government will allocate RM441 million
for the development and welfare of OKU.
183. Artistes are an integral part of civilisation. In appreciation
of their contribution, the Government proposes to continue providing
financial assistance amounting to RM6 million for administration and
operations of registered associations.
Development of Malaysian Indians
184. It is said that kindness should be reciprocated with kindness. I
would like to thank all Malaysian Indians who supported the Barisan
Nasional Government in the 13th General Election.
185. The Government will continue to focus on the development of
Malaysian Indians so that they are part of mainstream development. For
this, the Government will allocate RM100 million for enhancing education
performance and skills training, including RM28 million for early
education programmes, involving 176 Tamil pre-schools and i-Sinar
186. The programme will improve the performance of students through
counselling, motivation and tuition in 45 Tamil schools in estates. In
addition, an allocation of RM50 million will be provided through the
Skim Pembiayaan Muda India (SPUMI) under TEKUN while loans are also
available for Malaysian Indian entrepreneurs through Amanah Ikhtiar
Increasing Home Ownership
187. I hear the grouses of the rakyat who wish to own a comfortable
home, especially from those in the low and medium- income groups.
Various concerns have often been raised, such as soaring house prices,
inadequate supply of houses and difficulties in getting financing.
188. The recent sharp increase in the prices of houses has affected
the ability of the rakyat to purchase houses. In addition, speculative
activities have an impact on house prices and can adversely affect the
real estate market in the long term.
189. To increase the ability of the rakyat to buy a house and ensure
stable house prices, as well as to control excessive speculative
activities, the Government will implement the following steps :
First: Review Real Property Gains Tax (RPGT). For gains on properties
disposed within the holding period of up to 3 years, RPGT rate is
increased to 30%, whereas for disposals within the holding period up to 4
and 5 years, the rates are increased to 20% and 15%, respectively. For
disposals made in the sixth and subsequent years, no RPGT is imposed on
citizens, whereas companies are taxed at 5%.
For non-citizens, RPGT is imposed at 30% on the gains from properties
disposed within the holding period of up to 5 years and for disposals
in the sixth and subsequent years, RPGT is imposed at 5%.
Second: Increase the minimum price of property that can be purchased by foreigners from RM500,000 to RM1,000,000;
Third: Increase transparency in property sales price, where property
developers will have to display detailed sales price including all
benefits and incentives offered to buyers such as exemption of legal
fees, stamp duty, sales agreements, cash rebates and free gifts; and
Fourth: Prohibit developers from implementing projects that have
features of Developer Interest Bearing Scheme (DIBS), to prevent
developers from incorporating interest rates on loans in house prices
during the construction period. Therefore, financial institutions are
prohibited from providing final funding for projects involved in the
190. To further increase access to home ownership at affordable
prices, an estimated 223,000 units of new houses will be built by the
Government and the private sector in 2014. The Government will allocate
RM578 million to the National Housing Department (JPN) for the
implementation of Program Perumahan Rakyat which involves the
construction of 16,473 housing units. In addition, JPN will construct
600 units for Program Perumahan Rakyat Disewa and Perumahan Rakyat
Bersepadu with an allocation of RM146 million.
191. PR1MA will provide 80,000 housing units with an allocation of
RM1 billion. The sales price of PR1MA houses are 20% lower than market
prices. Meanwhile, SPNB will build 26,122 units of affordable houses,
comprising 15,122 units of affordable houses, 3,000 units Rumah Idaman
Rakyat and 8,000 units of Rumah Mesra Rakyat. The Government will
introduce a new category of Rumah Mesra Rakyat, with sales price between
RM45,000 and RM65,000 for which the Government will provide a subsidy
between RM15,000 to RM20,000 per unit.
192. The Government will also introduce the Private Affordable
Ownership Housing Scheme (MyHome) as a step to encourage the private
sector to build more low and medium-cost houses. The scheme provides a
subsidy of RM30,000 to the private developers for each unit built. Among
the criteria for the scheme are:
First: Build at least 20% low-cost houses and 20% medium-cost houses in a housing project;
Second: The maximum price of low-cost houses is RM45,000 and medium-cost houses is RM170,000;
Third: The minimum built-up area of low-cost houses is 800 square
feet and the medium-cost houses, 1,000 square feet, with a minimum of 3
bedrooms and 2 bathrooms;
Fourth: Provide parking, surau, hall and recreational park; and
Fifth: Open to first-time buyers with a monthly household income of
RM3,000 for low-cost houses and a maximum of RM6,000 for medium-cost
193. Preference will be given to developers who build low and
medium-cost houses in areas with high demand and limited to 10,000 units
in 2014. The scheme is for housing projects approved effective from 1
January 2014 with an allocation of RM300 million under the supervision
of Ministry of Urban Wellbeing, Housing and Local Government.
194. Currently, PR1MA housing projects, housing in newly opened areas
and 1Malaysia Civil Servants’ Housing Programme are eligible to apply
for grants at 10% of the project cost, from the Facilitation Fund. For
2014, the Government will provide a total of RM4 billion to the
Facilitation Fund as an initiative to promote private, high-strategic
195. Of this, I propose that RM1 billion is allocated to the Housing
Facilitation Fund under Public Private Partnership Unit (UKAS).
Developers who receive this grant must abide by the terms and conditions
as well as the sales prices which are set by the Government.
196. The Government will also carry out a refurbishment program and
improve comfort and beautify government-owned low-cost housing. Among
the measures to be implemented include lift maintenance, repainting the
house, cleaning up drains and landfill space and repair playgrounds.
197. To this end, a sum of RM100 million will be provided to
1Malaysia Maintenance Fund under the Ministry of Urban Well-being,
Housing and Local Government. The Government will also allocate RM82
million to rehabilitate 20 abandoned housing projects involving 8,197
198. To further strengthen the real estate market and increase
opportunities for the rakyat to own houses, the Government will
implement a more effective and comprehensive approach. In this regard, I
am pleased to propose the establishment of the National Housing Council
to develop strategies and action plans in a holistic manner; coordinate
legal aspects and property price mechanism; and ensure provision of
homes in a more efficient and expeditious manner. The Council members
will comprise Federal Agencies, State Governments, the National Housing
Department, PR1MA, SPNB and the private sector.
Price Uniformity Programme
199. The Government is aware that prices of essential goods are more
expensive in Sabah and Sarawak compared with Peninsular Malaysia, due to
higher shipping and distribution costs. To help reduce prices of goods
and costs, the Government will allocate a sum of RM331 million to
continue the price uniformity programme and subsidies including
200. Additionally, 60 Kedai Rakyat 1Malaysia (KR1M) will be set with an
allocation of RM30 million to help reduce the prices of daily
Tax Relief for Middle-Income Group
201. The Government has never neglected the middle-income group who
form the largest number of tax payers. They are also burdened by
increasing cost of living. To further assist this group, the Government
proposes a special tax relief of RM2,000 be given to tax payers with a
monthly income up to RM8,000 received in 2013.
202. This measure will result in tax savings up to RM480. This group
is already enjoying tax savings up to RM475 on income received in 2013
with the reduction of tax rates announced by the Government in the last
203. We are grateful that we remain united, live in peace and harmony
and have developed the nation since independence on 31 August 1957.
204. On 16 September 1963, history was created when Sabah and Sarawak
joined Malaysia. It is clearly evident that this unity and togetherness
have brought blessings to Malaysia.
205. For more than five decades, the Barisan Nasional Government has
earned the rakyat’s trust through power sharing and consensus among
206. The Barisan Nasional Government has never been reckless in
managing the nation. Instead we have been very committed and serious.
207. In all our endeavours, we have always put the interest and the well-being of the people first.
208. The Government values the contribution of civil servants who
play a vital role in implementing policies and programmes for national
development. Hence, in July, the Government gave an additional annual
increment to all civil servants involving an allocation of RM1.6
209. In addition, the Government gave three increments to those who
have reached their maximum pay in all schemes of service, benefiting
182,434 civil servants. Thus, this evening, I am glad to announce that
the Government has agreed to improve 81 schemes of service from
Bantuan Rakyat 1Malaysia (BR1M)
210. In efforts to reduce the burden of the rakyat, I am glad to
announce the BR1M to households and single individuals will be improved
in line with targeted subsidy programme.
211. BR1M to households with a monthly income of below RM3,000 will be increased from RM500 to RM650.
212. For single individuals aged 21 and above and with a monthly
income not exceeding RM2,000, BR1M will be increased from RM250 to
213. To complement the BR1M programme, I propose a contribution of
RM50 to the Group Takaful Rakyat 1Malaysia (i-BR1M), for all BR1M
household recipients. The initiative will provide protection of up to
RM30,000 to BR1M recipients in the event of death or permanent
214. In short, all BR1M households recipients with a monthly income
of not more than RM3,000 will enjoy financial assistance of RM700.
215. For the first time, BR1M assistance of RM450 will be extended to
households with a monthly income of between RM3,000 and RM4,000. The
assistance is given to alleviate the rising cost of living borne by the
lower middle-income group.
216. This group will also enjoy the RM50 contribution to i-BR1M
bringing the total BR1M assistance to RM500. To implement all the 2014
BR1M packages, the Government will allocate RM4.6 billion which is
expected to benefit 7.9 million recipients.
Valuing the Contribution of Civil Servants
217. Last August, just before the Eid Celebrations, civil servants
and pensioners received special financial assistance of RM500 and RM250,
218. Today, I am pleased to announce that pensioners will receive a
special financial assistance of RM250 to assist them meet the rising
cost of living.
219. For civil servants, I announce a half-month bonus for 2013 with a
minimum payment of RM500 to be paid in early January 2014.
220. This is a post-election budget which fulfils promises made
during the election. Our efforts will not end here. On the contrary, the
Barisan Nasional will continue to lead the nation with vigour and
courage for the next 50 years.
221. However, our noble efforts will always be criticised by our colleagues on the other side of the aisle.
222. Be that as it may. The truth will always prevail.
223. Even John Kerry, the US Secretary of State who visited us
recently acknowledged Malaysia as a model for the rest of the world in
various aspects of development. The President of China, Xi Jinping also
praised Malaysia as a loyal friend and partner who can be trusted in
good and bad times.
224. Despite all the allegations we will not give up easily but will continue to work hard for the rakyat and the nation.
225. We acknowledge that there may be some weaknesses in our
administration in the past. However, we have always placed the rakyat’s
interest above all else. With the solid support of the rakyat, we will
continue to improve.
226. If we remain united, there are no problems that cannot be solved.
227. We assure you that we will not allow irresponsible people to
take over the Government. We will defend Putrajaya for the rakyat and
our beloved nation.
228. The 2014 Budget will take Malaysia to greater heights and
competitiveness in the international arena. God willing, we will table
six more budgets before the nation becomes a high-income and developed
nation by 2020.
229. In the interest of the rakyat, we hope that the 2014 Budget is blessed by The Almighty.
230. In conclusion, we have given our best and leave the rest to The
Almighty. May He bless and keep Malaysia safe and prosperous.