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8:52 am


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 2018 and to appropriate that sum for the service of that year” be read a second time.

In the name of Allah, the Most Gracious, the Most Merciful.


1.    There is no God but Allah, and Muhammad is the messenger of Allah. Send your blessings to our Prophet Muhammad SAW, and salute him with all respect.

2.    Greetings, Salam Negaraku and Salam 1Malaysia to Mr.

Speaker Sir, Members of Parliament, Ladies and Gentlemen and all Malaysians from Northern Perlis to Tanjung Piai in the South as well as Sabah and Sarawak.

3.    Many may have predicted that the 2017 Budget was an Election Budget.

4.    This is expected as there were many initiatives and allocations announced for the rakyat and in the interest of the nation. However, their predictions were untrue.

5.    Last week,  our Indian friends celebrated the Festival of Lights or Deepavali. We wish Happy Deepavali to all. As Friday being an important day for Muslims, let’s celebrate together.

6.    As such, I would call upon the rakyat to rejoice in receiving the gifts, rewards and incentives, which will be presented in this Budget, subject to a condition.

And    the    condition    is    that    you    follow    through    this presentation from the beginning to the end.

7.    I am standing here, on this day, 27 October 2017 or 7 Safar 1439 Hijri, to bring good and happy news, which will put smiles on every face.

8.    This good news is for all beloved Malaysians to enjoy, regardless of race and background.

9.    It is clear that every segment of society will reap the benefits from this Budget.

10.    Hence, on behalf of the Government, let us first immerse and analyse on what I am about to present. Otherwise, you will miss the good news.

11.    In building a civilised nation, we should always be gracious, forgive and forget.


12.    First, let us be grateful to Allah SWT for the continued positive expansion of our economy.

13.    During the first half of 2017, the economy recorded a sterling growth of 5.7%.

14.    Therefore, we should not fall for lies and non-stop propaganda on social media by irresponsible parties, stating that the World Bank has issued negative reports on the nation’s economy.

15.    In fact, the World Bank has revised their forecasts on the East Asia and Pacific region.

16.    The World Bank has revised upwards Malaysia’s GDP forecast from 4.9% to 5.2% for 2017 and commended the country’s economic performance for its laudable policies.

17.    In addition, the Government forecasts the Malaysian economy to record an annual growth between 5.2% and 5.7% in 2017, higher than the March estimates ranging between 4.3% and 4.8%.

18.    For the past eight years, amid economic challenges, Malaysia    has made significant development in two important aspects:

First: Strengthening and deepening diplomatic and trade relations with the world’s largest economic powers such as China, India, Saudi Arabia and the United States.

Furthermore, private investment has increased significantly to more than RM211 billion compared with RM81 billion in 2009.

Second: Since 2009, the country has been facing various external challenges such as plummeting global crude oil prices and international geopolitical tensions. Notwithstanding these uncertainties, we remain steadfast in managing country’s finances, practising efficient governance and prudent fiscal discipline.

With systematic and organised plans and strategies, and initiatives, the nation’s fiscal deficit is estimated to be reduced to 3% of GDP in 2017 from 6.7% in 2009. We are confident that it will be further improved to 2.8% in 2018.

As a result, three prestigious international credit rating agencies have maintained their ratings on Malaysia as ‘A-’ with a stable prospect.

19.    Let us all work hard to ensure fruitful outcomes.

20.    Most importantly, amid various external headwinds, we should maintain our strong economic growth momentum and dynamism.

21.    Hence, the Government introduced several transformation programmes under the National Transformation Policy (NTP) in 2009. The policy emphasises on quality and efficiency of the    public service delivery system, particularly in stimulating economic growth.

22.    The NTP also encompasses the New Economic Model which is in line with both the 10 Malaysia Plan (10MP) and 11 Malaysia Plan (11MP).

23.    Since 2009, economic initiatives have been the main focus of    the Government, followed by other programmes, according to its importance, including the Political Transformation Programme.

24.    Hence, all the initiatives implemented by the Government for the past eight years have been successful. These include:

First: About 2.26 million jobs were created, which is 69% of the 3.3 million job opportunities targeted by 2020;

Second: In August, exports peaked to one of its highest levels, exceeding RM80 billion and recorded a double-digit growth; and

Third: Currently, the international reserves amounted to USD101.4 billion or RM428.7 billion, which is sufficient to finance 7.5 months of retained imports compared with USD21.7 billion or RM59.1 billion during the Asian Financial Crisis in 1997.

25.    In addition, the 2016 Report of Household Income and Basic Amenities Survey has highlighted our achievements, which include:

First: Income per capita has increased from RM27,819 in 2010 to RM40,713 in 2017 and is expected to increase further to RM42,777 in 2018;

Second: Monthly median income has also increased from RM4,585 in 2014 to RM5,288 in 2016;

Third: For the B40 household income, the monthly median income has increased from RM2,629 to RM3,000 between 2014 and 2016; and

Fourth: Household income distribution in Malaysia has improved with the Gini coefficient reduced from 0.441 in 2009 to 0.399 in 2016, the lowest in the history of Malaysia. This reflects narrowing income gap as the country progresses towards a more equal distribution.


26.    In the interest and prosperity of the rakyat, the 2018 Budget    will allocate a sum of RM280.25 billion, an increase in allocation as compared with RM260.8 billion in the 2017 Budget.

27.    Of which, RM234.25 billion is allocated for Operating Expenditure (OE), while RM46 billion for Development Expenditure (DE). This allocation does not include Contingencies which amounts to RM2 billion.

28.    Under the OE, a total of RM79.15 billion is for Emolument and RM33.62 billion for Supplies and Services.

29.    Meanwhile, a sum of RM119.82 billion is allocated for Fixed Charges and Grants. A sum of RM1.08 billion is allocated for Other Expenditures, while RM577 million for the Purchase of Assets.

30.    Under the DE, the economic sector will receive the highest share of RM26.34 billion. The social sector is allocated a sum of RM11.72 billion. Meanwhile, the security sector will be    allocated a sum of RM5.22 billion and the general administration RM2.72 billion.

31.    For 2018, the Federal Government’s revenue collection is expected to record RM239.86 billion.

32.    Of significance, the Government is committed to implement fiscal    consolidation measures and to ensure that the Government’s financial position continues to be resilient, and debt level remains low in the medium- and long-terms.

33.    This Budget is most vital as it summarises all the initiatives that has spurred the economy since I took office in 2009.

34.    Indeed, it is one of my main report cards to the rakyat and the Government under my leadership during my two-term administration.

35.    Hence, this document will chart the course in building a Malaysian Nation for the next 30 years crafted on a new canvas based on SHARIAH REQUIREMENT FRAMEWORK.

36.    Since we declared Independence, we have been fortunate as our forefathers have governed and administered this country embedded with shariah requirements. This framework emphasises  on five aspects, namely religion, life,    intellectual, lineage and wealth in each of Government’s plan and policy.

37.    This was clearly mentioned in Surah al-Mumtahanah verse 12, of the importance to provide basic necessities for the rakyat (Dho’ruriyat).

38.    Meanwhile, through interpretation of Surah al-Hajj and Hadith Riwayat Ahmad, Haajiyat refers to matters relating to    easing the burden of the rakyat and providing a comfortable life. Third, Tahsiniyat means luxurious needs.

39.    Therefore, for the past six decades, all Barisan Nasional’s efforts have been inspired by Allah SWT to ensure that leaders are guided by the shariah requirement framework.

This framework is further solidified with Federal Constitution; Rukunegara; 1Malaysia People’s First, Performance   Now   philosophy;   and   the   latest   TN50

aspiration. These reflect the continuity of Government’s administration, practising moderation and rejecting extremism.

40.    Hence, the alternating leadership of this Party has structured its entire policies and strategies based on the shariah requirement framework.

41.    While this framework has not been written in any Government documents, but its practices are reflected in all inter-related national philosophies and policies.

42.    In a nutshell, the shariah requirement framework adopted by the Government is targeted to benefit the rakyat as a whole, taking into account of Government’s capabilities, following    the three priorities namely Dho’ruriyat, Haajiyat and Tahsiniyat.

43.    It is then proven that the Barisan Nasional Government has the    wisdom and experiences of 60 years, which are fundamental in developing and building a proud nation state.

44.    Therefore, based on these principles and philosophies, and with the blessings of Allah, I present you the 2018 Budget.

45.    The 2018 Budget was formulated in line with the 11MP and this is the third Budget under the Plan. In order to ensure the nation’s wealth and prosperity to be enjoyed equitably

and inclusively through strong economic growth and competitiveness, this Budget with the theme “PROSPERING AN INCLUSIVE ECONOMY, BALANCING BETWEEN WORLDLY AND HEREAFTER, FOR THE WELLBEING OF RAKYAT,  TOWARDS  TN50  ASPIRATION”  is  based  on
Eight Main Thrusts.


46.    Total investment in the country is expected to increase by

6.7%, accounting for 25.5% of GDP in 2018.

47.    In this regard, the Government will continue to emphasise on high-impact investment, focusing on industries related to petroleum, logistics, aerospace, rail, robotics and automation, and export-oriented industries.

48.    Private investment has continued to outpace public investment with a ratio of 70:30. Private investment is estimated to reach RM260 billion in 2018 compared with only RM81 billion in 2009.

49.    Meanwhile, public investment is estimated to record RM109 billion compared with RM75 billion in 2009. In this in line with the objective of Economic Transformation Programme (ETP) to propel the private sector as engine of growth.

50.    This includes a sum of RM1 billion allocated for the Five Main Corridors. The Government will develop the South Perak Region comprising Proton City, Educity and Youth City in Tanjung Malim as well as Bukit Kayu Hitam Duty- Free Zone; construction of port and industrial park in Tok Bali, Kelantan; and access road to Baleh Dam, Sarawak.

51.    At the same time, in order to place Malaysia as a preferred investment destination, the Principal Hub tax incentive will be extended until 31 December 2020. The Government will allocate RM200 million to the high-impact strategic fund under MIDA.

52.    Malaysia is committed to economic information sharing introduced by the OECD. These include implementation of the Base Erosion and Profit Shifting Plan of Action as well    as the Automatic Exchange of Information commencing September 2018.

Enhance Small and Medium Enterprises

53.    Malaysia will progress further through inclusive participation of small and medium enterprises (SMEs). Currently, we have Jeruk  Pak Ali, Sydney  Cake  House, Satay Haji Samuri and Telekung Siti Khadijah which have established their brands, with some having presence in international markets.

54.    We welcome them to Parliament and congratulate them for their hard work and achievements.

55.    It is targeted that SMEs will contribute 41% of GDP by 2020, through the following measures:

First:    A total of RM7 billion is allocated under the Skim Jaminan Pembiayaan Perniagaan (SJPP), of which, RM5 billion for working capital and RM2 billion with 70% guaranteed by the Government for    services sector, including Industrial Revolution (IR 4.0);

Second: An unprecedented amount of RM1 billion is provided as loans to companies with 70% guaranteed by the Government. These loans are provided under SJPP to enable SMEs to automate production processes and reduce employment of foreign workers;

Third:    An additional RM1 billion is provided to the Shariah-compliant SME Financing Scheme, increasing the fund size to RM2.5 billion. A subsidy of 2% will be provided on profit earned to ease the costs of financing;

Fourth: A sum of RM200 million is allocated to SMEs for training programmes, grants, and soft loans under the SME Corp; and

Fifth:    About RM82 million is allocated for the development of halal industries and products under various agencies.

Micro Financing

56.    The Government also includes micro entrepreneurs such as the popular coconut shake seller in Klebang, Melaka in this Budget.

57.    For this purpose, the Government provides the highest allocation to TEKUN, amounting to half a billion ringgit.

58.    In addition, to appreciate Amanah Ikhtiar Malaysia’s (AIM) borrowers of which the majority are women and good paymasters, the Government will allocate an additional RM200 million to the fund. With this, total fund size will be RM2.7 billion, benefitting nearly 400,000 borrowers.

59.    One success story is on Kak Wan Azizah Wan Salleh who started her business in 1993 with a loan of RM500 from AIM became a successful millionaire in poultry farming.

60.    Furthermore, a sum of RM80 million is allocated under the Rural Economic Financing Scheme (SPED) through Bank

Rakyat and SME Bank to provide financing facilities to rural Bumiputera entrepreneurs.

Accelerating Exports

61.    The country’s exports will be further accelerated by focusing on high-impact export sectors, through the following measures:

First:    A sum of RM150 million is provided to MATRADE, MIDA and SME Corp to implement promotional programmes, and expand export markets including Market Development Grant;

Second: A sum of RM1 billion is provided by EXIM Bank for    insurance coverage credit facilities and RM200 million for credit financing facilities to SME exporters; and

Third:    A sum of RM100 million is provided as loan with 70% guaranteed by the Government to automate production of local furniture for exports.

Boosting Agricultural Sector

62.    The Government cares for paddy farmers, farmers, smallholders, fishermen and others in the agriculture sector.

63.    As such, for the first time in the history of the nation’s Budget, a large allocation of RM6.5 billion is provided to assist    farmers, fishermen, smallholders and rubber tappers. Among the various programmes to be implemented are:

First:    A sum of RM2.3 billion is allocated to provide assistance and incentive such as fertilisers and input to paddy farmers, rubber smallholders and fishermen;
Second: About RM500 million is allocated to improve irrigation infrastructure and upgrade plantation roads;

Third:    About RM200 million is allocated for rubber replanting programme and provide infrastructure to increase production of latex instead  of cup lump    as this will raise the income of smallholders;

Fourth: About RM140 million is allocated to developing and replanting of oil palm as well as enhance marketing programmes;

Fifth:    A sum of  RM200 million is  allocated for the agricultural programme as new sources of income, particularly the development of dairy industry through the establishment of Lembaga Tenusu    dan Ruminan. Others include the development of corn, coconut, durian and culinary industry. For example, in Hong Kong it is said that the price of a Mawsang King durian is sold at RM800.

Sixth: For the first time, a special scheme will be implemented to increase the production of coconuts through replanting of new varieties, namely CARECA and MATAG. This scheme will be    implemented with an allocation of RM50 million, benefitting 10,000 smallholders.

Meanwhile, the management of coconut, pineapple and fruits industries will be placed under one Board; and

Seventh: For the first time, I would like to announce a monthly assistance of RM200 for three months to paddy farmers while waiting for the harvest

season    with    an    allocation    of    about    RM150 million.

Boosting Tourism Industry

64.    The tourism sector is one of the key sources of income to the nation’s economy.

65.    According to the World Tourism Organisation Report, in 2016 Malaysia was ranked at 12th position in terms of tourist arrivals.

66.    It is estimated that there will be 28 million tourist arrivals in 2018. As such:

First:    I am pleased to announce that 2020 is declared as the Visit Malaysia Year. In 2020, Malaysia will also host series  of international meetings, namely APEC, WCIT and CHOGM;

Second: A sum of RM2 billion is allocated to SME Tourism    Fund to provide soft loans to tour operators with an interest subsidy of 2%;

Third:    An additional RM1 billion is provided to the Tourism Infrastructure Development Fund as soft loans;

Fourth: A sum of RM500 million is provided to develop and    promote tourism through upgrading infrastructure facilities as well as promoting homestay and eco-tourism programmes;

Fifth:    Expand eVisa regional hub by facilitating visa application worldwide, especially for expatriates, foreign students, and Malaysia My Second Home Programme (MM2H);

Sixth: Extend tax incentive for investment in new 4-and 5-star hotels until 31 December 2020; and

Seventh: Extend tax incentive for tour operators to year of assessment 2020.

67.    The health-tourism industry will be strengthened as one of the country’s sources of income. This includes providing end-to-end service for medical tourists coming to Malaysia.

68.    In this respect, the Government is allocating RM30 million to    Malaysian Healthcare Travel Council (MHTC) to implement the following initiatives:

First:    Promote Malaysia as the Asian Hub for Fertility Treatment, including IVF and Cardiology. The eVisa    facility  will  be  extended  to  cover  other

specialised    medical    services    and    high-value healthcare packages;

Second: Introduce Flagship Medical Tourism Hospital Programme, which offers special incentive to private hospitals to attract medical tourists;

Third:    Extend the investment tax allowance (ITA) of 100%    for medical tourism until 31 December 2020;

Fourth: Provide double tax deduction on expenses incurred    in obtaining certification from healthcare services accreditation bodies for dental and ambulatory services registered with MHTC; and

Fifth:    Increase the special tourism healthcare incentive from 50% to 100% of the incremental value of exports, for private healthcare services, beginning year of assessment 2018 to 2020.

Driving Logistics Sector

69.    In  order  to  ensure  a  more  balanced  economic  spillover between    urban    and    rural    areas,    the    Government    will

improve    logistics    and    transport    infrastructure,    through these measures:

First:    East Coast Rail Link (ECRL) Project which connects Port Klang to Pengkalan Kubor, Kelantan has the capacity to transport cargo and passengers within four hours. The construction work of this project will begin in January 2018;

A sum of RM110 million is also allocated to provide an alternative road to Port Klang to smoothen and complement the transportation network;

Second: MRT2 Line from Sungai Buloh – Serdang – Putrajaya Project, spanning 52 kilometres, covering 37 stations with an estimated construction cost of RM32 billion.

Meanwhile, the Government will expedite the construction of MRT3 or Circle Line to be completed by 2025, earlier than the initial target in 2027.

Furthermore, the construction of LRT3 project which will connect Bandar Utama to Johan Setia, Klang is expected to be completed by February 2021.

Third:    High Speed Rail Project connects Kuala Lumpur and Singapore with a distance of 350 kilometres in 90 minutes, is expected to benefit rakyat by 2026;

Fourth: West Coast Highway from Banting, Selangor to Taiping,    Perak is under construction with an estimated cost of RM5 billion.

Fifth:    For the Central Spine Road, a sum of RM230 million is allocated in 2018 to continue the construction work, among others, road from Raub to Bentong and Gua Musang, Kelantan to Kampung Relong, Pahang;

Sixth: Declare Pulau Pangkor in Perak as Duty-Free Island. However, the duty-free status excludes products such as alcoholic beverages, tobacco and motor vehicles; and

Seventh: To stimulate the economic growth in the northern area, a Special Border Economic Zone in Bukit Kayu Hitam will be developed.

This development includes Free Industrial Zone (FIZ) which will be a new attraction for both domestic and foreign investors.

70.    Furthermore, the Government will take a holistic approach to meet the basic needs of the rakyat by providing efficient and safe public transportation system through the following measures:

First:    A sum of RM3 billion is allocated to Transportation Development Fund to procure vessels as well as develop aerospace technology industry and rail;

A sum of RM1 billion is also allocated to Public Transportation Fund for working capital and procurement of assets such as buses and taxis;

Second: A sum of RM95 million is allocated to upgrade and    construct jetties as well as dredge river estuaries;

Third:    Following many express bus accidents, a sum of RM45 million is allocated to develop a biometric control system to monitor the bus drivers; and

Fourth: A sum of RM55 million is provided to subsidise train services in rural areas, from Tumpat to Gua Musang;

71.    The Government will implement various initiatives to safeguard the welfare of rakyat irrespective of political differences and geographical locations to enhance economic growth.

First: Upgrade Pulau Pinang International Airport and Langkawi International Airport;

Second: Construction of a new airport in Mukah as well as    expansion of airports in Kota Bharu and Sandakan;

Third:    A study is being undertaken by the Government on a new airport in Pulau Tioman; and

Fourth: To stimulate development in Labuan, the Government will conduct a feasibility study for the construction of a bridge connecting Labuan with the mainland in Sabah.

Strengthening Financial Market

72.    Malaysia is renowned as the leader in Islamic finance. As such, to strengthen Malaysia’s position as a comprehensive and    competitive financial centre, the Government will continue with the following measures:

First:    A sum of RM1.5 billion is allocated under SJPP, using intellectual property as an instrument of financial collateral with up to 80% financing guarantee; and

Second: Provide tax exemption on stamp duties imposed on    contract notes for sales and purchase transactions of Exchange-Traded Fund and Structured Warrants for 3 years, effective January 2018.

73.    To stimulate capital market and provide access to investment, the Alternative Trading System will be introduced subject to compliance to all requirements and regulatory standards. This will enable efficient and significant transactions.

74.    The Government understands the constraints of small companies such as start-ups in obtaining financing to expand their market.

75.    Therefore, the Government encourages venture capital activities through the following measures:

First:    A sum of RM1 billion is provided by major institutional investors for investment in venture capital in main selected sectors, coordinated by Securities Commission (SC);

Second: Expand income tax exemption to include management and performance fees received by venture capital management company, effective from year of assessment 2018 to 2022;

Third:    To facilitate venture capital companies to invest in venture companies, it is proposed that the minimum investment in venture companies be reduced from 70% to 50%, effective year of assessment 2018 to 2022;

Fourth: Companies or individuals investing in venture capital companies is provided tax deduction equivalent to the amount of the investment made in the venture companies, limited to a maximum of RM20 million annually; and

Fifth:    Extend the income tax exemption incentive equivalent to the amount of investment made by an angel investor in venture companies to 31 December 2020.

76.    The Government will continue to invigorate the sustainable and    responsible investment (SRI) through the following measures:

First:    Income tax exemption for recipients of the special Green SRI Sukuk grant totalling RM6 million; and

Second: Income tax exemption on income from management fee to be expanded to approved conventional SRI fund managers from year of assessment 2018 to 2020.

77.    The Government will promote a cashless society economy through effective employment of foreign workers. Beginning 2018, Bank Negara Malaysia will monitor salary payment through local bank accounts for foreign workers, excluding domestic helpers.


78.    The 2050 National Transformation (TN50) was announced in the 2017 Budget. TN50 will chart a proud nation state, to be in the top 20 countries in the world.

79.    Using the bottom-up approach, I have held series of TN50 engagements and dialogues with various segments of society such as youth, graduates, civil servants, artists, educators and private sector to obtain aspirations, views and ideas.

To date, more than 80,000 aspirations have been received, involving 1.8 million rakyat representing various segments of society nationwide.

Childcare and People with Disabilities Welfare Centres

80.    Moving towards TN50, in achieving work and life balance, the local authorities are required to ensure that childcare facilities are provided in all new office buildings, starting with Kuala Lumpur.

81.    In addition, the TN50 vision emphasises the aspects of safeguarding all groups, including the welfare of People with Disabilities (PWDs).

Hence, additional tax deductions are extended to cover employers hiring workers affected by accidents or critical illnesses and certified by Social Security Organisation’s (SOCSO) Medical Board that they are still fit to work.

Inculcating the Culture of Savings in TN50 Generation

82.    In order to ensure the bright future of the TN50 generation, the Government together with Permodalan Nasional Berhad (PNB) has agreed that every Malaysian baby born from 1 January 2018 to 2022, be provided with an Initial Savings Fund of RM200 through PNB’s Unit Trust Scheme.

83.    This new scheme will be named as Amanah Dana Anak Malaysia or ADAM50.

Education for TN50 Generation

84.    With regard to education for TN50 generation, a total of

RM250 million is allocated for the following:

First: Set up a Science, Technology, Engineering and Mathematics (STEM) centre to develop the latest learning methods to train STEM specialist teachers utilising existing facilities at teachers training institute in collaboration with Academy of Science Malaysia;

Second: Enhance Computer Science module including Coding programme in primary and secondary school curriculums, which exist in Form One and Form Three;

Third:    Allocate a sum of RM190 million to upgrade 2,000    classes into a 21st Century Smart Classrooms in order to enhance creative-based learning and innovative thinking;

Fourth: Towards TN50, the Government acknowledges the role of artists to increase the quality of culture to a higher level. For this, a sum of RM20 million is

allocated    to    Cultural    Economy    Development Agency.

85.    I    am    proud    with    our    recent    achievements    in    higher education, which include:

First:    According to 2017/2018 QS University Ranking Report, five local Research Universities improved their ranking and are among the top 300 best universities in the world, which is top 1% in the world;

Second: In fact, University of Malaya’s ranking has improved by 19 places to 114, nearing 100 best universities in the world;

Third:    In terms of world’s higher education system, Universitas 21 ranked Malaysia as 25th best in the world, improving by 11 positions over the past six years; and

Fourth: With 134,000 foreign students in local higher learning institutions, we are nearing the target of achieving as the Regional Higher Education Hub.

86.    Since 2009, the cumulative scholarship provided by the Government amounts to RM44 billion. For 2018:

First:    A sum of RM2.2 billion is allocated for scholarships provided by Public Service Department, Ministry of Higher Education and Ministry of Health;

Second: A sum of RM400 million for research and development grants is provided to Public Higher Learning Institutions (IPTA), compared with RM235 million allocated in the previous Budgets, including a special allocation for University of Malaya to achieve the status of Top
100  Universities  in  the  World  in  the  near

future; and

Third:    A sum of RM90 million is allocated for MyBrain Programme for 10,600 individuals to further their studies in Masters and PhD; and

Fourth: Students in Higher  Learning  Institutions  (HLI) and Form Six will be provided with Book Voucher Assistance of RM250 each, benefitting 1.2 million students.

I would like to take this opportunity to congratulate the new line of leadership of the Student  Representative  Council  at  all  Public

Universities.    With    a    majority    of    them undergraduates from the Pro-Aspirasi group.

Talent and Careers of TN50

87.    Malaysians need to be ready, alert and swift through training and retraining in meeting the job market requirements. To address this issue, the Government will continue…

88.    For example, SL1M Apprenticeship Programme which have trained 138,000 graduates will be continued with an additional 5,000 graduates to total 25, 000 graduates next year. Meanwhile, open interview programme by the SL1M Unit in EPU will be continued with an allocation of RM40 million.

89.    To expand SL1M, private companies awarded with Government contracts are mandated to allocate 1% of their total project value to SL1M.

90.    In addition, the Government will create a one-stop centre incorporating agencies such as JobsMalaysia, SL1M, SOCSO, Human Resources Development Fund (HRDF) and    Unit Peneraju Agenda Bumiputera (TERAJU) in Urban Transformation Centre (UTC) to provide professional advisory services in seeking employment and training.

91.    To identify best talents, the Government will create a ‘talent file’    programme National Leaders Circle under the TalentCorp. This programme will identify and shortlist suitable and credible candidates to fill critical and senior posts.

92.    The Government is very concerned on the social ills in the society. To address this, a matching grant of RM50 million will be provided to social enterprises and NGOs to resolve daily social issues and challenges in innovative ways.

Sports Development

93.    Last August and September, Malaysia was declared as the Overall Champion at the 29th SEA Games and ranked second in the 9th ASEAN Para Games.

94.    Hence, on behalf of the Government, let’s give the most roaring applause to all our heroes and heroines.

95.    To continue the momentum towards becoming sports powerhouse, the Government allocates RM1 billion to implement various initiatives including FitMalaysia, National Sports Day, training for athletes, grassroots programme and national football development programme.

96.    The Government also announces to build 14 new sports complexes nationwide with a cost of RM112 million.

97.    In addition, the Government allocates RM20 million to Bukit Jalil Sports School to upgrade its facilities as the premier sports school.


98.    On average, the Malaysian education expenditure is doubled from the amount of other ASEAN countries. For 2018, a sum of RM61.6 billion is provided for this sector.

Of which, RM654 million is allocated for construction of four pre-schools, nine PERMATA centres, including two new centres for autistic children; 48 primary, secondary schools and vocational colleges as well as one matriculation centre.

Upgrading and Maintaining Schools

99.    Every year, priority is given to the Special Fund for School Upgrading and Maintenance. A total of RM550 million is allocated for this purpose, including:

•    National Schools - RM250 million;

•    National-type Chinese Schools - RM50 million;

•    National-type Tamil Schools - RM50 million;

•    Missionary Schools - RM50 million;

•    Boarding Schools - RM50 million;

•    MARA Junior Science Colleges - RM50 million; and

•    Government-aided Religious Schools - RM50 million.

100.    The Government realises there are 2,000 dilapidated schools nationwide that needs upgrading and refurbishing.

101.    For these repair works through Industrial Building System, the Government provides the largest allocation of RM2.5 billion for a period of two years, of which RM500 million to schools in Peninsular Malaysia, RM1 billion in Sabah and RM1 billion in Sarawak.

Schooling Assistance

102.    A total of RM2.9 billion is also allocated for food assistance, textbooks, per capita grants and Federal Scholarships for schools.

103.    Meanwhile, Schooling Assistance worth RM100 per student from the low-income household will be continued with an allocation of RM328 million, benefitting 3.2 million students.

104.    The Government recognises the role of teachers in strengthening the education and moulding the future generation.

105.    I would like to take this opportunity to thank all teachers nationwide who have strived in building our future generation.

Higher Education Funding

106.    As we are aware, the National Higher Education Fund Corporation (PTPTN) was established to manage funding for Malaysian students pursuing tertiary education.

107.    Concerning PTPTN, we need to understand as stated in hadith, debt remains as debt and must be paid.

108.    The borrowers of PTPTN loans must be responsible to pay back in order for future generation to continue to borrow.

109.    To all PTPTN borrowers, the Government agrees to extend the    discount for repayment of PTPTN loans until 31 December 2018 as follows:

20% on the outstanding debt for full settlement;

10% for repayment of at least 50% on the outstanding debt made in a single payment; and

10% for repayment through salary deductions or scheduled direct debit.

110.    In addition, I would like to announce additional flexibility for PTPTN loans as follows:

First: For students from B40 households undergoing highly marketable courses, an additional RM200 million is provided to increase the maximum loan amount; and

Second: The grace period for loan repayment is extended to    12 months upon completion of study compared with six months currently.

111.    In addition, for borrowers intending to pursue their studies to    a higher level, for example from diploma to undergraduate, they may combine both loans into a single loan and to repay upon completion of their studies.

112.    Clearly, the Government has provided various means to assist students in repaying their loans.

Skim Simpanan Pendidikan 1Malaysia

113.    Furthermore, to inculcate the culture of savings for education, a sum of RM250 million is provided to 500,000 contributors aged 7 to 12 years under National Education Savings    Scheme  (SSPN-i  Plus)  which  was  rebranded  as

Skim Simpanan Pendidikan 1Malaysia (SSP1M) managed by PTPTN.

A matching grant of RM500 will be provided to contributors with a total contribution of at least RM500 and only can be withdrawn upon attaining the age of 18 years.

114.    In addition, individual income tax relief for net savings in the SSP1M up to RM6,000 be extended for another 3 years, effective from year of assessment 2018.

Enhancing Technical and Vocational Education Training

115.    The Government is aware about the importance of transformation in the Technical and Vocational Education Training (TVET) in producing highly skilled and competitive workforce. In this regard, all TVET institutions under seven ministries have been merged and known as “TVET Malaysia” under the purview of the Ministry of Human Resources.

116.    In addition, a sum of RM4.9 billion is allocated to implement TVET Malaysia Masterplan.

117.    To encourage TVET graduates to pursue their studies, the Government will also provide 100 TVET Outstanding Student Scholarships with an allocation of RM4.5 million.

118.    To support the development of skilled workers in the rail sector, the Government will establish the National Rail Centre of Excellence (NRCOE) to oversee and coordinate quality assurance as well as accreditation of national rail education and training. In addition, Malaysia Rail Link Sdn. Bhd.    in collaboration with IPTAs will train 3,000 professionals in this industry.


Providing Quality Infra-Rakyat

119.    In progressing towards a developed nation, quality infrastructure and interconnectivity will be modernised.

120.    Hence, the Government will continue to focus on world class infra-rakyat projects. For example, The MRT Line Sungai Buloh – Kajang Line was successfully completed with a daily capacity of 400,000 commuters.

121.    MRT is a success story where not only completed the project ahead of schedule but also managed to save RM2 billion from the initial construction costs.

122.    As for the infrastructure facilities in Sabah and Sarawak, the    Government has fulfilled its promise through the construction of Pan-Borneo Highway.

123.    The Pan-Borneo is expected to enhance connectivity and invigorate economic activities in Sabah and Sarawak, including rural and remote areas such as Kapit-Ulu Song.

124.    To provide basic infrastructure in the rural areas, a sum of

RM6.5 billion is allocated, among others:

First:    A sum of RM2 billion is allocated for Pan Borneo Highway. For Sarawak, all the 11 construction packages have been tendered, while five out of 35 packages in the First Phase in Sabah have been awarded and the remaining 12 is under tender process;

Second: A sum of RM1.1 billion is allocated for Rakyat- centric projects including building and upgrading of bridges, village street lights, musolla, small bridges and markets;

Third:    A sum of RM1 billion is allocated through Malaysia    Communications and Multimedia Commission (MCMC) to develop communication infrastructures and broadband facilities in Sabah and Sarawak;

Fourth: A sum of RM934 million is allocated for the construction of rural roads, including almost RM500 million for Sabah and Sarawak;

Fifth:    An allocation of RM672 million for electricity supply in rural areas, including RM620 million for Sabah and Sarawak, benefitting 10,000 rural homes.

As a whole, since 2009, subsidy worth more than RM100 billion has been spent, including gas to generate cheap, quality and reliable electricity supply for the rakyat.

Sixth: A sum of RM420 million, including almost RM300    million for Sabah and Sarawak is allocated to provide clean water supply, benefiting 3,000 homes;

Seventh: A sum of RM500 million for the Public Infrastructure Maintenance Programme and Basic Infrastructure Project to meet the needs and wish list of the rakyat at the grassroots level; and

Eighth: A sum of RM50 million is allocated for surveying and mapping of customary lands, of which RM30 million for Sarawak and RM20 million for Sabah.

A part of the rakyat-centric projects will be implemented through private financing initiatives.

National Blue Ocean Shift

125.    National Blue Ocean Shift  (NBOS) will continue to be implemented at a faster pace and in an integrated manner at a low cost with high impact.

126.    For 2018, a sum RM300 million is allocated to implement NBOS programmes, including construction of new UTCs, Blue    Ocean Entrepreneur Township, Mobile CTC, entrepreneurship programmes, Global Entrepreneurship Community as well as inclusive and vibrant Social Entrepreneurs.

The Welfare of FELDA Settlers

127.    The Government continues to safeguard the welfare of FELDA settlers. More than 112,000 settlers received six main incentives, including Settlers Special Incentive of RM5,000.

128.    The Government will reimburse the cess money that had been paid by settlers for replanting scheme from rubber to oil palm from 2010 to 2016. This will benefit 8,925 FELDA settlers with an allocation of RM43 million. In addition, a sum    of RM60 million will be provided for oil palm replanting programme.

129.    Furthermore, a sum of RM164 million is allocated to build 5,000 Second Generation FELDA Homes in collaboration with SPNB.

130.    In addition, nearly RM200 million is provided for FELDA to supply water and upgrade road as well as street lights.

More importantly, the Government will always safeguard the welfare of FELDA settlers.

Security and Public Order

131.    To counter terrorism and extremism such as IS and DAESH, the Government has established a Regional Digital Counter-Messaging Communications Centre.

132.    In addition, the Government will increase safety at the borders and enhance public order with an allocation of RM14 billion for Malaysian Armed Forces (ATM), almost RM9 billion for Royal Malaysia Police (PDRM) and more than RM900 million to Malaysian Maritime Enforcement Agency (APMM).

133.    Among the main programmes are:

First:    A sum of RM3 billion is allocated for procuring and maintaining defence assets;

Second: A sum of RM720 million to build 11 headquarters and six police stations as well as purchase of firearm fittings and operations vehicle. Meanwhile, an allocation of RM170 million is provided to upgrade ICT equipment, including 1PDRMnet system as well as RM100 million to upgrade communication systems;

In addition, to safeguard the welfare of police personnel, I would like to announce the construction of 10,000 units of houses under 1Malaysia Civil Servants Housing-PDRM (PPA1M-PDRM) at affordable price according to police salary scheme.

Third:  A sum of RM490 million is allocated to APMM for repairing and maintaining ships and boats, upgrading jetties as well as procuring three patrol boats;

Fourth: A sum of RM250 million is allocated to Eastern Sabah Security Command (ESSCOM) to enhance security controls at Sabah and Sarawak borders, including RM50 million for coastal surveillance radar;

Fifth:    A sum of RM50 million is allocated to upgrade the    capability of firearm assets of special taskforces to combat anti-terrorism activities; and

Sixth: In addition, in appreciation the role of People’s Volunteer Corps (RELA) in assisting rakyat, the Government will provide the highest allocation of almost RM250 million for necessary equipment, including uniforms.

134.    In safeguarding the welfare of armed forces, the Government will:

First:    Prepare the Armed Forces Family Housing (RKAT) blueprint to construct more than 40,000 units in phases by 2030. In 2018, almost 6,000 units will be built; and

Second: A sum of RM40 million is allocated to upgrade five hospitals, build four polyclinics and hospital for ATM veterans.

135.    Let us extend our heartiest appreciation to our security forces including police, armed forces and APMM who have sacrificed for the country’s peace and sovereignty.

Bumiputera Wellbeing Transformation Policy

136.    As we are aware, the Bumiputera community accounts for almost 70% of the total 32 million population.

137.    Therefore, the Government, through the Bumiputera Wellbeing Transformation (TKB) policy will continue to uphold Bumiputera empowerment as a national agenda.

138.    Since 2009, various major initiatives to empower Bumiputera economy has and currently being implemented.

139.    In this regard, the Carve Out and Compete initiative for Bumiputera has reached a total contract value of more than RM61    billion. In addition, a sum of RM1.7 billion is approved for 515 projects under the Facilitation Fund which        provides more than 44,000 employment opportunities.

140.    The programme has proven that the Bumiputera contractors are more resilient and capable to complete projects earlier than schedule without affecting quality.

141.    On the other hand, the Yayasan Peneraju Pendidikan Bumiputera has successfully trained nearly 17,000 Bumiputera professionals nationwide, in the accounting and engineering fields.

142.    In addition, a sum of RM2.4 billion is allocated to UiTM. At the same time, the Government has increased the number of student intakes to UiTM to more than 165,000 with a target to attain 250,000 students by 2020.

143.    Notably, UiTM has succeeded in producing over 700,000

Malay and Bumiputera graduates.

144.    Furthermore, in 2018, the Government will allocate more than RM3.5 billion for the following initiatives:

First:    A sum of RM2.5 billion, the highest allocation ever,    is provided for higher education scholarship and training programmes under the Council of Trust for the People (MARA). This    will benefit nearly 90,000 students including 1,500 in the critical fields such as AI, signalling and rail;

Second: A total of RM90 million is allocated for programmes namely Peneraju Profesional, Skil and Tunas, benefitting almost 8,000 individuals;

Third: A  sum of RM200 million is allocated for  the MARA Graduate Employability Training Scheme (GETS);

Fourth: A  sum of RM555 million is allocated for Bumiputera entrepreneurship enhancement programme, comprising:

•    A sum of RM200 million for Program Keusahawanan dan Premis Perniagaan PUNB;

•    A sum of RM200 million is allocated for Program Keusahawanan MARA;

•    A sum of RM155 million for programmes such as vendor capacity development, Tunas Usahawan Belia Bumiputera (TUBE), Skim Usahawan Permulaan Bumiputera (SUPERB), and Skim Anjakan Usahawan; and

Fifth:    To increase equity and investment in strategic sectors, a sum of RM150 million is provided to    Pelaburan Hartanah Berhad (PHB) and RM150 million to Ekuiti Nasional Berhad (EKUINAS).

Wellbeing of Chinese and Indian Communities

145.    As an inclusive Budget, for the Chinese community, the Government will provide a sum of RM50 million as loans

for    SMEs    through    Koperasi    Jayadiri    Malaysia    Berhad (KOJADI).

146.    In addition, a sum of RM30 million will be channelled to the 1Malaysia Hawkers and Petty Traders Foundation to provide loans to Chinese hawkers.

147.    Furthermore, to develop Chinese New Villages, a total of RM65 million is provided, while another RM10 million for housing refurbishment programme.

148.    With regard to the Indian community, the average monthly household income of the Indian community increased significantly to 6.8% per annum. Recently, I have launched the Malaysian Indian Blueprint (MIB).

149.    For this, through Tabung Ekonomi Kumpulan Usaha Niaga (TEKUN), the Government allocates RM50 million for Indian    Community Entrepreneur Development Scheme (SPUMI), benefitting more than 35,000 entrepreneurs. In addition, a sum of RM50 million is allocated for Indian community socioeconomic development programme.

150.    At the same time, through MIB, new intake of Indians to public higher learning institutions and public service will be increased to a targeted 7%.

151.    Under the Socioeconomic Development of Indian Community (SEDIC), more than RM230 million has been distributed since 2014, benefitting more than 500,000 Indian participants.

152.    The 2018 budget also introduces a new initiative for the Indian community. I am pleased to announce that PNB will make a special distribution amounting to 1.5 billion additional units of Amanah Saham 1Malaysia for the Indian community, up to 30,000 units for each investor.

153.    To support this initiative, a fund amounting to RM500 million is allocated for a period of five years. This special investment loan scheme will be offered to 100,000 households from the B40 Indian community, limited to 5,000 units per participant.

154.    MIB has proven to the Indian community that in the national development no one is left behind… ‘indeed, the future belongs to us.’

Orang Asli

155.    To raise the standard of living and economic development of Orang Asli community, a total of RM50 million is provided, comprising community food assistance programmes, benefitting almost 5,000 Orang Asli students.

156.    In addition, as an incentive to successful Orang  Asli students, the Government will provide an assistance of RM3,000 for parents to prepare their children’s enrolment in IHLs.

157.    Furthermore, Orang Asli Settlement Integrated Development Programme will be continued with an allocation of RM60 million.

Women and Family Wellbeing

158.    Women play a very important role in the wellbeing of family and    national development. Therefore, in recognising women’s contribution, the Government is pleased to announce 2018 as the Women Empowerment Year.

159.    In this respect, several initiatives will be implemented as follows:

First:    Require at least 30% participation of women as board of directors in GLCs and GLICs as well as statutory bodies by end-2018;

Second: Propose maternity leave for the private sector to be    increased from 60 days to 90 days as implemented by the public sector;

Third:    A sum RM20 million is allocated to conduct training and entrepreneurship programmes, which including PEAK Entrepreneur Programme under MyWin Academy; and

Fourth: In order to encourage women to return to the workforce who have been on a career break for at least two years, the Government proposes that their earnings on maximum of 12 months consecutive salary received be given personal income    tax exemption. The incentive is available for women who return to the workforce between the year of assessment 2018 to 2020.


160.    Prioritising the wellbeing of rakyat and provide opportunities to generate income.

Generating Rakyat’s Income

161.    The Government is committed and continues to thrive to provide job opportunities and generate income, through the following measures:

First: A sum of RM100 million to expand eRezeki, eUsahawan and eLadang Programmes under MDEC;

Second: A sum of RM120 million is allocated to provide easy    loans to 1,000 1Malaysia Food Truck (FT1M) and 1Malaysia Mobile Food Kiosk entrepreneurs through Bank Rakyat and Bank Simpanan Nasional. The Government will provide a subsidy of 4% on the interest rates;

Third:    Providing a total of RM60 million to implement 1AZAM Programme, including RM10 million for Sabah and RM10 million for Sarawak; and

Fourth: Providing a sum of RM25 million for Three- Wheel    Motorcycle Programme under FAMA, GiatMara mobilepreneur and MyAGROSIS programmes.

162.    In line with IR 4.0, all registered taxi drivers who wish to shift    to ehailing application, a grant amounting to RM5,000 will be provided for the purchase of a new car.

Increasing Disposable Income

163.    BR1M is a form of targeted subsidy for those in need and has proven to be effective.

164.    BR1M is an efficient form of cash transfer to assist the B40 households.

165.    In 2017, BR1M has benefitted 7 million recipients with an allocation of RM6.8 billion. Likewise, in 2018, those recipients to continue to benefit from the BR1M cash transfer of up to RM1,200.

166.    The Government will continue to increase household disposable income as well as narrow the income gap in the country.

167.    I would like to bring another good news to the 2.3 million tax payers, especially those in the M40 group or specifically mid-income range households with income of less than RM9,000.

168.    I would like to announce an individual income tax rates reduction of two percentage points for income tax band between RM20,000 to RM70,000, as follows:

First:      Income tax band from RM20,001 to RM35,000,

the rate is reduced from 5% to 3%;

Second:  Income tax band from RM35,001 to RM50,000,

the rate is reduced from 10% to 8%; and

Third:     Income tax band from RM50,001 to RM70,000,

the rate is reduced from 16% to 14%;

This measure will increase the disposable income of the rakyat between RM300 to RM1,000. It is estimated that additional disposable income of RM1.5 billion can be spent by the rakyat. With this measure more that 261,000 individuals are no longer subjected to income tax.

169.    The Government allocates a sum of RM3.9 billion for goods and    transport subsidies including cooking gas, flour, cooking oil, electricity and toll.

170.    As announced earlier, Kedai Rakyat 1Malaysia will be restructured as KR1M 2.0. As a start, in 2018 50 outlets will    transformed to KR1M 2.0 and will be expanded further to 3,000 outlets within three years.

171.    KR1M 2.0 will provide five basic necessities at low prices such as rice, sugar, cooking oil, flour and cooking gas. In addition, 50 branded consumer goods will be sold at a lower than the market price.

172.    The Government will continue the Standardisation of Prices for Basic Necessities Programme in Sabah and Sarawak with a total allocation of RM80 million.

173.    In addition, the Government will develop the Agrobazaar Malaysia with a total allocation of RM20 million to provide market space and agrofood sales centre at a lower price, beginning in Putrajaya.

174.    Ministry of Agriculture and Agro-Based Industry will implement programmes through FAMA and LKIM with an allocation of RM50 million. These programmes enable consumers to purchase food products such as fish, vegetables, chickens and eggs at affordable prices.

175.    Effective 1 January 2018, following measures will be implemented:

First:    Abolish toll collections at Batu Tiga and Sungai Rasau, Selangor;

Second:    Abolish  toll  collections  at  Bukit Kayu Hitam, Kedah; and

Third:    Abolish    toll    collections    at    Eastern    Dispersal Link, Johor.

1Malaysia Retirement Scheme

176.    For those who are self-employed and without fixed income, the Government will increase its contribution to 15% subject    to a maximum of RM250 annually under the 1Malaysia Retirement Scheme (SP1M) managed by Employees Provident Fund (EPF). The contribution begins from 2018 to 2022.

Foreign Domestic Helper

177.    The Government is aware of the high cost incurred in hiring foreign domestic helpers. Currently, the hiring cost of a

foreign domestic helper could reach as high as RM12,000 to RM18,000.

178.    To address this issue, the Government will review the cost of hiring foreign domestic helpers, with a view of reducing it in the future.

179.    For a start, the Government will allow employers to hire foreign    domestic helpers from nine selected countries directly without any agents.

180.    Subsequently, employers may apply for foreign domestic helpers’ visa via online from the Immigration Department of Malaysia with the current levy and processing fees.


181.    The Government will continue to intensify efforts to increase home-ownership for the rakyat with an allocation of RM2.2 billion as follows:

First:    17,300 units of People’s Housing Programme; Second:    3,000 units of People’s Friendly Home under


Third:    210,000 units of houses under PR1MA with prices RM250,000 and below. For this, RM1.5 billion is allocation for the period of two years;
Fourth: 25,000 units of 1Malaysia Civil Servants Housing Programme (PPA1M) will be completed in    2018 while another 128,000 units are at various stages of construction;

Fifth:    600 units of MyBeautiful New Homes (MyBNHomes) scheme for B40 households in Terengganu, Pahang, Melaka, Johor, Sabah and Sarawak as well as Orang Asli settlements;

Sixth: 2,000 units under MyDeposit  programme  to assist    down payments as well as MyHomes programme to enable developers to provide more affordable homes; and

Seventh: A sum of RM200 million is allocated for maintenance and refurbishment of houses, including the 1Malaysia Maintenance Fund.

182.    To encourage the construction of more affordable homes, the step-up financing scheme introduced by PR1MA will be extended to private housing developers subject to certain criteria.

183.    With regard to abandoned housing projects, stamp duty exemption for loan agreements and letter of consent to transfer,  are  given  to  rescuing  contractors  and  original

owners of abandoned projects, effective 1 January 2018 to 31 December 2020.

184.    To promote rental of residential homes, for the first time in 60 years, the Government proposes a 50% tax exemption on rental  income received by resident individuals not exceeding RM2,000 per month for resident individuals.

185.    This exemption is effective from the year of assessment of 2018 to 2020. The Government will also formulate the Residential Rental Act to protect the landlord and tenant.


186.    To provide quality healthcare services, the Government allocates about RM27 billion, encompassing:

First:    A sum of RM2.5 billion is allocated for medical supplies, while RM1.6 billion for consumable and medical support items;

Second: A sum of RM1.4 billion is allocated for upgrading and    maintaining healthcare facilities, medical equipment and ambulances. This includes, the construction of operation hall using a modular

approach in three hospitals in Muar, Banting and Balik Pulau;

Third:    Upgrade cardiology and cardiothoracic services at Sultanah Nur Zahirah Hospital in Kuala Terengganu and Sultanah Bahiyah Hospital in Alor Setar;

Fourth: A sum of RM100 million is allocated to upgrade hospitals and clinics, including wiring systems;

Fifth:    A total of RM50 million is allocated for haemodialysis assistance with a subsidy of RM100 from the overall treatment cost of RM110 per session.

An additional of RM40 million is allocated for the Medical Aid Fund. Both incentives are for the underprivileged;

Sixth: A sum of RM10 million is allocated for the treatment of increasing cases of rare diseases and RM30        million is provided for Healthy Community Empowers the Nation programme to create    awareness about non-communicable diseases in 10,000 locations nationwide; and

Seventh: A sum of RM50 million is allocated for Voluntary Health Insurance Scheme to enhance the health sector.

187.    Furthermore, the Government will build new hospitals and wards, including:

First:    Two blocks of women and children wards at Tengku Ampuan Afzan Hospital and Putrajaya Hospital with a capacity of 300 beds each, with a cost of RM1 billion;

Second:    Cancer    centre    at    Sungai    Petani    at    a    cost    of

RM500 million with a capacity of 200 beds;

Third:    A block dedicated for a specialist clinic as well as a new ward at Pulau Pinang Hospital with a capacity    of 300 beds with a cost of RM500 million; and

Fourth: Construction of international forensic medical service centre at Kuala Lumpur Hospital with a cost of RM380 million.

Goods and Services Tax

188.    The Government will further improve the implementation of Goods    and Services Tax (GST), through the following measures:

First:    Services provided by local authorities will not be subjected  to  GST,  effective  1  April  2018  or  1

October 2018, according to the choice of local authorities;

Second: Reading materials comprising all types of magazines and comics will be zero-rated, effective
1    January    2018,    to    streamline    the    GST treatment;

Third:    Cruise operators are given relief from paying GST on handling services provided by port operators in Malaysia. This relief will be effective from 1 January 2018 to 31 December 2020; and

Fourth: Construction of school buildings and houses of worship, funded through donations are given GST relief. It applies for construction contracts signed on or after 1 April 2017.

189.    The GST should not be politicised. In fact, the GST saved the economy this year, where without the RM41 billion collected we cannot imagine how the nation can cater for the needs of rakyat.

190.    Until today, the opposition seem to be divided with regard to their views on GST system with some accepting GST based on zero-rate and the latest there are some who want to return back to the sales and services tax (SST).

191.    Futhermore,…

Fifth:    Imports of oil and gas-related equipment under a lease    agreement, supplied to customers in Malaysia    by companies in Designated Areas, namely, Labuan, Langkawi and Tioman are given GST relief effective from 1 January 2018;

Sixth: Imports of big ticket items such as aircraft and ships    by airline and shipping companies registered in Malaysia are given GST relief.

GST relief are also given to companies in the oil and gas industry, importing oil rigs or floating structures, effective from 1 January 2018; and

Seventh: The management and maintenance services of stratified residential buildings supplied by the Joint Management Body (JMB) and management corporations are not subjected to GST. This treatment is expanded to cover the management and maintenance services provided by housing developers, effective from 1 January 2018.


Industrial Revolution 4.0

192.    In line with the emerging IR  4.0 and the  era of digital economy, the Government will implement the Malaysia Digital Policy.

193.    As such, in order to support the IR 4.0 business and investment activities, the Government will provide a matching grant worth RM245 million under the Domestic Investment Strategic Fund to upgrade the Smart Manufacturing facilities.

194.    Furthermore, futurise centre in Cyberjaya will be strengthened as a one-stop centre for corporate companies and universities to develop prototype products and elevate innovation.

195.    The Government will provide tax incentives as follows:

First:    Extend the incentive period for Accelerated Capital    Allowance of 200% on automation equipment from year of assessment 2018 to year of assessment 2020;

Second: Extend the incentive period for Accelerated Capital Allowance of 200% for manufacturing and manufacturing-related services sectors; and

Third:    Capital Allowance for ICT equipment, which includes spending on computer software development, is claimable for the period of four years beginning year of assessment 2018 to 2020, including for SMEs.

Sustainable Development

196.    While we are progressing towards modernisation, we must preserve the sustainability of our environment for future generation.

197.    My deepest condolences for the loss of lives in the Tanjung Bungah Pulau Pinang landslide tragedy, which has claimed 11 lives.

198.    Our friend, the Honourable DAP Member of Parliament, wrote a poignant piece on his Twitter account.

199.    What a touching piece by our Honourable Kepong Member of Parliament himself.

200.    To ensure a sustainable development, the following measures will be implemented:

First: Provide a sum of RM5 billion under the Green Technology Financing Scheme to promote investment in green technology industry;

Second: Implement the Non-Revenue Water Programme with a cost of RM1.4 billion to reduce the average loss of water;

Third:    Construct the Off-River Storage with a cost of RM1.3 billion as an alternative water resources; and

Fourth: Provide a total of RM517 million for flood mitigation programmes.

Digital Free Trade Zone

201.    Malaysia will be the first in the world outside China to establish a Digital Free Trade Zone (DFTZ) which comprises e-Fulfilment Hub, Satellite Services Hub and e- Service Platform to stimulate growth in electronic trade. DFTZ will transform KLIA as the regional gateway.

202.    The first phase of DFTZ aims for 1,500 SMEs to participate in    digital economy and is expected to attract RM700 million worth of investment and create 2,500 job opportunities. For this, the Government:

First:    Provides a sum of RM83.5 million to construct infrastructure for the first phase of DFTZ in Aeropolis, KLIA; and

Second: Increases the de minimis or minimum value for imports from RM500 to RM800 to establish Malaysia as the regional e-commerce hub.

Regulatory Sandbox

203.    The Government will create a conducive ecosystem to gain benefits from innovation, particularly ideas from local start- ups.

204.    The Government will expand regulatory sandbox approach to facilitate companies to test their new innovative ideas and business model which will be implemented by all related regulators.


205.    Enhance efficiency and delivery of Government-linked Companies (GLCs) and public service.

Employees in Government-Linked Companies

206.    In line  with the  development philosophy of growth with equity, it is Malaysia’s desire to achieve strong economic growth and wealth be equally distributed among the rakyat.

207.    In this regard, the GLCs will lead and be an example to the corporate sector. As such, every GLCs will be given Key Performance Indicator (KPI) to increase employees compensation in line with productivity growth. This includes:

First: GLCs will increase their profit sharing with their employees through gradual payment of salaries and allowances;

Second: Introducing flexible benefits to increase disposable income by substituting annual  and medical leaves for cash;

Third:    Improving further flexible working arrangements to promote work-life balance through compressed work week, flexible and part-time working hours;

Fourth:    Introduce leaves for umrah;

Fifth:    Provide childcare centre in GLC’s main offices as well    as introduce shorter working hours for pregnant working women; and

Sixth: Increase investment in training,  particularly conduct courses on digital skills to workers as well as provide children’s education assistance.

Prioritise    the    Welfare    of    Senior    Citizens,    People    with Disabilities and Children

208.    The Government will provide an allocation of RM1.7 billion for the welfare of senior citizens, PWDs and children. This includes:

First:    Increasing allowance for senior citizens by RM50 to    RM350 per month with an allocation of RM603 million. This will benefit almost 144,000 senior citizens; and

Second: Increasing allowance for working and unemployed PWDs as well as care takers of PWDs by    RM50  per  month  with  an  allocation  of

RM100    million.    This    will    benefit    more    than 163,000 individuals.

209.    Furthermore, to protect children, particularly from sexual crimes, the Government has successfully set up the Special Criminal Court on Sexual Crimes against Children, the first in Southeast Asia. An additional three courts will be established in 2018.

Public Sector Home Financing Board (LPPSA)

210.    From 1 January 2018, the Public Sector Home Financing Board (LPPSA) will implement measures to enable public servants to own their dream homes. Among the measures include:

First: Allow financing by  LPPSA  to  construct property on waqf land;

Second: Include legal fee-related to sales and purchase agreement as part of financing by LPPSA;

Third: Allow LPPSA joint-loan for husband and wife or children with a condition that all applicants must be public servants; and

Fourth: Allow joint-home financing between husband and wife or children, with a condition at least one of the applicants is a public servant.

The non-public servant needs to secure loans from financial institutions or agencies that provide financing facilities which agrees to be the second mortgage holder.


211.    The future is uncertain.

212.    Nevertheless, Allah SWT favours those who continuously work hard, plan their future for the benefit of country and society as a whole.

213.    Based on Surah Al-A’raf verse 96, Allah SWT bestows His blessings and grace upon those who believe and fear Allah.

214.    Therefore, the Government is targeting Malaysia:

First:    To become a High-Income Advanced Economy in 2020;

Second:    To    record    RM2    trillion    of    economy    and    trade value by 2025;

Third:    To gain and benefit from IR 4.0 by 2030;

Fourth:    To have a more competitive workforce with nearly zero defects by 2040; and

Fifth:    To    be    ranked    among    the    top    20    advanced countries in the world.

Socio-economic Research Unit

215.    The fact remains families are the most important institution in developing values and humanity as social unity starts with harmonious and happy family.

216.    For this, the Government will establish Socio-economic Research Institute (SERI) under Prime Minister’s Department and enhance the UKM Institute of Ethnic Studies (KITA-UKM) as a national institution. An appropriate allocation will be provided by the Government.

217.    SERI will review and evaluate the effectiveness of policies, and implementation of programmes and development projects. Meanwhile,  KITA will coordinate studies on national    socioeconomics education and establish the national social development index.

218.    As an analogy, while the Economic Planning Unit (EPU) plays an important role in formulating economic policies and the Implementation and Coordination Unit (ICU) as the

implementation arm of programmes and projects, the SERI and KITA will be the main agency which covers the aspects of spiritual, ethical and universal pure values.

219.    The Government always appreciate the role of NGOs and will continue to cooperate with them in addressing social challenges. Emphasis will be given to family institutions, which is the smallest yet most important nucleus in the development and wellbeing of our society.

Public Servants

220.    As I mentioned in the 15th Majlis Amanat Perdana Perkhidmatan Awam (MAPPA) early this month, I have a few announcements for the 1.6 million public servants.

221.    As a token of appreciation for the commendable services by the public servants, I am pleased to announce:

First:    Introduce second time-based promotion to supporting staff after 13 years from the first promotion;

Second: Provide benefit to public servants who retire on medical reasons similar to those who retires at compulsory age;

Third: Allow Cash Award in lieu of Accumulated Leave (GCR) of more than 150 days to be taken during the retirement year;

Fourth:    Increase special leaves for education officers

from 7 to 10 days a year;

Fifth:   Provide unrecorded leaves to public servants up to 7 days throughout their service for the purpose of umrah;

Sixth: Introduce new working hour from 9.00am to 6.00pm    to provide further flexibility to public servants;

Seventh: Provide Flexible Working Hour one day a week for Grade UD54 and above Medical Specialists who have served a minimum of four years and meet certain requirements;

Eighth: Allow working women in their five month onwards of pregnancy to leave work an hour earlier.
To accompany them, husbands are also allowed to go home an hour earlier with a allowed to leave work an hour earlier with a condition

that the couple are working within the same location;

Ninth:    Increase total maternity leave from 300  to

360    days    throughout    service    subject    to    a maximum of 90 days a year;

Tenth: Encourage life-long learning among public servants    through in-house Masters and PhD programmes;

Eleventh: Set minimum pension of RM1,000 per month, benefitting more than 50,000 retirees with at least 25 years of service; and

Twelfth: Extend the medical facilities to parents of retirees.

All the above measures will take effect from 1 January 2018.

Neighbourhood and Community

222.    To appreciate the contribution of village heads and tok batins,    the Government will provide a one-off special payment of RM1,500, benefitting 9,800 people. Of which, RM1,000 will be paid in January 2018, while the balance during Hari Raya Aidilfitri.

223.    To create safe and peaceful environment in the neighbourhood areas, the Government will continue to provide    1Malaysia People Community Grant up to RM10,000 to registered resident associations to purchase security equipment, clean and maintain neighbourhood areas with a total allocation of RM40 million.

224.    In addition, RM40 million is allocated to GiatMara to implement the first phase of community training programmes, involving 50 PPR.

Uphold the Greatness and Integrity of Islam

225.    My deepest condolences for the loss of 23 lives in the Darul Quran Ittifaqiyah Tahfiz Centre tragedy.

226.    In this regard, the Government will allocate a total of RM50 million to GiatMara for upgrading and maintaining wiring system in all registered Tahfiz schools nationwide.

227.    Furthermore, GiatMara skills training scheme will be introduced to tahfiz school students.

228.    Likewise, a total of RM588 million is allocated as monthly allowance for imam, bilal, KAFA and takmir teachers. As a token of appreciation including tok siak, the Government would like to announce…

A one-off payment amounting to RM1,500, will be given to them of which, RM1,000 will be paid in January 2018, while the balance during Hari Raya Aidilfitri. This will benefit more than 65,000 individuals with an allocation of almost RM100 million.


229.    May Allah SWT bless this 2018 Budget presentation.

230.    …What is the point of being wealthy but weak in soul.

231.    The Government aspires, not only as a nation with physical strengths but rich in soul and character i.e. par excellence in worldly and hereafter.

232.    After months of hard work, involving ministries, agencies, private sector, NGOs, youth and professionals, and most importantly, all segments of the society have contributed

through various platforms and channels in crafting this important document.

233.    Thus, this Budget is the most inclusive that has ever been tabled.

234.    This Budget encapsulates all the three important aspects Dho’ruriyat, Haajiyat and Tahsiniyat in safeguarding rakyat’s welfare and to prosper the nation.

235.    This Budget that has never been crafted so well, even during the last 22 years or the past 60 years of our own nation, and  marked in history, making this  Budget the Mother of All Budgets.

236.    Indeed, this Budget is the collection of various premises which form the basis of a comprehensive Budget, taking into account the needs of all levels of society.

237.    With this, the Budget dispels all doubts as propagated by the Opposition.

238.    In fact, the Opposition is surrounded by misconceptions and is the real actor. There is no certainty in political leadership, how can they be trusted to provide a sound economic leadership.

All these while, they have been making senseless propositions including abolishing GST and reducing taxes. All these are baseless claims.

239.    All praises be to Allah, for His blessings on Government’s efforts.

240.    This is the right time to acknowledge public servants who have been loyal and provide efficient and effective public service    delivery to the rakyat, hence, I am pleased to announce that…

A special payment of RM1,500 be given to all public servants.

The payment will be made twice, of which RM1,000 will be paid in early January 2018 while the balance during Hari Raya Aidilfitri.

Meanwhile, the Government will provide a special payment of RM750 to Government retirees, of which RM500 to be paid in January 2018 while the balance during Hari Raya Aidilfitri.

241.    I trust the rakyat is wise enough to differentiate between truths and lies.

242.    More importantly, when the rakyat choose wisely it paves the path for Malaysia to flourish extensively.

243.    When the rakyat and the Government are united, then the country emerges as a great nation.

244.    We have to plan strategically in charting the course of the nation.

245.    This can only be achieved through great teamwork and friendship. I am grateful for being blessed with a loyal friend… Deputy Prime Minister, Datuk Seri Dr. Ahmad Zahid Hamidi.

246.    This include all the support from Members of the Cabinet, Leaders of Component Parties in steering the nation.

247.    Come what may, we remain steadfast with our commitment.

248.    Let’s together ensure a big victory for Barisan Nasional in the 14th General Election.

249.    O Allah, to You, we pray and submit. God bless Malaysia.

Mr. Speaker Sir, I beg to propose.

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9:33 am

Samsung Galaxy S3 - GPS Fix

As with practically any other device, the Samsung Galaxy S3 has its fair share of complaints. Some have workarounds, some can be solved with mods or apps, and some seem to have no fix at all.

One common issue on the GS3 is that the GPS won't seem to work at all, refuses to lock onto any satellites, or frequently loses the connection, making it pretty much useless. But there does seem to be a quick (and somewhat unthinkable) solution to this—tightening a few screws.

You don't even have to take the battery out for this!
Just pop off the back cover on your GS3 using a flat head screwdriver, spudger, or your fingernail. Around the phone's edges, there are 10 screws. Use a small Phillips screwdriver to tighten them as much as you can.

Once you're finished, put the back cover back on and try out your GPS again. You should be able to get a lock on more satellites along with faster navigation and less signal dropping.

If you start to notice issues again, just retighten the screws, just like you would for that wobbly dining room table that always needs retightened.

It may be annoying, but it's free and a lot quicker than getting a new phone. And this should be your first DIY fix tried before resigning to installing new ROMs, flashing back to stock, trying aGPS patches, editing your gps.conf file, uninstalling/reinstalling Maps, etc.

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9:31 am


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 2016 and to appropriate that sum for the service of that year” be read a second time.


Mr. Speaker Sir,

1. In the name of Allah, the Most Gracious and the Most Merciful. All praise is due to Allah, the Lord of the A’lamin. Wa bihi Nastai’n.
2. Praise be to Allahu Ta’ala who created the seven heavens and earth and who also created a state of darkness into the light.
3. Peace be upon the Prophet Muhammad, the chosen Messenger who rejects falsehood, and safeguards rights and truths.
4. Since March 2009, I have presented eleven major documents on the nation’s economy.
5. These include the first stimulus package, the second stimulus package, the 10th Malaysia Plan and the 11th Malaysia Plan (11MP) as well as the annual budgets since 2010. Today, I will present the 2016 Budget.
6. With Allah’s grace, we pray and hope that we will be able to continue presenting the Budget in the coming years.
7. The Budget presented today represents a manifestation of the 11MP. This is the first Budget in a series of five budgets until our beloved nation transforms into a high-income advanced economy.
8. This Budget leverages the lessons from history based on Al-Quran through the understanding of Surah An-Nisa’ verse 58 which was translated by Imam Qurtubi, as leaders, it is incumbent upon us to safeguard the rights and ensure equitable distribution of wealth among the rakyat.
9. Even before the presentation of the Budget today, there have been debates in various media regarding the Malaysian economy, alleging that the country is on the verge of bankruptcy; the economy is in a crisis; and the ringgit has depreciated sharply, due to the perception of ineffective financial governance and non-prudent Government spending.
Given the unwarranted comments and misperceptions, it is only fair that I take the opportunity in this august House to explain, particularly to the honourable members of Parliament as well as the rakyat, so that they are able to directly obtain a clear and correct understanding.


10. Since 2009, the nation has been confronted with several economic challenges. We faced various uncertainties in the global economy as well as domestic economic issues.
11. Praise be to the Almighty, despite daunting challenges, the Government has managed to address and overcome these challenges effectively.
12. To summarise, there are six main achievements that we can be proud of in uplifting the economy from where it was half a decade ago.
13. First Achievement: The Malaysian economy grew by 5.3% in the first half of 2015 and is expected to expand between 4.5% and 5.5% this year despite a slower global growth of 3.1%.
14. In this context, we have to remember that there is no comparison whatsoever between the current economic situation with 1998. Clearly, in 1998 Asia experienced a financial crisis and the Malaysian economy contracted by 7.4%.
15. We are aware that we are not spared from the impact of a slowdown in the global economy, including declining commodity prices, particularly crude oil, palm oil and rubber, depreciation of the ringgit and slower growth in major advanced economies.
16. Amid this scenario, the nation’s Gross Domestic Product (GDP) is expected to expand between 4% and 5% in 2016. Growth will be driven by private investment and consumption at 6.7% and 6.4%, respectively.
17. Exports will grow by 0.9% and imports by 1.5%. Meanwhile, the construction sector will expand by 8.4%, services 5.4% and manufacturing 4.3%.
18. Second Achievement: We have consistently reduced the fiscal deficit from 6.7% of GDP in 2009 to an estimated 3.2% this year.
19. Third Achievement: Through the National Transformation Policy (NTP) commencing 2010, the Government continued to vigorously eradicate poverty.
20. As a result, over the five-year period, the incidence of poverty has been reduced from 3.8% in 2009 to 0.6% in 2014. In fact, hardcore poverty has almost been eradicated.
21. Fourth Achievement: The unemployment rate in 1999 was 3.4%.
22. With Allah’s blessing, as a result of effective economic management, we have reduced the unemployment rate to 2.9% and the Government has succeeded in creating 1.8 million jobs.
23. Fifth Achievement: A total of 5 million rakyat in rural areas have benefited from basic amenities such as electricity and clean water supply.
24. Sixth Achievement: The rakyat has benefited from several initiatives such as Bantuan Rakyat 1Malaysia (BR1M), 1Malaysia Clinics, Urban Transformation Centres (UTCs), Rural Transformation Centres (RTCs) and Kedai Rakyat 1Malaysia, towards reducing the cost of living.
25. The inflow of foreign direct investment remains strong at RM22.4 billion in the first half of this year, while the FTSE Bursa Malaysia KLCI (FBM KLCI) recorded 1,705 points, with market capitalisation of RM1.675 trillion as at 22 October 2015.
26. Although the ringgit has depreciated, the international reserves remained high at RM418 billion as at 15 October 2015, sufficient to finance 8.8 months of retained imports and is 1.2 times the short-term external debt.
27. Moreover, the inflation rate is expected to remain manageable, between 2% and 3% in 2016.
28. In reality, Malaysia is not a failed or bankrupt nation, but one which is stable with strong economic fundamentals and remains competitive.
Clarification on Goods and Services Tax (GST) Collection
29. Before we continue with the Budget presentation, there are two important things to be clarified. The first is regarding GST, which has been hotly debated since early this year.
30. On GST, the Government appreciates the high and encouraging registration and compliance.
31. I wish to inform this august House that to date, almost 400,000 companies have registered for GST with a submission rate of more than 90%.
32. The Government’s decision in implementing GST is right, more so as crude oil prices have fallen more than 50% from a level of USD100 per barrel in 2014.
33. The fact is, Petroliam Nasional Berhad (PETRONAS) contributes a certain amount of dividend to Treasury every year. The amount of dividend is dependent on global crude oil prices.
34. For example, when crude oil prices averaged USD100 per barrel, revenue from PETRONAS dividend and petroleum tax revenue totalled RM62 billion.
35. The scenario, however, changed when crude oil prices declined to around USD50 per barrel. The contribution from PETRONAS and oil-related sectors will be RM44 billion in 2015.
36. As oil prices are expected to remain low in 2016, oil-related revenue is estimated at RM31.7 billion.
37. As announced several times, the rakyat can be reassured as revenue from GST collection will be returned to benefit the rakyat, in addition to clarifying how GST will be spent. This is the real intention of the Government and there is no hidden agenda.
38. The situation has changed. This intention must be balanced with the reality of the Government’s financial position due to the uncertainty in global crude oil prices as I elaborated earlier. However, due to the reduction in oil-related revenue, the collection from GST has helped to cover a major portion of the shortfall.
39. In this regard, in 2016 based on the Government’s calculation, if GST was not implemented and we had to rely on Sales Tax and Service Tax (SST) as previously, Government revenue would be lower by RM21 billion.
40. Furthermore, if SST was retained, collection would have been only RM18 billion compared with GST revenue of RM39 billion.
41. Consequently, the fiscal deficit would have increased to 4.8% and not the targeted 3.1% in 2016.
42. If this were to happen, the Government would have been forced to borrow, including to pay civil servants’ salaries; the nation’s credit rating would be downgraded; and all borrowing costs, including personal loans, business loans and housing loans would definitely be higher.
43. We are grateful to the Almighty that the Government remained steadfast and had the political will to implement GST, although this decision was faced with various challenges and was unpopular.
44. Those who used to vehemently oppose GST have now accepted it and even included it in their Budget document.
45. This clearly indicates the changing and inconsistent stand of the opposition.
46. As a responsible Government, however, we will continue to make the right decisions though not popular in the best interest of the rakyat and the nation.
47. In fact, GST is an efficient tax system as reflected by its implementation in more than 160 countries.
48. Despite the constrains on financial resources, the Government remains sensitive to the difficulties faced by the rakyat.
49. Thus, after receiving feedback from various segments of society including NGOs, I am pleased to announce the Government is prepared to forego the GST revenue on several basic necessities.
50. Seven measures to improve GST treatment, which will be effective from 1 January 2016, are as follows:
51. First: Zero-rating of all types of controlled medicines under the Poisons List Group A, B, C and D as well as an addition of 95 brands of over-the-counter medicines including treatment for 30 types of illnesses such as cancer, diabetes, hypertension and heart disease. This is a double increase from 4,215 to 8,630 brands of medicines.
52. Second: Zero-rating of the following food items:
i. Soybean-based milk and organic-based milk for infant and children;
ii. Dhal or what is popularly known as Parpu in the north, such as chickpeas, green and white beans;
iii. Lotus root and water chestnut;
iv. Mustard seeds;
v. Jaggery powder; and
vi. Dried mee kolok.
53. Third: To enable small-scale farmers to benefit from the Flat Rate Scheme, the Government proposes that the annual sales turnover threshold for registration under this scheme be reduced from RM100,000 to RM50,000.
54. The requirement to maintain records will also be simplified. With the reduction in the threshold, more small-scale farmers will be able to register under the scheme and impose an additional 2% on sales value and this amount can be retained to offset against any GST paid on their input.
55. Fourth: Companies involved in maintenance, repair and overhaul (MRO) activities in the aerospace industry are allowed to participate in the Approved Trader Scheme which relieves them from paying GST on the imported goods.
56. Fifth: GST relief is also provided for reimportation of goods that were exported temporarily for the purpose of promotion, research or exhibition.
57. Sixth: For the oil and gas industry, GST relief is provided on the reimportation of equipment such as equipment for oil and floating platforms that are temporarily exported for the purpose of rental and leasing.
58. Seventh: GST relief is also provided on teaching materials and equipment procured by skills and vocational training providers conducting approved programmes under the National Skills Development Act 2006.
59. The Government realises that the majority of mobile phone users, particularly youth depend on prepaid telecommunication services or prepaid cards.
60. In this regard, Malaysian consumers will receive rebates equivalent to the amount of GST paid, which will be credited directly to their prepaid accounts. This measure will be effective from 1 January 2016 to 31 December 2016.
61. In an effort to strengthen the tax structure to be more competitive and progressive, it is proposed that the taxable income band for the highest tax rate be increased from 25% to 26% for those with an income between RM600,000 and RM1 million.
62. Meanwhile, for those with an income above RM1 million, the tax rate will be increased from 25% to 28%.


63. The 2016 Budget allocates a total of RM267.2 billion compared with the revised RM260.7 billion in 2015. Of this amount, RM215.2 billion is for Operating Expenditure and RM52 billion for Development Expenditure.
64. Under Operating Expenditure, RM70.5 billion is for Emoluments and RM36.3 billion for Supplies and Services. Meanwhile, a total of RM106.6 billion is allocated for Fixed Charges and Grants, RM761 million for Purchase of Assets and RM1 billion for Other Expenditure.
65. Under Development Expenditure, the economic sector will receive the highest share at RM30.1 billion, followed by the social sector RM13.1 billion for education and training, health, housing and the well-being of the rakyat.
66. In addition, RM5.2 billion is allocated to the security sector. The balance of RM1.6 billion is for general administration and RM2 billion for contingencies.
67. In 2016, the Federal Government revenue collection is estimated at RM225.7 billion, an increase of RM3.2 billion compared to 2015.
68. Taking into account the revenue and expenditure forecast, the fiscal deficit is expected to decline to 3.1% of GDP in 2016.
69. This Budget and future Budgets will be premised on striking a balance between the Capital Economy and People Economy. In addition, we need to achieve an inclusive and sustainable growth as well as build a competitive, progressive and a morally strong nation, with a society that is united.
70. Therefore, I propose to table the Budget with the theme “Prospering the Rakyat” based on five priorities as follows:
First Priority: Strengthening Economic Resilience;
Second Priority: Increasing Productivity, Innovation and Green Technology;
Third Priority: Empowering Human Capital;
Fourth Priority: Advancing Bumiputera Agenda; and
Fifth Priority: Easing the Cost of Living of the Rakyat.
72. Measure 1: Boosting Domestic Investment. Domestic investment activity will be intensified with its contribution to GDP estimated at 26.7% in 2016. It will be driven by the increase in private investment at RM218.6 billion and supported by public investment of RM112.2 billion.
73. Under this measure, among the projects and initiatives that will be implemented are:
First: Development of the Malaysian Vision Valley covering an area of 108,000 hectares from Nilai to Port Dickson, as announced in the 11MP, with an initial investment forecast of RM5 billion in 2016;
Second: Implementation of Cyber City Centre in Cyberjaya with a development cost of almost RM11 billion for a period of five years;
Third: Development of an airport township or KLIA Aeropolis in an area covering 1,300 acres which is expected to attract an investment of RM7 billion;
Fourth: Investment of RM6.7 billion by Khazanah Nasional Berhad in nine high-impact domestic projects in sectors such as healthcare, education, tourism as well as communication software and infrastructure;
Fifth: Khazanah Nasional to allocate RM500 million as venture capital and private equity fund including a tourism capital venture fund of RM50 million;
Sixth: Investment of RM18 billion estimated in 2016 for the Refinery and Petrochemical Integrated Development Project (RAPID) Complex in Pengerang, Johor;
Seventh: To attract more private investment. Among the projects being implemented are the development of Rubber City, Kedah with an allocation of RM320 million, Samalaju Industrial Park, Sarawak RM142 million and Palm Oil Jetty in Sandakan, Sabah RM20 million;
Eighth: Focus will also be given to chemical, electrical and electronics, machinery and equipment, aerospace and medical devices industries as well as services. For this, RM730 million is allocated to funds under the Malaysian Investment Development Authority (MIDA); and
Ninth: To further promote reinvestment among existing companies in the manufacturing and agriculture sectors whose Reinvestment Allowance incentive has expired, a new incentive that is, Special Reinvestment Allowance, will be provided. The rate of claim is at 60% of the qualifying capital expenditure and is allowed to be set off against 70% of statutory income from year of assessment 2016 to 2018.
74. Measure 2: Invigorating Capital Market. To further invigorate the capital market, the Government agrees to implement several initiatives, including tax deduction on issuance costs of Sustainable and Responsible Investments (SRI) sukuk and 20% stamp duty exemption on Shariah-compliant loan instruments to finance the purchase of houses. Other initiatives will be announced later.
75. Measure 3: Energising Small and Medium Enterprises (SMEs). Indeed, SMEs play a key role in developing the business value chain and are expected to contribute 41% of GDP by 2020. For this, the following five initiatives will be undertaken:
First: Provide an additional RM1 billion for the Shariah-compliant SME Financing Scheme until 31 December 2017 with the Government subsidising 2% of the financing profit rate;
Second: Allocate RM107 million for the SME Blueprint to provide funds for entities at various stages of business development;
Third: Allocate RM60 million for the Entrepreneurs Acceleration Scheme, and SME Capacity and Capability Enhancement Scheme;
Fourth: Establish a RM200 million SME Technology Transformation Fund under the SME Bank to provide soft loans at 4%; and
Fifth: RM18 million to expand the Small Retailer Transformation Programme (TUKAR) and Automotive Workshop Modernisation (ATOM) projects.
76. Measure 4: Improving Infrastructure. Infrastructure is a catalyst for overall economic and social development.
77. Currently, Malaysia is ranked 25th out of 160 countries in the 2014 World Bank Logistics Performance Index report.
78. In this regard, the Government will continue to improve logistics infrastructure, including building and improving rail transport network and highways in 2016. These include the highways of Damansara – Shah Alam, Sungai Besi – Ulu Klang, Pulau Indah and Central Spine Road.
79. To reduce traffic congestion in Kuala Lumpur, RM900 million is provided to implement the Jalan Tun Razak Traffic Dispersal Project through a strategic public and private partnership.
80. The Government will also study the feasibility of constructing a coastal highway from Masjid Tanah to Klebang and from Klebang to Jambatan Syed Abdul Aziz in Melaka.
81. A sum of RM42 million is provided for the construction of Mukah Airport, Sarawak as well as the upgrading of airports in Kuantan and Kota Bharu. A feasibility study will be undertaken for the extension of the runway in Batu Berendam Airport in Melaka.
82. To ensure the comfort of people in urban areas, an efficient public transport system is being intensively implemented, involving significant outlays.
83. Allow me to provide an update on one of the biggest projects in the nation’s history, that is, the MRT-LRT, an integrated public transport system.
84. The first Phase of the Ampang LRT line extension project spanning 18.1 kilometres (km) will be ready for use in March 2016. Meanwhile, the LRT extension line from Kelana Jaya to Putra Heights spanning 17.4 km will be ready for commuters from the middle of 2016. Both these projects cost RM10 billion.
85. The MRT line from Sungai Buloh – Semantan will also be ready for commuters in December 2016. Meanwhile, Phase 2 of Semantan – Kajang is expected to be completed by mid-2017. These projects covering 51 km are being implemented at a cost of RM32 billion.
86. The Government will also implement other public transport networks as follows:
First: MRT II project from Sungai Buloh – Serdang – Putrajaya spanning 52 km, with an estimated cost of RM28 billion, will benefit two million people. Construction will commence in the second quarter of 2016 and is expected to be completed by 2022;
Second: LRT3 project from Bandar Utama, Damansara – Johan Setia, Klang spanning 36 km, with an estimated cost of RM10 billion, will benefit two million people. Construction will commence in 2016 and is expected to be completed by 2020. Meanwhile, the Government will continue negotiations on the high-speed rail with the Singapore Government; and
Third: For public bus services, the Rapid Transit Bus (BRT) project at a cost of more than RM1.5 billion and BRT Kota Kinabalu at a cost of almost RM1 billion, will be implemented.
87. To improve the telecommunication infrastructure, Malaysian Communications and Multimedia Commission (MCMC) will provide RM1.2 billion, among others, for rural broadband projects which will see a four-fold increase in Internet speed from 5 megabyte per second to 20 megabyte per second; National Fibre Backbone Infrastructure; High-speed Broadband; and undersea cable system.
88. A sum of RM250 million is allocated for the national broadcasting digitalisation project to enhance audio visual quality and provide value-add to TV content as well as interactive data transactions.
89. Since independence, the well-being of the rural population remains our priority. We will never marginalise them. To date, under the Barisan Nasional Government, rural road coverage has increased from 46,000 km in 2009 to 51,000 km, while 98% of rural areas have access to electricity and almost 95% have access to water supply.
90. The Government will continue with efforts to implement infrastructure development in rural area as follows:
First: RM1.4 billion to build and upgrade 700 km of rural roads nationwide. A sum of RM200 million is provided for the upgrading of roads in Federal Land Development Authority (FELDA) settlements;
Second: RM878 million for the Rural Electrification Project covering 10,000 houses and RM568 million for the Rural Water Supply Project to benefit 3,000 houses;
Third: RM60 million for the Social Amenities Programme for drainage projects to mitigate floods. Emphasis will be given to states affected by floods such as Kelantan, Kedah, Terengganu, Pahang, Sabah and Sarawak;
Fourth: As a catalyst for entrepreneurship in rural areas and for rural communities, RM70 million is allocated for continuation of the Rural Business Challenge (RBC) and Sustainable Rural programmes; and
Fifth: RM67 million is allocated to the MARA Bus Transport Project for operating buses on uneconomic routes in rural areas.
91. Measure 5: Promote and Strengthen Economic Activity. The tourism sector has the highest potential to generate economic activities in the current situation. For 2016, the Government targets 30.5 million tourists, which is expected to contribute RM103 billion to the economy. For this, a sum of RM1.2 billion is allocated to the Ministry of Tourism and Culture.
92. Online visa applications will be implemented beginning with China, India, Myanmar, Nepal, Sri Lanka, the US and Canada.
93. To facilitate tourists to visit Malaysia, the Government will implement E-Visa by mid-2016.
94. To take advantage of the current level of the ringgit and in efforts to attract more tourists, the 100% income tax exemption on statutory income for tour operators will be extended from year of assessment 2016 until 2018.
95. Economic activity in the agriculture sector provides a source of food as well as a source of income for farmers, paddy farmers and fishermen.
96. In this regard, RM5.3 billion is allocated to the Ministry of Agriculture and Agro-based Industry. The programmes for 2016 are:
First: RM450 million for various high-impact programmes such as fruit and vegetable cultivation, matching and research grants for herbal products as well as fish cage farming;
Second: RM180 million to upgrade drainage and irrigation infrastructure in the Integrated Agricultural Development areas;
Third: RM190 million to FAMA, for the Price Reduction Programme; increase farmers’ markets by an additional 50; and establish 150 new Agrobazaar Rakyat 1Malaysia (ABR1M). Of the goods sold in ABR1M, 40% are fresh food such as fish and vegetables with prices expected to be lower between 5% and 30% compared with market prices; and
Fourth: RM90 million is allocated for Youth Agropreneur Development Programme in the form of in-kind grants; Agriculture Entrepreneurs Financing Fund; rebranding MARDI, Department of Veterinary Services, Department of Agriculture and the Department of Fisheries; as well as to implement the Multiplier Farm Project for breeding cattle and free-range chicken.
97. In formulating appropriate policies for the current economic situation, the Government proposes the tax incentive for food production be extended until 2020. The following incentives will be provided:
First: Companies that invest in subsidiaries that undertake food production project will be given tax deduction equivalent to the amount invested;
Second: Companies that undertake new food production projects will be given 100% income tax exemption for 10 years; and
Third: Existing companies undertaking project expansion will be provided with the same incentive for five years.
98. The scope of the incentive will be widen to include rearing deer, cultivation of mushroom, coconut, seaweed, honey bees and stingless honey bees and planting animal feed crops such as sweet potato and tapioca.
99. In addition to the above measures, the Government will intensify support to strengthen exports.
100. A sum of RM235 million is allocated to MATRADE for 1Malaysia Promotion Programme, Services Export Fund and Export Promotion Fund.
101. MATRADE and SME Corp will also increase the capacity of SMEs and mid-tier companies to export goods and services overseas.
102. To diversify the use of foreign currency in trade transactions, Bank Negara Malaysia provides the Ringgit-Renminbi credit swap facility for local banks.
103. Currently, SMEs are eligible to claim income tax exemption of 10% or 15% of the value of increase in exports. To further increase exports, SMEs are given flexibility to comply with the value-add condition that is from 30% to 20% and from 50% to 40% for manufactured products. This flexibility will be given for years of assessment 2016 to 2018.
104. To encourage evaluation and international standards compliance services to be conducted in the country, the Government will provide incentives for the establishment of Independent Conformity Assessment Bodies (ICABs).
105. As of today, Malaysia has signed 13 free trade agreements (FTAs) comprising six regional agreements through ASEAN and seven bilateral agreements.
106. As an open economy, with total trade accounting for about 150% of GDP, the Government has agreed in principle to the Trans-Pacific Partnership Agreement (TPP). However, the final decision will be made by Parliament.
107. SECOND PRIORITY: INCREASING PRODUCTIVITY, INNOVATION AND GREEN TECHNOLOGY. To raise productivity, we need to accelerate innovation and creativity. The use of green technology will also ensure sustainability of the nation’s natural resources.
108. Therefore, the Government has targeted an annual labour productivity growth of 3.7% through:
109. Measure 1: Accelerating Innovation and Entrepreneurship. To make the nation a competitive technology hub in the region, RM1.5 billion is allocated to the Ministry of Science, Technology and Innovation (MOSTI).
110. The year 2016 will be declared as Malaysia Commercialisation Year towards spurring commercialisation of R&D products by local research institutions. The following initiatives will be implemented:
First: SMEs that incur expenditure on R&D projects up to RM50,000 for each year of assessment are eligible to claim double tax deduction automatically. This facilitation is provided for the years of assessment 2016 to 2018;
Second: RM100 million to Malaysian Innovation Agency (AIM);
Third: RM200 million under the Funding Scheme for Technology and Innovation Acceleration by Malaysia Debt Ventures Berhad;
Fourth: RM35 million to MaGIC as a Leading Regional Entrepreneurship and Innovation Hub, including RM10 million as initial allocation for the Corporate Entrepreneurs Responsibility Fund;
Fifth: RM30 million for several youth entrepreneurship programmes such as Global Entrepreneurship Community, BAHTERA, GREAT, 1MET, National Innovation Competition and a Pilot Coding Project in schools; and
Sixth: To accelerate demand-driven innovation activities in 2016, the Government will allocate RM50 million for a Public-Private Research Network.
111. Measure 2: Leveraging Advancements in Technology. To enhance the use of technology in the construction sector, the Government will promote the use of Industrialised Building System (IBS). In this respect, the Government will encourage more companies to adopt the IBS technology.
112. For this, an IBS Promotion Fund of RM500 million will be established through the SME Bank to provide soft loans to developers and contractors in category G5 and below.
113. Measure 3: Inculcating Green Technology. The Ministry of Energy, Green Technology and Water will implement various projects including to provide clean water supply by building water treatment plants with an allocation of RM877 million. A sum of RM515 million is allocated to ensure the reliability of electricity supply in Sabah.
114. The Government targets to reduce the intensity of greenhouse gas emissions (GHGs) to 40% of GDP in 2020 through:
First: RM45 million for the implementation of an Electricity Mobility Action Plan including energy audit process;
Second: Sustainable Energy Development Authority (SEDA) will offer a quota of 100 megawatts per year under the Net Energy Metering Scheme to encourage the use of solar photovoltaics; and
Third: Extend the implementation period of the Green Technology Financing Scheme until 31 December 2017 with a fund of RM1.2 billion.
115. THIRD PRIORITY: EMPOWERING HUMAN CAPITAL. This is a critical factor for the future of the nation. In this regard, the following measures will be undertaken:
116. Measure 1: Strengthening Malaysia’s Quality of Education. Under the Malaysia Education Blueprint 2013 – 2025, a sum of RM41.3 billion will be allocated in 2016.
117. Among others, the Government will build:
• 30 primary schools;
• 27 secondary schools;
• Four MARA Junior Science Colleges (MRSM) will be built in Sik, Kedah, Ketereh and Tanah Merah, Kelantan and Bagan Datoh, Perak; and
• Five fully residential schools in Alor Gajah, Melaka; Pendang, Kedah; Segamat and Ledang, Johor; and Jerantut, Pahang.
118. A sum of RM44.6 million is allocated to implement various programmes in 9,113 pre-school classes in schools nationwide.
119. To increase Proficiency in Bahasa Malaysia and English, a sum of RM135 million is allocated for upholding Bahasa Malaysia and strengthening English Language.
120. Given the importance of the English Language to face current global competition, another two initiatives, namely the Dual Language Programme and Highly Immersive Programme will be implemented as an option at a cost RM38.5 million. In this respect, 300 schools have been identified as a pilot project.
121. To ease the burden of schooling expenses faced by parents, the RM100 schooling assistance will be continued. From January 2016, it will be targeted to students from households with monthly income of RM3,000 and below. This will benefit 3.5 million students through an allocation of RM350 million.
122. The supplementary food programme involving 550,000 students from poor families listed in e-Kasih will be enhanced.
123. Previously, the programme only provided meals during recess, but it will now be expanded to provide breakfast with an additional cost of RM173 million. The overall cost for the programme is RM423 million.
124. As in previous years, the Government will continue to provide allocation to develop and maintain education facilities for national schools, national-type Chinese schools, national-type Tamil schools, religious schools, fully residential schools, national religious assisted schools, MARA Junior Science Colleges, registered Sekolah Pondok and national-type Chinese secondary schools or Conforming schools which adopt the national curriculum, with a total allocation of RM500 million.
125. Measure 2: Strengthening Higher Education. Under this measure, the scholarship programmes will be continued with allocations as follows:
• RM1.65 billion through Public Service Department;
• RM288 million through Ministry of Education;
• RM250 million through Ministry of Higher Education; and
• RM258 million through Ministry of Health.
126. To encourage the rakyat to pursue higher education, I am pleased to announce that the maximum relief on tuition fees for an individual taxpayer is increased to RM7,000 from RM5,000 a year.
127. This will be complemented with the continuation of the RM250 1Malaysia Book Voucher Programme for 1.2 million students. To prevent misuse of the voucher, the redemption will only be allowed in designated book shops.
128. Measure 3: Transforming Technical and Vocational Education and Training (TVET). In efforts to enhance employees’ income, we need to target 60% of 1.5 million new jobs by 2020 are for workers with TVET skills. A sum of RM4.8 billion is allocated to 545 TVET institutions.
129. Towards this, the Ministry of International Trade and Industry (MITI) will establish an Industrial Skills Committee to coordinate TVET programmes in collaboration with industries.
130. More than 330,000 trainees will benefit through programmes including the following:
First: RM585 million for TVET training equipment at polytechnics, community colleges, MARA Skills Institutes, National Youth Skills Institutes, Industrial Training Institutes, GiatMARA and vocational colleges;
Second: RM350 million to finance various TVET training programmes under the Skills Development Fund Corporation; and
Third: RM80 million to establish a Tourism Academy at Community College in Kota Kinabalu and Vocational College in Sandakan as well as Industrial Training Institute of Serian, Sarawak.
131. Measure 4 is for Empowering Youth, Community and NGOs. For this measure, RM930 million is allocated to the Ministry of Youth and Sports for the following initiatives:
First: RM280 million for technical and vocational training in National Youth Skills Training Institutes (IKBN) and National Youth Advance Skills Training Institutes (IKTBN);
Second: RM50 million to enhance youth participation in economic and entrepreneurial activities;
Third: RM145 million to prepare athletes for the 29th SEA Games and the 9th ASEAN Para Games in 2017 in Kuala Lumpur;
Fourth: RM75 million to produce world-class champions under the Preparation of Elite Athletes (Podium Programme);
Fifth: RM22 million to build two sports complexes in Bagan Datoh and Kuantan; and
Sixth: RM360 million to improve the National Service Training Programme (PLKN) for 20,000 trainees. The new curriculum will include creative thinking and technical skills.
132. A sum of RM160 million is allocated for NGOs to implement programmes based on community development, solidarity, social welfare, health and safety.
133. Measure 5, to empower human capital through a quality workforce. To improve the employability of the workforce, the following programmes will be implemented:
First: Allocate 30% of the Human Resources Development Fund (HRDF) to implement training programmes to meet the needs of local industries in Sabah and Sarawak as well as an Outplacement Centre to retrain retrenched workers; and
Second: Train an additional 15,000 participants under the 1Malaysia Training Scheme (SL1M) with an allocation of RM250 million which will be fully financed by GLCs.
134. To improve the management of foreign workers, a sum of RM77 million will be provided by PSMB to implement programmes such as Train & Replace in selected fields such as hospitality, shipping and transport.
135. The Government remains committed to achieving at least 30% participation of women in decision-making positions in the public and private sectors. This includes at the board of directors level. The Government will continue to monitor the achievement of this policy.
136. FOURTH PRIORITY: ADVANCING BUMIPUTERA AGENDA. I would like to emphasise that empowering Bumiputera is a national agenda and this includes the development of Bumiputera community in Sabah and Sarawak.
137. A sum of RM150 million is allocated to the Bumiputera Agenda Unit (TERAJU) to implement various programmes including Bumiputera Entrepreneurs Startup Scheme and High Performing Bumiputera Companies Programme.
138. A sum of RM150 million is allocated to the Bumiputera Education Steering Foundation to implement Peneraju Tunas, Peneraju Profesional as well as Peneraju Skil dan Iltizam programmes.
139. Majlis Amanah Rakyat (MARA) is allocated RM3.7 billion for expenditure, including the sponsorship of 72,000 Bumiputera students to continue studies at tertiary level.
140. To increase equity ownership and strengthen Bumiputera entrepreneurship and businesses, the following initiatives are allocated with a sum of:
First: RM400 million to National Equity Fund Limited (EKUINAS);
Second: RM250 million to Perbadanan Usahawan Nasional Berhad (PUNB);
Third: RM150 million to Pelaburan Hartanah Berhad; and
Fourth: RM100-million loan to UDA Holdings for development of Kampung Baru, Kuala Lumpur.
Intensifying Development in Sabah and Sarawak.
141. The following development agenda will be implemented in Sabah and Sarawak:
First: Sarawak Pan-Borneo Highway spanning 1,090-km is expected to be completed in 2021 with an estimated cost of RM16.1 billion.
In Sabah, construction work on the 706-km highway from Sindumin to Tawau will commence in 2016 with an estimated cost of RM12.8 billion. I am pleased to announce that the Pan-Borneo Highway will be toll-free;
Second: Air transportation is one of the main modes of transportation for people in the interior areas of Sabah and Sarawak as well as Labuan. Thus, the domestic air transportation for economy class passengers on Rural Air Services (RAS) routes is exempted from GST;
Third: As a new programme, RM70 million is provided through Bank Simpanan Nasional in collaboration with the state government of Sabah and Sarawak for interest free loans for the purpose of building longhouses with a maximum loan up to RM50,000 for every unit in the longhouse;
Fourth: RM70 million subsidy for hill paddy fertiliser to increase food supply and income of hill paddy farmers in Sabah and Sarawak. The programme will cover 65,000 hectares of crop areas in Sarawak and 11,000 hectares in Sabah;
Fifth: RM260 million is provided to ensure price uniformity of selected items nationwide through the 1 Price 1Sarawak and 1 Price 1Sabah programmes;
Sixth: RM115 million is allocated to the Special Programme for Bumiputera in Sabah and Sarawak, such as for native customary rights, including mapping procedures and customary land surveys as well as for building native courts. For native customary rights, RM20 million is provided for land surveys in Sabah and RM30 million in Sarawak; and
Seventh: Enhance services of 1Malaysia Mobile Clinics in the interior areas of Sabah and Sarawak including procurement of new boats and vehicles.
142. FIFTH PRIORITY: EASING COST OF LIVING OF THE RAKYAT. This issue is implemented as follows close to my heart and the Government. Thus, various initiatives will be.
143. Measure 1: Increasing the quality of life of B40 households as follows:
First: TEKUN will provide RM600 million of which RM500 million is for Bumiputera entrepreneurs and RM100 million for 10,000 Indian entrepreneurs through the Indian Community Development Scheme. In addition, SME bank will provide RM50 million to assist small-scale Indian entrepreneurs;
Second: An additional RM200 million to Amanah Ikhtiar Malaysia (AIM) for its micro-financing facility to B40 households;
Third: RM100 million is provided under the Socio-Economic Development of Indian Community Programme in collaboration between NGOs and private skills training institutes;
Fourth: An additional RM90 million is provided for microcredit to Chinese hawkers and petty traders including RM50 million for KOJADI;
In addition, RM40 million is allocated to implement infrastructure projects and soft loans programme for residents in Chinese New Villages for land premium payments and repairing houses;
Fifth: RM50 million is allocated to the Ministry of Rural and Regional Development (KKLW) for the Career and Skills Training Programme as well as the Income Increment Programme. Through these programmes, participants will be able to benefit from skill training and assistance in the form of assets and raw materials; and
Sixth: Provide RM100 million to private skills training institutions and NGOs to enhance skills of the B40 group to help them get jobs or start business.
144. The Government is very concerned about the welfare and progress of the Orang Asli community. For this, RM300 million is allocated as follows:
First: RM80 million for the development of Integrated Villages including in Sungai Siput, Perak which involves the construction of connecting roads, provision of electricity and treated water;
Second: RM45 million for supplementary food assistance, pocket money and school transport fares; and
Third: RM25 million for development of rubber and oil palm plantations as well as cash crops through the Orang Asli Economic Development Project.
145. For the B40 group, the eRezeki and eUsahawan programmes will be expanded nationwide to increase employment opportunities and raise their income. The Government targets 100,000 people from B40 to benefit from the programme through an allocation of RM100 million provided by the Ministry of Communication and Multimedia.
146. For Paddy Farmers, Smallholders and Rubber Tappers, this Budget provides RM852 million to the Rubber Industry Smallholders Development Authority (RISDA) and Federal Land Consolidation and Rehabilitation Authority (FELCRA) to implement various income and productivity enhancement programmes.
147. The Government intends to improve the rubber production incentive (IPG). For this, I am pleased to announce that the IPG activation price of SMR20 FOB is raised from RM4.60 to RM5.50 per kilogramme as well as from RM1.75 to RM2.20 per kilogramme at farm price for scrap rubber or cuplumps.
148. As an illustration, based on the average production of 250 kilogrammes for each hectare per month, smallholders with two hectares are expected to receive income of RM1,000 per month, at a market price of scrap rubber of RM2 per kilogramme.
149. Now with an additional payment of RM0.20 per kilogramme from IPG, the overall income will be RM1,100 per month.
150. The improvement in IPG is expected to raise the income of 300,000 rubber smallholders with an allocation of RM200 million.
151. To encourage paddy farmers to increase the quality and quantity of harvests, the Government will implement a paddy grading initiative and improve the paddy price subsidy scheme or SSHP from 1 January 2016.
152. Paddy grading is based on standardisation of paddy prices at RM1,200 per metric tonne. To complement this initiative, the Government will also raise the rate of SSHP from RM248.10 to RM300 for every metric tonne.
153. This means that if a farmer produces six metric tonnes of paddy that meets the quality with a 20% discount, he is able to receive sales of RM5,760.
154. In addition, the farmer is also entitled to receive an additional income through SSHP with total income increasing from RM1,190 to RM1,440.
155. Overall, the farmer will receive RM7,200 for each harvest. A total of 155,000 farmers will benefit from the improved scheme.
156. Measure 2: Providing Affordable Houses. House ownership is an issue that has often been raised in recent years. The implementation of affordable housing requires the involvement of several agencies.
157. The 2016 Budget will continue with various house ownership programmes for all levels of income as follows:
First: PR1MA to build 175,000 houses which will be sold at 20% below market prices, with an allocation of RM1.6 billion. A total of 10,000 units are expected to be completed next year;
Second: SPNB will build 10,000 units of Rumah Mesra Rakyat with a subsidy of RM20,000 for each house through an allocation of RM200 million;
Third: Build 100,000 houses, priced between RM90,000 and RM300,000, under Perumahan Penjawat Awam 1 Malaysia (PPA1M) by 2018. A Facilitation Fund of up to 25% of development cost is provided;
Fourth: Build 22,300 units of apartments and 9,800 units of terrace houses under the People’s Housing Programme (PPR) with an allocation of RM863 million to KPKT;
Fifth: Establish a First House Deposit Financing Scheme under KPKT to assist first-time house buyers of affordable houses to pay the deposit. For this, RM200 million is allocated;
Sixth: Build 5,000 units of PR1MA and PPA1M houses in 10 locations in the vicinity of LRT and monorail stations, including in Pandan Jaya, Sentul and Titiwangsa;
Seventh: Allocate RM60 million to the Department of Orang Asli Development particularly for building houses for the community;
Eighth: Build houses for the second generation of settlers comprising 20,000 units by FELDA, 2,000 units by FELCRA and 2,000 units by RISDA.
For houses built by FELDA, the maximum price is reduced to RM70,000 from RM90,000 previously;
Ninth: GLCs to build affordable houses in the vicinity of the MRT station in Bandar Kwasa Damansara. Kwasa Land owned by EPF will build 800 units and Sime Darby Property 4,600 units; and
Tenth: Allocate RM40 million to KPKT for reviving abandoned low and medium-cost private housing projects;
In addition, exemption on stamp duty is given on financing instruments to contractors who revive the project as well as the original purchaser of the abandoned house.
158. To provide a comfortable living environment for the people, the following measures will be implemented:
First: RM150 million to build and repair 11,000 dilapidated houses in rural areas by KKLW; and
Second: RM155 million for maintenance of low-cost public housing and 1Malaysia Maintenance Fund by KPKT. Among others, the Fund provides 100% financing for the repair of lifts, railings as well as rewiring.
159. Measure 3: Quality Healthcare Services. Every country wishes to have the best world-class health quality. This is what the Barisan Nasional Government has and continues to strive for. Among the projects for health services that will be implemented are:
First: Building five new hospitals in Pasir Gudang, Kemaman, Pendang, Maran and Cyberjaya;
Second: The RM848-million Kuala Lumpur Women and Children’s Hospital will commence operations in October 2016;
Third: Redevelopment of Kajang Hospital;
Fourth: Provide RM260 million to build and upgrade rural clinics, health clinics, dental clinics as well as quarters nationwide;
Fifth: Allocate RM52 million for operating the existing 328 1Malaysia clinics and establishing 33 new ones;
Sixth: Allocate RM72 million to provide medical assistance, including haemodialysis, which is expected to benefit nearly 10,000 poor patients; and
Seventh: RM4.6 billion will be allocated for the supply of medicines, consumables, vaccines and reagents to all Government hospitals and clinics.
160. Beginning 1 January 2016, the Government will impose full medical charges on non-citizens.
161. Measure 4: Ensuring the Welfare of the Less Fortunate and Persons with Disabilities (PWD). The Government will continue to strengthen the social safety net system with an allocation of almost RM2 billion to the Ministry of Women, Family and Community Development to assist PWD, the elderly and poor families. For this, the following programmes will be implemented:
First: Allocate RM445 million for monthly allowance of RM350 for employed PWD; assistance of RM200 for unemployed PWD; and assistance of RM300 for taking care of bedridden PWD. The assistance will benefit nearly 150,000 PWD;
Second: RM100 million is allocated to establish an additional 20 Community-Based Rehabilitation Centres; and
Third: RM662 million is allocated for monthly assistance of RM100 to RM450 for children from poor families and RM300 for poor senior citizens.
162. Last year, the nation faced two major disasters, that is, massive floods at end-2014 and a major earthquake in Ranau, Sabah. If proactive measures are not taken, such disasters can cause huge losses amounting to billions of ringgit and more importantly, the loss of lives.
163. To strengthen natural disaster management, a sum of RM180 million will be provided including for establishing the National Disaster Management Agency under the Prime Minister’s Department.
164. A sum of RM730 million is provided for the Flood Mitigation Projects nationwide. Meanwhile, RM60 million is allocated to implement the National Flood Forecasting and Warning Programme and to develop a National Earthquake and Tsunami Sub-Centre in Sabah.
165. It is clear that this administration is carefully undertaking policies and plans as practised for decades.
166. I would like to reiterate that this Budget is part of a series of major measures which will enable us to achieve the status of an advanced nation.
167. However well we plan, ultimately the success of the nation depends on our ability to remain united.
168. We are thankful to the security forces for their service and sacrifice in ensuring peace and security in the country.
169. Therefore, the Government is committed to implementing capacity-building plans for the Malaysian Armed Forces (ATM) in stages.
170. In this regard, RM17.3 billion is allocated to the Ministry of Defence. This includes the procurement of six Littoral Combatant Ships, Very Short Range Air Defence weapons system, armoured vehicles and the A-400M Airbus.
171. ATM will be equipped with the latest technology including the use of Unmanned Airborne System to improve Intelligence, Surveillance and Reconnaissance capacity.
172. A sum of RM523 million is allocated for the development of an ESSCOM armed forces camp in FELDA Sahabat, Lahad Datu, Sabah.
173. In appreciation of the contribution of our heroes, a sum of RM160 million is provided to build 4,000 quarters for ATM personnel.
174. In addition, the Armed Forces Fund Board (LTAT) plans to build 2,000 units of affordable houses for armed forces personnel beginning 2016.
175. The Malaysian Maritime Enforcement Agency (APMM) is allocated RM864 million, among others, for the acquisition of Offshore Patrol Vessels and patrol boats.
176. To enhance safety and security in the country as well as to continuously reduce crime rate, RM13.1 billion is allocated. Among the initiatives that will be implemented:
First: RM155 million for building two new district police headquarters (IPD) in Lawas, Sarawak and Kota Kinabalu, Sabah while 10 IPD and five police stations are under construction;
Second: Plans to build 2,000 units of affordable houses for members of Polis Diraja Malaysia (PDRM), among them, in Rawang while other areas are being identified;
Third: RM36 million is allocated to build offices, quarters and upgrading of immigration detention depots;
Fourth: RM50 million for enhancing security measures in prisons; and
Fifth: RM20 million for the Safe City Programme in 60 black areas, among others, to provide pedestrian walkways and lighting in selected areas.
I would like to announce an additional 500 motorcycles and 500 cars for the patrolling unit at PDRM with a total allocation of RM35 million.
177. To enhance integrity and reduce leakages as well as corruption, Malaysian Anti-Corruption Commission (MACC) will be strengthened with relevant programmes and training. With this, the number of MACC officers will be increased as required.
178. The philosophy of 11MP and many other documents, including this Budget, is to prioritise the welfare and interest of the rakyat.
179. As we are aware, Malaysia is a progressive, dynamic and moderate Islamic nation well-known all over the world.
180. It is not an easy task to fulfil the needs of a moderate nation more so in the context of a multi-racial country.
181. We have since independence been practicing the principle of moderation in our own mould.
182. Based on these fundamentals, we have succeeded in building a nation that is prosperous, peaceful and harmonious.
183. In this regard, we cannot deny that the civil servants are the backbone and pillar of the nation’s administration.
184. Thus, let us congratulate and thank the more than 1.6 million civil servants who have served the nation well.
185. To appreciate the contributions of civil servants, the Government agrees:
First: Provide benefit of salary adjustment equivalent to one annual increment according to grade, which will benefit 1.6 million civil servants with an allocation of RM1.1 billion;
Second: Improve 252 schemes of service which will benefit 406,000 civil servants;
Third: Set a minimum starting salary in the civil service at RM1,200 a month, which will benefit 60,000 civil servants;
Fourth: Set the minimum pension rate at RM950 a month for pensioners with at least 25 years of service, which will benefit almost 50,000 pensioners; and
Fifth: Offer permanent post to contract of service officers who have at least 15 years of service. This will benefit 43,000 contract officers.
186. All these measures will be implemented effective from 1 July 2016 with a total allocation of RM1.4 billion.
187. To fulfil the pledge of reducing the cost of living for the rakyat, BR1M will be continued.
188. I know that there are parties who feel that BR1M should not be continued. However, from feedback that I have received, BR1M recipients appreciates the Government’s concern for it has somewhat helped them to reduce the cost of living.
189. In line with the Barisan Nasional Government’s pledge, I am pleased to announce that BR1M will be increased in 2016 as follows:
First: A new category will be introduced for all participants in the e-Kasih database, with monthly income below RM1,000, who will now receive BR1M of RM1,050;
Second: For households with monthly income of RM3,000 and below, BR1M will be increased from RM950 to RM1,000;
Third: For households with monthly income between RM3,001 and RM4,000, BR1M will be raised from RM750 to RM800;
Fourth: The Bereavement Scheme of RM1,000 will be continued;
Fifth: For single individuals aged 21 and above with monthly income not exceeding RM2,000, the assistance will be increased from RM350 to RM400.
190. In aggregate, BR1M assistance is expected to benefit 4.7 million households and 2.7 million single individuals with an allocation of RM5.9 billion.
191. In 11MP, I have mentioned about B40 and its definition. In this Budget, the Government will focus on another major group known as M40.
192. Statistically, M40 denotes households with monthly income ranging between RM3,860 and RM8,320. However, this definition of M40 will be further reviewed from time to time.
193. In this respect, I am pleased to announce:
First: The tax relief for each child below 18 years of age is increased from RM1,000 to RM2,000 from year of assessment 2016;
Second: The tax relief for individual taxpayer whose spouse has no income is increased from RM3,000 to RM4,000;
Third: Currently, individual taxpayers are given tax relief up to RM5,000 per year for medical treatment and care of parents who are ill.
The Government views positively the attitude of children who take care of the welfare of their parents and encourages strengthening of the family institution.
For the first time, tax relief for children who provide for their parents is given total tax relief of RM1,500 for the mother and RM1,500 for the father.
The relief is subject to the condition that each parent does not have income exceeding RM2,000 a month and must be 60 years and above.
Fourth: Increase the tax relief from RM6,000 to RM8,000 for each child above the age of 18 years who is studying at local or foreign institutions of higher learning, from year of assessment 2016.
Fifth: Increase the tax relief from RM6,000 to RM8,000 for disabled child above the age of 18 years who is studying at local or foreign institutions of higher learning, from year of assessment 2016.
The existing tax relief for parents with a disabled child is RM6,000. This means that if the disabled child continues his or her education in local or foreign institutions, the total relief allowable is RM14,000.
194. In addition to enable more employees to benefit from Social Security Organisation (SOCSO), the eligibility for mandatory contribution is increased from a monthly salary of RM3,000 to RM4,000. This adjustment will benefit 500,000 employees. Upon the death of the contributor, during the term of employment, the next of kin will receive a monthly payment of up to 90% of his last drawn monthly salary.
195. For decades, the Barisan Nasional Government has been shouldering the mandate and trust of the rakyat. This Government has continuously fulfilled and implemented its promises. This is a testament that the ruling Government has clear vision and direction.
196. More importantly, we continue to receive recognition from credible international agencies, such as Fitch Ratings, Moody’s and Standard & Poor’s, which have given an accurate assessment regarding the current state and management of the economy.
197. Over the years, we have achieved several successes. The latest was Malaysia’s ranking in the Global Competitiveness Report 2015 – 2016 by World Economic Forum where the nation improved two notches to 18th position out of 140 major economies.
198. To the rakyat, do not be worried. Have faith. This is a Government which you can rely on your future.
199. In whatever situation, my fellow colleagues and I will continue the nation’s economic plans, prioritising and giving importance to the well-being of the rakyat.
200. In essence, for this Government, the rakyat is everything. In this regard, I would like to announce effective from 1 July 2016, the national minimum wage will be increased from RM900 to RM1,000 per month for Peninsular Malaysia and from RM800 to RM920 for Sabah, Sarawak and the Federal Territory of Labuan. The new minimum wage will be implemented in all sectors except for domestic services or domestic maids.
201. Notwithstanding this, to reduce the burden of rising cost of living, the Government agrees to provide a special assistance of RM500 to all civil servants.
202. For the 700,000 Government pensioners, a special payment of RM250 will be provided. Both payments totalling almost RM1 billion will be made in January 2016.

Mr. Speaker Sir,

I beg to propose.

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