Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz announced on Friday (Oct 7) that RM372.3 billion will be set aside for Budget 2023 versus last year’s RM332.1 billion allocated in the previous budget.
In tabling Budget 2023, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said the government has allocated RM15.bil for the Higher Education Ministry and RM6.7bil for various Technical and Vocational Education and Training (TVET) activities.
Budget 2023: Income tax cut by 2% for RM50,000-RM100,000 taxable range
The personal taxation rate will be reduced by 2% on taxable income ranging from RM50,000 to RM100,000 for domiciled individuals.
In tabling Budget 2023 in Parliament on Friday (Oct 7), Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said for the taxable income range RM50,001 to RM70,000, the rate will be reduced from 13% to 11%.
[LIVE] Tabling of 2023 Budget in Parliament
[LIVE] Special programme on 2023 Budget with former finance minister II Datuk Seri Johari Abdul Ghani and PKR deputy president Rafizi Ramli.
PETALING JAYA: Finance Minister Tengku Zafrul Aziz has tabled Budget 2023, announcing an allocation of RM372.3 billion.
This represents a RM40.2 billion increase compared to the RM332.1 billion allocated for 2022.
Around RM272.3 billion has been allocated for operational expenditure and RM95 billion for development.
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Here are the highlights of Budget 2023:
Education
RM55.6 billion allocated for education, the biggest in the budget for a ministry.
RM825 million in early school aid for students, with students receiving RM150 regardless of their parents’ incomes.
RM777 million for supplementary food programme (RMT), benefiting 800,000 students and 7,300 canteen operators.
RM2.3 billion to ensure students have a conducive and safe learning environment.
RM1.1 billion to repair and maintain all schools, including vernacular and religious schools.
RM430 million to construct five new schools in Sabah, Sarawak, Terengganu, Cyberjaya and Selangor.
RM20 million to improve facilities in special needs schools.
RM188 million to set up 10 Kemas daycare centres.
Development
RM1.5 billion for sustainable development.
RM562 million to implement the Sabo dam project.
RM510 million to improve road infrastructure to Pengerang.
Pan Borneo Highway to be completed by 2024.
RM11.4 billion for maintenance and repair of existing government buildings.
RM5.2 billion for maintenance of state roads.
RM150 million for the development of border towns near Thailand and Kalimantan.
RM3.7 billion for small and medium projects across the nation.
RM500 million on G1-G4 infrastructure projects.
Social Welfare
In total, Putrajaya will spend RM10 billion in welfare and Bantuan Keluarga Malaysia (BKM) aid.
RM2.5 billion in welfare aid benefiting 450,000 households.
RM2,500 in BKM aid for households earning less than RM2,500 monthly.
Up to RM1,250 BKM aid for singles and RM3,000 for single parents.
One-off RM500 incentive for female BKM recipients who give birth in 2023.
RM7.8 billion for BKM which will benefit 8.7 million people.
RM1 billion in welfare aid for the elderly.
RM1.2 billion to support disabled people to be financially independent.
RM10 million in e-hailing vouchers for the disabled.
RM8 million for social support centres.
RM734 million for MySalam programme. This will benefit 1.5 million people from the B40 group.
Voluntary Employees Provident Fund (EPF) contributions raised from RM60,000 to RM100,000 a year.
RM21 million in grants for operators of welfare homes.
Limits for Amanah Saham Bumiputera (ASB) and ASB2 savings to increase to RM300,000.
Government to provide incentives to establish more daycare centres for the disabled.
RM120 million for Kasih Suri Keluarga Malaysia programme, benefiting 200,000 housewives.
Security
RM431 million to procure new assets for the police.
RM42 million to upgrade police quarters.
RM118 million for the maintenance of armed forces homes.
RM28 million to upgrade prison staff quarters.
RM73 million to enhance cybersecurity.
The government will set up a national scam response centre.
Health
Total of RM36.1 billion allocated for the health ministry.
RM11 million for subsidies for mammograms and cervical cancer screening.
RM20 million to promote Malaysia as a medical tourism destination.
RM4.9 billion for public healthcare.
RM420 million to repair dilapidated hospitals and clinics.
RM1.8 billion to purchase new equipment for hospitals and clinics.
The government to set up a mental health centre of excellence.
RM10 million to purchase 3D printing machines for dental health services.
Allocations to treat rare diseases increased to RM25 million.
RM80 million for Socso health screening programme.
RM15 million for Agenda Nasional Malaysia Sihat programme to encourage healthier lifestyles.
RM80 million for the PEKA B40 programme.
Import duty and sales tax exemptions for nicotine replacement therapy products.
Economy
RM235 million to support the development of female entrepreneurs.
RM50 million for young trader scheme under Bank Simpanan Nasional.
2% reduction in income tax of micro SME operators.
One-off RM1 billion grant to all registered MSMEs and taxi drivers. To benefit one million recipients.
RM45 billion Semarak Niaga funds for entrepreneurs.
RM10 billion in funds from Bank Negara Malaysia (BNM) to automate and digitise SMEs.
RM200 million to boost income and productivity of smallholders.
GLCs and GLICs to invest up to RM50 billion in 2023.
Government-linked companies (GLCs) and government-linked investment companies (GLICs) to invest RM50 billion in 2023, including RM45 billion in direct domestic investments.
The government will provide incentives for multinational companies to establish operations in Malaysia.
RM100 million to support development of local technology companies.
RM10 million in matching grants allocated to help SMEs.
RM800 million to provide RM100 e-wallet credit for 8 million people in the M40.
Petronas will contribute RM2 billion to the National Trust Fund (KWAN).
RM1.4 billion to boost connectivity in the five main economic corridors.
Civil service
RM100 subsidy for civil servants for insurance coverage.
RM1.5 billion for RM100 increment for all civil servants between Grade 11 to Grade 56.
RM1.3 billion for one-off RM700 special aid for 1.3 million civil servants under Grade 56.
RM350 one-off aid for one million retired civil servants.
Aidilfitri aid for civil servants increased to RM600.
Special leave for over 500,000 teachers.
Higher education
RM15.1 billion allocated for the higher education ministry.
RM3.8 billion for scholarships and education loans.
RM6.6 billion for Bumiputera education loans.
RM6.7 billion for TVET training and education.
RM180 million to fund TVET training, benefitting 13,000 trainees.
Up to 20% discounts for PTPTN repayments from Nov 1 to April 30, 2023.
Environment
RM15 billion for flood mitigation initiatives.
RM2 billion to build retention ponds.
RM500 million to widen rivers in Kelantan.
RM3 billion for Green Technology Financing Scheme (GTFS).
RM150 million from Khazanah Nasional Berhad to support development of green projects.
RM165 million for Tenaga Nasional Berhad (TNB) to set up solar rooftops and EV charging stations.
Carbon tax to be introduced.
100 million trees to be planted by 2025.
The government will step up forest restoration projects.
RM100 million for ecological fiscal transfer (EFT).
RM36 million to support conservation of elephants and other endangered species.
RM216 million to clean rivers nationwide.
Job creation and community support
The MyStep programme will provide 50,000 jobs including 15,000 in the public sector and 35,000 in government-linked companies (GLCs).
RM750 million to upskill 800,000 workers.
RM100 million for Mitra to develop entrepreneurs.
Socso to provide incentives for employers to hire the disabled, Orang Asli, ex-convicts and women returning to work. The incentive worth up to RM750 a month will be given for three months per employee.
Socso will provide incentives for employers to hire jobless youths.
RM50 million to boost Bumiputera commercial property ownership.
RM20 million to set up new urban transformation centres (UTC).
RM11 million on mobile bank initiatives.
RM63 million for development of human capital.
RM50 million to support development of female contractors.
RM100 million for Khazanah’s Yayasan Hasanah to conduct various community initiatives.
Sabah and Sarawak
Total RM11.7 billion allocated for Sabah and Sarawak.
RM1.2 billion to improve the infrastructure in dilapidated schools in Sabah and Sarawak.
RM209 million to subsidise air travel to rural areas in Sabah and Sarawak.
RM1.5 billion to improve transport infrastructure in Sabah and Sarawak.
RM100 million to improve the water supply system in Sarawak.
RM250 million for expansion of the Sapangar Bay Container Port (SBCP).
Taxes
Personal income tax reduced by 2% for those earning between RM50,001 to RM100,000.
This will benefit over one million people in the M40.
Income tax exemptions of up to RM3,000 for Tadika and daycare fees.
Tax incentives to attract investors.
Government reiterates implementation of Tax Identification Number to widen tax base.
Tax incentives for local pharmaceutical companies will be extended.
Tax incentives and RM50 million to support development of aerospace components.
The government will provide special incentives for investors in the chemical and petrol chemical industry.
Import duties and sales tax exemptions for the purchase of film equipment.
Tax incentives for NGOs involved in sports at the grassroots level.
Tax incentives for green initiatives extended to Dec 31, 2025.
100% income tax exemption for manufacturers of EV charging parts.
Additional tax deductions for employers who hire former residents of juvenile institutions.
Government to introduce qualified domestic minimum top-up tax.
Tourism
RM200 million to promote tourism recovery.
RM90 million in grants to promote tourism activities.
New chartered flights to and from East Asia and the Middle East.
RM10 million to promote eco-tourism.
RM25 million in incentives to promote domestic tourism.
RM500 million in tourism financing from BNM.
RM10 million for the ThinkCity initiative in Kuala Lumpur.
Arts and Culture
RM50 million to support the local film industry.
RM102 million to support local artists.
RM5 million to strengthen national language programmes.
RM10 million to support preservation of local languages and cultures.
Commodities
RM200 million to subsidise the logistic cost for the distribution of essential goods.
The government will hold Keluarga Malaysia sales offering essential items at more affordable prices.
The government will continue measures to combat the illicit cigarette trade.
RM20 million in matching grants to support development of local products.
RM10 million to support the made in Malaysia campaign.
RM92 million for development of the halal industry.
Approved permit fees for import of EVs extended to Dec 31 next year.
RM256 million in monsoon aid for rubber smallholders.
Agriculture
RM1.8 billion in subsidies for farmers and fishermen.
RM228 million in aid for padi farmers. This will benefit 240,000 people.
The government will introduce an agriculture protection scheme.
RM1 billion to fund agrofood programmes.
RM56 million to support sustainable farming.
RM315 million for rubber planting programmes.
RM40 million to encourage smallholders to diversify their crops.
RM70 million to support the Malaysian Sustainable Palm Oil (MSPO) certification programme.
The government will support automation initiatives in the plantation sector.
Defence
RM17.4 billion for the defence ministry, including RM4 billion for the purchase of new military assets.
RM485 million for the maintenance of all MMEA ships and boats.
RM330 million for EV infrastructure.
Transport
RM180 million to improve bus services in Melaka, Kedah, Kota Kinabalu and Kuching.
Continuation of My50 RapidKL monthly pass to benefit 180,000 users.
RM16.5 billion for major transport infrastructure projects.
RM50.2 billion for the MRT3 project.
RM1 billion for the maritime and logistics industry.
Housing
Stamp duty discounts of up to 75% for houses worth between RM500,000 to RM1 million.
RM10 stamp duty for properties transferred between family members.
RM367 million to build people’s housing projects (PPRs), to benefit 12,400 new residents.
RM3 billion for housing credit guarantees.
RM40 electric bill subsidy to be extended.
Digital connectivity
Phase 2 of the Jendela project to involve RM8 billion in investments, including from industry players.
RM700 million allocated for Jendela to expand digital connectivity in 47 industrial areas and 3,700 schools.
Digital Nasional Berhad (DNB) to spend RM1.3 billion in infrastructure development to widen 5G internet coverage nationwide.
Youth and sports
RM305 million in loans for youths to start businesses.
The government will introduce a special internet package for youths at RM30 for three months.
RM400 million to continue the e-Pemula scheme, which will benefit two million youths aged 18 to 20.
The government will bear the costs of e-hailing, taxi, and motorcycle licences for youths.
RM145 million to improve sporting infrastructure nationwide.
RM154 million to develop the local sporting ecosystem.
RM20 million to develop a drag race circuit.
RM13 million to develop e-sports.
RM12 million to support disabled athletes.
Rural communities
RM305 million for the Orang Asli community.
RM2.6 billion for Felda, Felcra and Risda.
RM472 million to improve rural electricity infrastructure.
RM54 million to build 85 new bridges in rural areas.
Disaster management
Additional RM400 million in allocation for the National Disaster Management Agency (Nadma) to prepare for year-end floods.
RM100 million allocated for the national disaster relief fund.
RM20 million in grants for community associations to assist in natural disasters.
Others
RM1.5 billion for Islamic development.
RM150 million for the maintenance and repairs for educational facilities under Jakim.
RM364 million for research and development for higher education as well as science, technology and innovation ministry.
RM30 million to improve I-Saraan programme that will benefit 100,000 people.
All self-employed people will be required to contribute to Socso from next year onwards.
The government will introduce e-invoice similar to initiatives in France and Brazil.
The government will table a consumer credit bill in the second quarter of 2023.
Inflation likely to peak in the third quarter of this year.
PETALING JAYA: One could not help but notice that Bank Negara governor repeatedly emphasised in her latest speech – three times to be exact – that the Malaysian economy is no longer in a crisis.
Tan Sri Nor Shamsiah Mohd Yunus highlighted that the economic recovery is well underway, although she acknowledged that the future ahead will be “challenging, highly uncertain and unpredictable.”
Interestingly, in the same speech at the Khazanah Megatrends Forum 2022 yesterday, Nor Shamsiah warned that Malaysia could be left behind if no reforms are done.
“As a country, we must now focus on strengthening our economic fundamentals, resilience and flexibility.
“Our neighbours within the region are actively pressing on with reform measures. We run the risk of being left behind if we do not act now,” she said.
Amid speculation that a recession is imminent, Nor Shamsiah advised Malaysians not to act in a manner that jeopardises the recovery and the confidence of investors, which in turn can create a “negative self-fulfilling cycle.”
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Commenting on the economy, Nor Shamsiah noted that Malaysia’s investment activity and prospects continue to be supported by the realisation of multi-year projects.
The country’s exports have also been recording double-digit growth since the start of 2021.
Nor Shamsiah also said that the labour market has shown strength.
“Wages in both the manufacturing and services sectors have been increasing since the start of the year, at around 5% and 7%, respectively.
“Unemployment is now less than 4% and income prospects remain positive,” she said.
On price pressures, the central bank head said Malaysia’s inflation remains well anchored, with headline inflation averaging 3.1% year-to-date.
“It is largely supply-driven but we have also seen stronger demand with the reopening of the economy.
“That said, we project that inflation will peak in the third quarter of this year.
“In addition, the extent of upward pressures to inflation will remain partly contained by the existing price controls and the prevailing spare capacity in the economy,” she said.
Despite her optimistic view on the outlook, Nor Shamsiah acknowledged that rising geopolitical tensions and conflict, global inflationary pressures and extremely volatile financial markets will lead to slower growth in 2023.
However, she also pointed out that the fundamentals of the local economy and financial system are strong.
“The preemptive policy measures taken will help us to weather this storm,” she said.
With regard to the weakening ringgit against the US dollar, Nor Shamsiah said it is not a reflection of the state of the economy.
“The exchange rate is only one indicator among many.
“Like I said at the start, it is important to consider the strength and positive performance of the Malaysian economy.
“Growth is robust, the labour market is healthy and the financial system is resilient and continues to perform its role effectively,” she said.
Nor Shamsiah also noted that Malaysia has a strong external position with more foreign currency assets than foreign currency liabilities.
“Foreign currency borrowings only account for less than 3% of total federal government debt,” she said.
Between January and September 2022, the ringgit has depreciated by 10.2% against the US dollar.
The current depreciation of the ringgit is due to the strength of the US dollar.
Nor Shamsiah called upon corporate Malaysia to help maintain “orderly market conditions” by taking action that do not exacerbate the ringgit’s depreciation against the greenback.
“Bank Negara will ensure that our onshore foreign exchange market remains liquid, so businesses can be assured that all their foreign currency needs can be efficiently fulfilled.
“So there is no need to hoard or front-load US dollar purchases.
“Corporates and domestic financial institutions should also be prudent in managing their balance sheets.
“This includes to avoid creating new vulnerabilities, especially from foreign currency debt and financial imbalances, as well as hedging their risks appropriately,” she said.
As for businesses and investors that benefit from a ringgit depreciation, the central bank governor urged them to take advantage of the weaker ringgit.
“For example, for those in tourism and exports to increase production and capitalise on this opportunity, and for those with a global presence, to reinvest back home,” she added.
Khazanah Nasional managing director Datuk Amirul Feisal Wan Zahir, who also spoke at the Khazanah Megatrends Forum 2022, shared Nor Shamsiah’s views on reform initiatives.
He pointed out that Malaysia is still “too far down” the value chain of productive work and that growth has to be fully inclusive.
“Our past growth was based on foreign direct investments-driven, low-cost competitive manufacturing – this no longer serves at our current stage of development.
“Long term structural reforms are required – but these will require substantial resources.
“And future growth must not allow inequality to persist, it must be fully inclusive of all socio-economic classes, and fully include women – where structural norms have long impeded opportunities for this demographic,” he said.
Amirul also spoke on climate change, highlighting that there is much work to be done, globally and collectively.
“But this does not mean that all countries have the same work to do, the same amount of pain to bear, the same standards of accountability.
“There is nothing fair and equal about climate change,” he said.
He mentioned about the devastating floods in Pakistan, in which an area three times the size of the country of Portugal went under water, and yet Pakistan produces less than 1% of the global greenhouse gas emissions.
In order to meet critical climate goals, Amirul said the world needs to ensure a “just transition”, which is much more complex and nuanced than a common standard for all nations.
“Just six national entities are responsible for producing over 70% of the greenhouse gas already emitted in human history, namely the United States, the European Union, China, Russia, the United Kingdom and Japan.
“Malaysia’s contribution, as of 2020, has been a mere 0.37%.
“New ‘targets’ are not so easily attained by developing countries, who suffer the most from climate change, and yet historically have contributed the least to causing it,” he said.
Amirul also added that all businesses and organisations have an ethical duty to act immediately and must not just wait for regulations to be imposed.
“This is why Khazanah Nasional has already defined and adopted a Sustainability Framework which encompasses environmental, social and governance (ESG) standards.
“We have published these on our website to make them fully public, and they include carbon-neutral operations by 2023, net-zero emissions by 2050, 30% of board and senior leadership positions to be held by women by 2025 and ESG-linked key performance indicators for key leadership positions in our portfolio companies by 2023,” he said.
Repercussions of the US Federal Reserve's
aggressive interest rate hike cycle have emerged across the global
economy and in the US, as the US economy falls into technical recession
after two straight months of negative growth, final GDP data showed on
Thursday.
A toast: Xi and Li raising glasses during a reception at the Great Hall of the People in Beijing. — Reuters
AS the Communist Party of China prepares for its 20th National Congress in October, where President Xi Jinping is expected to secure a controversial third term as top leader, Asian Insider looks at his record over the last 10 years and what the future holds for him, the party and the country.
Last weekend, Twitter was abuzz with “news” that there had been a military coup in Beijing and President Xi Jinping was under house arrest.
The grist to the rumour mill: Hundreds of flights had been cancelled across the country, Xi had not been seen in public for a week, and a video showing a military convoy making its way into the capital city was being widely circulated.
Unsubstantiated claims and conspiracy theories about Chinese leaders’ fall and demise come and go with enough regularity to make the most seasoned China watchers roll their eyes every time one of them pops up on social media.
The 101-year-old Communist Party of China swept to power 73 years ago on Saturday, but it is still one of the world’s most opaque political parties.
As it gears up for its twice-a-decade congress in two weeks, where nearly 2,300 delegates will elect a new Central Committee made up of 370 or so leaders, it is keeping political pundits guessing over who might rise in the ranks to lead the country of 1.4 billion people.
The Politburo Standing Committee – the pinnacle of power with seven men – and the wider Politburo of 18 other leaders will be of particular interest to most.
But compounding the difficulty in making any predictions is President Xi Jinping’s track record of breaking norms – whether written or unwritten – and the cloak of secrecy that has only thickened under his rule.
Only two things appear to be certain for now: President Xi will secure a rare third five-year term as party and military chief during the week-long gathering. And there will be no apparent successor.
But who else might stand alongside Xi when the new team takes the stage a day after the conclave? Here are three possible scenarios:
Most conservativeTwo of the seven standing committee members will step down, in keeping with an unwritten retirement rule that requires Li Zhanshu, 72, and Han Zheng, 68, to relinquish their third-ranked and seventh-ranked seats.
The “seven up, eight down” rule sets at 67 the age limit for old and new members of the standing committee and the Politburo at the start of a new term. Politicians aged 68 or older are disqualified.
But the rule does not apply to Xi, 69, who is looking to seek a third term in office.
Conventional wisdom has it that Premier Li Keqiang, 67, will retain his second-ranked seat in the standing committee because he has not reached the retirement age. But he is constitutionally required to step down as premier in 2023 after two five-year terms and could take over Li Zhanshu’s role as head of Parliament.
Wang Yang, 67, who is chairman of Parliament’s top advisory body, is the frontrunner to succeed Li Keqiang as premier in 2023. As far as seniority goes, Wang should be next in line for the prime minister’s job.
Tradition also dictates that only those who have been vice-premiers and are capable of managing the economy can be appointed premier. Wang was vice-premier between 2013 and 2018, overseeing commerce, among other things.
Current standing committee members who have yet to reach retirement age could stay on. Zhao Leji, 65, currently ranked sixth, could take Wang’s fourth-ranked seat and become chairman of the advisory body in 2023.
Wang Huning, 67 in October, is expected to retain his fifth-ranked seat as the party’s top ideologist.
Party insiders have singled out Hu Chunhua, 59, and Ding Xuexiang, 60, as the two likely new faces in the standing committee.
Hu, currently the third-ranked vice-premier and who was thought to have been groomed for the top job during the leadership reshuffle at the last congress, is tipped to become executive vice-premier.
Ding, director of the party’s General Office, is the frontrunner among the President’s men to be promoted to the standing committee. He is Xi’s most trusted aide among the younger leaders.
Other aspirants are Propaganda Minister Huang Kunming, 64; Beijing party secretary Cai Qi, 66; Chongqing party boss Chen Min’er, 62; and Shanghai party secretary Li Qiang, 63.
But this scenario could well be too unimaginative for Xi, who has a penchant for departing from tradition and surprising pundits.
The surprise
In the second scenario, Premier Li will retire from the standing committee this year and as premier next year, according to several party insiders and observers.
Three other standing committee members will also step down: Li Zhanshu and Han – in accordance with the retirement rule – and Wang Huning, who was said to have indicated privately that he would like to retire earlier.
Only three of the seven standing committee members will retain their seats: President Xi, Wang Yang and Zhao.
The four other standing committee members will be newcomers and mostly the President’s men.
Regardless of whether Premier Li stays on or not, the number of standing committee members could be expanded to nine to accommodate more of the President’s allies and possibly a People’s Liberation Army (PLA) general for the first time since 1992 – a hint that China might be preparing itself for military conflict.
If so, the person who fits the bill is PLA Ground Force General Zhang Youxia, 72, one of two incumbent Central Military Commission vice-chairmen, and who has combat experience from the 1979 border conflict between China and Vietnam.Most boldIn this scenario, President Xi will be the only standing committee member to hold on to his seat – a clear sign of his iron grip on power.
This could be done if the unwritten retirement age rule is revised down instead of up.
“It will be ‘winner takes all’,” said Ho Pin, who runs Mirror Media Group, a Chinese-language publishing company in New York.
“There will still be norms, but no more factions,” said Ho, who correctly predicted the standing committee line-ups of the 16th to 19th party congresses from 2002 to 2017.
Factional balance of power has always been a major factor in the composition of the standing committee to keep the unity and stability of the party.
The current standing committee strikes a balance between Xi and his allies (Li Zhanshu and Zhao), former president Jiang Zemin’s “Shanghai Gang” (Han Zheng) and former leader Hu Jintao’s Communist Youth League faction (Li Keqiang and Wang Yang).
Even so, these factional lines are also not so clear-cut. Zhao, for instance, is also known as Jiang’s man, while Wang is also not as entrenched within the elite circles of the youth league.
Wang Huning is the exception as he was trusted by and has worked with all three leaders.
If Xi’s hold on power is as unwavering as it looks to be, this scenario could well pan out, and he will have free rein to fill the standing committee with younger allies, such as those born in the 1960s. — The Straits Times/ANN
