Budget 2009 - ForThe Well-being Of All Malaysians

WELL MALAYSIANS! HERE'S THE NEW BUDGET FOR US!


August 29, 2008 17:27 PM

Budget 2009 For The Well-being Of All Malaysians

KUALA LUMPUR, Aug 29 (Bernama) -- The government today tabled Budget 2009 which focuses on measures to maintain the well-being of Malaysians that has been enhanced over the last 51 years since independence, by seeking to strengthen the nation's economic resilience to mitigate the adverse impact of an increasingly challenging external environment.

"Today, as we face a global environment of higher prices and slower economic growth, I am confident, if we remain united, we shall overcome this challenge as well," said Prime Minister Datuk Seri Abdullah Ahmad Badawi when tabling in the Dewan Rakyat next year's budget carrying the theme of "A Caring Government".

The strategies formulated demonstrate that the government was responsive to the concerns of the people and had taken measures to lighten the burden of all Malaysians, particularly the lower income group, he said.

The approach taken was focused towards support and assistance, which not only improved the quality of life but also enabled all Malaysians to enhance their productivity, he added.

The budget was also in line with the medium-term plan as articulated in the National Mission and the Ninth Malaysia Plan (9MP) to further develop the nation towards Vision 2020.

Abdullah, who is also the Finance Minister, proposed for next year's budget an allocation of RM207.9 billion, of which RM154.2 billion was for operating expenditure and RM53.7 billion for development expenditure, and said the budget focused on the three specific strategies of ensuring the well-being of Malaysians, developing quality human capital, and strengthening the nation's resilience.

He said that in ensuring the well-being of the people, the government would ensure that all Malaysians would continue to benefit from the country's economic growth.

"The government will implement a broad range of measures to reduce the impact of the higher cost of living, particularly among the lower income group and the vulnerables," he said.

As in previous budgets, the government empathised with the difficulties faced by the lower income group, he said and announced that the government had raised the eligibility criteria for welfare assistance under the Welfare Department from a monthly household income of RM400 to RM720 for Peninsular Malaysia, RM830 for Sarawak and RM960 for Sabah.

Abdullah said the government recognised the contributions of pensioners towards the development of the country, and in assisting the lower income pensioners cope with the recent price increases, government pensioners who had served at least 25 years upon retirement would be given a pension of not less than RM720 per month from Jan 1 next year.

The prime minister said the government had always assisted victims of calamities, such as floods and fire, and would now set up a special fund of RM25 million to channel timely financial assistance to families deprived of their sources of income, particularly arising from accidents to breadwinners.

Efforts to eradicate poverty remains an important government agenda in Budget 2009. Abdullah said the government was confident that hardcore poverty would be eradicated by 2010.

He also said that the government would continue to implement programmes to enhance income, as well as provide skills and career development training under the "Skim Pembangunan Kesejahteraan Rakyat" programme.

Abdullah said the government proposed an allocation of RM220 million for the "Program Lonjakan Mega Luar Bandar" rural development programme being implemented in Pulau Banggi, Sabah, and Tanjung Gahai in Kuala Lipis, Pahang, which would benefit 13,300 households.

The provision of housing for the poor was being stepped up with the government proposing a RM50 million allocation to build 1,400 houses and repair 1,000.

Abdullah said priority would be given to senior citizens, the disabled and single parents with many dependents as well as victims of natural disasters.

He also said that hardcore poverty in Sabah and Sarawak was also being given attention in the budget. He said measures would continue to be taken to increase income and enhance the quality of life of Malaysians in the two states by improving basic amenities, such as electricity, water and rural roads.

For this, RM580 million and RM420 million were being allocated for Sabah and Sarawak, respectively, he said.

Abdullah also said that as part of the government's effort to further reduce the financial burden of the lower income group, households which incurred monthly electricity bills of RM20 or less would not have to pay for electricity for the period of Oct 1 2008 to the end of 2009.

A total of 1.1 million households would benefit from this measure which would cost the government RM170 million for the period, he added.

Abdullah said that realising that higher inflation rate had also affected the purchasing power of the lower middle-income group, the government proposed that the current tax rebate of RM350 per person be increased to RM400 for those with taxable income of RM35,000 and below. With this increase, some 100,000 tax payers would be out of the tax net, he added.

Additionally, to reduce the tax burden of individuals, especially those dependent on interest income from savings, the government proposed that all interest income for individuals be tax exempt.

To mitigate the impact of rising prices on consumers, the government proposed to reduce import duties on various consumer durables from between 10 per cent and 60 per cent to between five per cent and 30 per cent. These included blender, rice cooker, microwave oven and electric kettle.

Abdullah also said that the government would reduce the road tax on private passenger vehicles with diesel engines to be the same as those with petrol engines effective Sept 1 this year as, currently, private passenger vehicles with diesel engines owned by individuals and companies were subject to a higher road tax compared with those with petrol engines.

The prime minister said the primary strategy of Budget 2009 was to focus on measures to make employee welfare a priority. He said that to encourage the private sector to give employee welfare priority, the government proposed that the travel allowance for commuting to work provided by employers be given full tax deduction while the employees receiving such an allowance be given tax exemption of up to RM2,400 per year.

Furthermore, the government has proposed tax exemption for private sector employers who give their employees interest subsidies on loans for housing, motor vehicles and education limited to total loans of up to RM300,000 in a move to make employee welfare a priority in the private sector.

Abdullah said tax exemption was also proposed for employers who provided mobile phones for their staff and paid their telephone and Internet bills. It was also proposed that employers be given tax exemption for staff discounts of up to RM1,000 a year on company traded goods, he said.

He also said that the proposed tax exemption also covered staff discounts rendered by the company, such as private schools providing free education to children of their employees. It was also proposed that tax exemption be given for childcare allowance of up to RM2,400 per year.

Abdullah said the government proposed to extend the tax exemption on medical benefits by employers to include maternity expenses. In addition, he said, given the growing acceptance of traditional medicine, namely acupuncture and ayurvedic, the government also proposed an extension of tax exemption to cover such medical benefits.

The prime minister said that to assist civil servants with young children, the government proposed to raise from RM2,000 to RM3,000 from Jan 1 next year the eligibility criteria of monthly household income for those households provided with the RM180 monthly subsidy towards nursery fees.

He also said that the free return air fares to home states, between Peninsular Malaysia and Sabah and Sarawak, enjoyed by government servants once every two years to foster closer family ties would be provided every year from Jan 1 next year.

Abdullah said the government would continue to encourage greater utilisation of public transportation, in the context of improving the productivity and quality of life.

"I believe a more efficient, reliable and integrated public transportation, which provides seamless travel and greate frequency of services, is required," he said.

The prime minister said RM35 billion would be expended between 2009 and 2014 to further improve the efficiency of public transportation, which included projects to enhance the capacity of existing rail services, build new rail tracks, increase the number of buses, as well as provide better infrastructure facilities.

Besides increasing the number of RapidPenang buses to 350 next year, he said, the Light Rail Transit (LRT) system in the Klang Valley would be extended by 30 km, that is 15 km respectively for the Kelana Jaya and Ampang lines.

"Upon completion in 2011, the extensions are expected to benefit 2.6 million residents in the Subang Jaya-USJ and Kinrara-Puchong areas, compared with 1.9 million currently," he said.

Abdullah said a new LRT line would be built along a 42-km route from Kota Damansara to Cheras, with a capacity exceeding 300,000 passengers daily when completed in 2014.

He also said that Keretapi Tanah Melayu (KTM) Berhad commuter rail services would be upgraded through the rehabilitation of the existing 20 Electric Multiple Units (EMUs), which was expected to be completed next year, and the addition of 13 new units of EMUs by 2011.

The 7.5-km Sentul-Batu Caves rail track was under construction and was expected to be completed by 2010, he added.

To provide facilities for inter-urban taxis and buses from the northern region, a new integrated terminal would be built, he said, adding that the terminal would contribute towards further reducing traffic congestion in the heart of Kuala Lumpur.

Abdullah said the government would continue to help reduce the operating costs of public transport operators.

Besides the recent increase in the quota for diesel subsidy, the government would provide a soft loan facility of RM3 billion under the Public Transportation Fund, administered by Bank Pembangunan Malaysia Bhd, to finance the acquisition of buses and rail assets, he said.

He said the government also proposed to reduce toll charges by 50 per cent for all buses, except at border entry points, namely the Johor Causeway, Second Link and Bukit Kayu Hitam, for a period of two years from Sept 15 this year.

The government would provide compensation to toll operators for their loss of revenue, estimated at RM45 million per year, he added.

Abdullah said bus operators would also be given sales tax exemption on the purchase of locally assembled new buses and Accelerated Capital Allowance on the expenditure incurred while road tax would be reduced to RM20 a year for all bus and taxi operators, including rent-a-car and limousine operators.

To ensure that specific attention is given to efforts for overall development of the public transportation system, Abdullah said, the Public Land Transportation Commission would be established under the Prime Minister's Department to plan, integrate, regulate and improve the overall public transportation services. The commission was expected to commence operations by mid-2009.

Abdullah also said that the government would implement several agriculture programmes to ensure adequate food supply.

For this, he said, the government had provided RM5.6 billion under the National Food Security Policy for the period 2008 to 2010, among others to provide incentives to agriculture entrepreneurs to reduce pollution costs and encourage higher agriculture output.

An amount of RM300 million had been allocated in an effort to increase fish landings. Of the sum, RM180 million was in the form of cost-of-living allowance to fishermen and fishing boat owners as well as RM120 million as incentive for fish landings.

Abdullah said the government proposed that the expansion of chicken and duck farms be given Reinvestment Allowance of 60 per cent for a period of 15 years to help increase poultry output.

An allocation of RM475 million was to be provided in the form of agricultural inputs, fertilizers and pesticides to assist padi farmers, besides proposing that import duty on fertilizers and pesticides be abolished.