KUALA LUMPUR: The tabling of Budget 2023 totalling RM388.1 billion is an effort to support economic growth so that the spillover benefits can be enjoyed by the people, Prime Minister Datuk Seri Anwar Ibrahim, who is also Finance Minister said.
He said this would be achieved through the 12 initiatives based on three objectives namely driving an inclusive and sustainable economy, institutional reform and governance to restore confidence, and social justice to reduce imbalance.
The objectives are ensuring fiscal sustainability; meeting the economic needs of the people; facing disaster; luring high-impact investment; public sector reforms; empowering public-private partnership; prioritising digital agenda; strengthening roles of agencies and government-linked companies; eradicating hardcore poverty; minimising cost of living; ensuring racial harmony and unity; and providing quality basic amenities.
As such, Anwar said the government has no plan to (re)introduce a broad-based consumption tax such as the goods and services tax (GST).
“In time when most people are still struggling, food inflation reaches more than five percent, wage rates are still low, it is obvious that now is not the right time to introduce and implement it,” he said when tabling the national budget which comprises RM289.1 billion for operating expenditure and RM99 billion for developing expenditure including RM2 billion for contingency savings.
Instead, he said the government plans to introduce a luxury goods tax starting this year involving, among others, luxury watches and other expensive fashion items.
Expressing support for the Generational Endgame effort, Anwar said the government plans to impose an excise duty on liquid or gel products containing nicotine used for electronic cigarettes or vapes, with half of the excise duty revenue to be returned to the Ministry of Health to improve health service quality.
To help hawkers and petty traders, he said a total of RM50 million has been set aside to build and upgrade 3,000 stalls and kiosks in focal locations across the country.
Anwar also touched on the preparation for disaster which involves an allocation of RM150 million to the National Disaster Management Agency (NADMA) for asset requirements, warning systems and disaster assistance to victims.
A total of RM50 million has also been allocated to the Malaysian Armed Forces, the Malaysian Fire and Rescue Department (JPBM), the Malaysian Volunteers Department (Rela) for the provision of equipment and assets, and RM20 million under the Caring Community Organisation Grant for 2,000 resident associations to deal with disasters.
As waqf is a mechanism for universal well-being, Anwar said the government has received a private commitment to create a MADANI Waqf worth RM1.0 billion involving assets such as land, mosques, buildings, health and education facilities for the benefit of the poor, low-income and other vulnerable groups.
The Prime Minister also said the government also aims to complete repairs for 400 dilapidated clinics and 380 dilapidated schools nationwide with an allocation of RM1.2 billion.
“It is unacceptable that the people still have to deal with the issue of dilapidated schools and clinics. I do not want this to continue...This needs to be resolved immediately this year,” he said.
Anwar said the government is also setting aside RM2.7 billion to maintain and upgrade federal roads, and a total of RM1.5 billion to upgrade and build new road in the interior and rural areas.
Meanwhile, he said the government will continue to encourage the private sector to employ workers at a higher value and younger people to improve their ability and skills to earn a more meaningful salary.
He said this would, among others, be provided through the provision of incentives up to RM600 per month for three months by the Social Security Organisation (Socso) to employers to hire those from vulnerable groups, like persons with disabilities (PwD), ex-convicts, homeless people and the hardcore unemployed.
Anwar said that in a bid to help address unemployment among youth, government-linked companies will offer 35,000 job opportunities to school leavers and graduates.
Anwar said the government will also speed up the implementation of the National Digital Network project (JENDELA) as a national effort to provide internet network facilities.
As such, he said the government has prepared RM725 million in allocations this year for digital connectivity in 47 industrial areas and over 3,700 schools.
The Prime Minister said the government will also will focus on initiatives to eradicate poverty and the suffering of 130,000 people categorised as hardcore poor, by providing immediate assistance and taking steps to ensure they will no longer remain in that category.
He said the government will carry out the People’s Income Initiative (IPR) programmes and therefore, RM750 million has been allocated to the Ministry of Economy for the year 2023, to carry out the initiatives.
In order to minimise the people’s burden from the rising cost of living, Anwar said the the government is providing up to RM64 billion in subsidies, assistance and incentives for this year.
“The majority of this allocation is to minimise the cost of living through price control of goods, financial assistance and providing most services to the people,” he said.
On Rahmah Cash Aid programme, Anwar said hardcore poor families are entitled for a maximum of RM3,100 in that cash aid, while households earning less than RM2,500 entitled up to RM2,500 depending on the number of children.
“Overall, the Rahmah Cash Aid programme will help ease the burden of the people with almost nine million recipients to benefit from it, involving an allocation of almost RM8 billion,” he said.
Anwar said the government will also offer Rahmah Youth e-cash credit of RM200 to youths with an allocation of RM400 million.
The individual income tax rate for Malaysian residents will be reduced by two per cent for income bands of over RM35,000 to RM100,000 this year, he said.
The reduction is expected to provide around 2.4 million taxpayers with added disposable income of up to RM1,300, which will benefit the M40 group, while the tax rate for the high-income group will be increased by 0.5 to two per cent for tax bands of over RM100,000 to RM1 million.
Sabah and Sarawak continued to benefit greatly from Budget 2023 with allocations of RM6.5 billion and RM5.6 billion given respectively, which include the plans to develop towns bordering Kalimantan, Indonesia, such as Kalabakan in Sabah and Ba’kelalan in Sarawak, involving costs of RM1 billion.
More than RM2.5 billion is allocated to implement projects involving public infrastructure in the two states, such as road and street lighting as well as water and electricity supply projects.
Anwar said the government is committed to continuing and expediting the implementation of the Pan Borneo Sabah Highway and the Sarawak-Sabah Link Road which is estimated to involve a total cost of RM20 billion with a distance of more than 1,000 kilometers.
For the wellbeing of the people in the interior of Sabah and Sarawak, the government will build more clinics, banks and mobile courts with a total allocation of RM30 million, he said.
Anwar said the government would also provide RM209 million to subsidise air transport for the benefit of the people in the interior of Sabah and Sarawak.
The Prime Minister said the Ministry of Education continued to receive the highest allocation under Budget 2023 with RM55.2 billion, compared to RM52.6 billion in 2022.
He said a total of RM2.3 billion was set aside to ensure the best infrastructure and learning facilities in all schools for children, including an allocation of RM920 million for buildings and infrastructure in 380 dilapidated schools, especially in Sabah and Sarawak.
In a bid to cover the cost of providing nutritious food to students, the rate of cooked meals for the Supplementary Meal Plan (RMT) has been increased from RM625 million to RM777 million for the benefit of 700,000 students.
Anwar said the government has also agreed to provide a 20 per cent discount on National Higher Education Fund Corporation (PTPTN) loan repayments for three months, starting March 1.
In order to ease the financial burden of affected borrowers, the government also agreed to defer repayment for borrowers with a monthly income of RM1,800 and below, for a period of six months.
“The loan deferment application can be made from March 1, 2023,” he said.
Anwar said the government would also introduce a Civil Medical Scheme, specifically for the poor to get health treatment at private clinics and general practitioners (GPs) as implemented by the Selangor state government, with an allocation of RM120 million.
“The government also proposes that welfare hospitals that are registered as a company limited by guarantee (CLBG) be given income tax exemptions equal to the amount spent on welfare.
“The donors will also get a tax deduction of up to 10 per cent,“ he said.
To encourage more self-employed individuals contribute to the EPF, Anwar said the government will increase the value of the i-Saraan matching contribution to RM300 compared to RM250 previously, involving a RM30 million allocation with over 100,00 contributors benefiting.
He said the government also agreed to contribute RM500 to Employees Provident Fund (EPF) members aged between 40 and 54 who have less than RM10,000 in their Account 1.
The programme will benefit two million EPF members involving an allocation of almost RM1 billion.
This is the first budget to be tabled by the Unity Government led by Anwar. The previous government under Prime Minister Datuk Seri Ismai Sabri Yaakob had tabled Budget 2023 totalling RM372.3 billion in October last year but Parliament was dissolved for the 15th general election before it could be debated and passed. - Bernama
