BUDGET FOR THE GOOD OF ALL M’SIANS

KUALA LUMPUR: The government yesterday tabled Budget 2009 aimed at the well-being of all the people with the focus on reducing the burden of higher costs of fuel by extending the social safety net, increasing disposable income and improving public transportation.

In a budget regarded as most people-friendly and which did not disregard the need of the business sector to address global challenges, Datuk Seri Abdullah Ahmad Badawi was generous enough to give a one-month bonus to about one million civil servants who did not enjoy it in 2007 following a salary adjustment in July of that year.

The prime minister, in tabling in the Dewan Rakyat the budget which carried the theme “A Caring Government”, included various incentives and tax exemptions for private sector employees, low-income people and the poor.

Citing economic growth of 5.7 per cent this year and 5.4 per cent in 2009, Abdullah, who is also the Finance Minister, proposed a budget totalling RM207.9 billion, of which RM154.2 is for operating expenditure and RM53.7 billion for development.

In a budget focused on the three strategies of ensuring the well-being of Malaysians, developing quality human capital, and strengthening the nation’s resilience, Abdullah proposed an extension of the social safety net to encompass 110,000 households – more than double the existing 54,000 – and involving an allocation of RM500 million.

“This budget demonstrates that the government is responsive to the concerns of the people and has taken measures to lighten the burden of all Malaysians, particularly the lower income group,” he said. Abdullah said that in appreciation of the contributions of pensioners and their need to cope with a higher cost of living, the government would give a minimum pension of RM720 per month to pensioners who had served at least 25 years upon retirement, thus benefiting 75,000 pensioners and those receiving derivative pensions.

The increase in the pension would be effective from Jan 1 next year and involved an additional allocation of RM140 million for 2009. As for 1.1 million households from the low-income group which consume less than RM20 of electricity per month, they would not have to pay for the utility from Oct 1 this year to the end of next year.

“The government will bear the cost of such bills, amounting to RM170 million, for the period,” he said. Abdullah, in concluding his 90-minute budget speech, emphasised that the government had come up with practical measures to help the people deal with tough conditions, including a high inflation rate, while the Opposition only made promises to become popular.

“The Barisan Nasional (BN) government will continue to manage the economy responsibly. The Opposition, on the other hand, continues to make populist claims which, if implemented, would undermine the government’s financial position and bequeath a bankrupt nation to the next generation,” he said. The prime minister said the government empathised with the difficulties faced by the lower income group, arising from the higher cost of living, and 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.

With this increase, the number of eligible recipients is expected to more than double, from 54,000 to 110,000, with the inclusive number of senior citizens also going up, from 14,000 to 40,000.

Disabled people unable to work would be given a monthly allowance of RM150 while the allowance for disabled students in special education schools would be increased from RM50 to RM150. The teaching assistants in these schools would be provided incentive payments of RM200 per month. The plight of the poor continued to have the attention of the government which had various programmes to raise their living standard with the objective of eradicating hardcore poverty by 2010.

The programmes, including improving basic amenities such as electricity, water and rural roads, also encompassed the poor in Sabah and Sarawak, and the two states would be allocated RM580 million and RM420 million, respectively, for the purpose. For the middle-income group, which also feels the impact of inflation, they can find relief in the government’s proposal for the current tax rebate of RM350 per person to be increased to RM400 for those with a taxable income of RM35,000 and below. With this increase, some 100,000 tax payers would be out of the tax net.

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

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. 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.

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.

The need to have an efficient public transportation system has received the government’s attention and it 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 greater frequency of services, is required,” said Abdullah who recently experienced for himself the condition of public transportation in the capital city.

Some RM35 billion would be expended between next year and 2014 to enhance the capacity of existing rail services, build new tracks, increase the number of buses, as well as provide better infrastructure facilities, he said.

Besides improving the transportation system, the government seeks to reduce the operating costs of the 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 said RM1.8 billion was provided to increase basic amenities and infrastructure in rural areas to enhance the quality of life of the rural community. He said the government would intensify efforts to further develop Sabah and Sarawak, with a total allocation of RM6.3 billion for various infrastructure projects in the two states, including the construction of roads to benefit more than 600,000 people in the two states. A sum of RM13.7 billion has been allocated to enhance health facilities and provide equipment, increase supply of medicines, develop human resources, intensify research and enforcement activities as well as build more hospitals, clinics and quarters. To retain the services of medical specialists in the public sector, the incentive allowance for medical specialists would be increased, this involving 3,800 specialists with an additional expenditure of RM26 million. The government would increase incentive payments for the flying medical teams in Sabah and Sarawak. For medical assistants, the increase is from RM20 to RM30 per return trip and for nurses from RM15 to RM30. In the effort to encourage a healthy lifestyle and curb social problems due to smoking, especially among youngsters and students, the government has proposed that excise duty on cigarettes be increased by three sen from 15 sen to 18 sen per stick. With this, the duty for a 20-stick pack of cigarettes is now increased by 60 sen. The development of quality human capital is the second strategy of Budget 2009, involving various training and skills programmes. Abdullah said RM47.7 billion or 23 per cent of the budget had been allocated for education and training towards creating a pool of trained and competitive work force. A sum of RM2.4 billion has been allocated to enhance facilities as well as undertake training and skills programmes. Of this, RM150 million is to upgrade 13 existing polytechnics as well as 15 community colleges and their branches. To enhance human capital in the health services, the government has allocated RM70 million to train 5,600 nurses besides offering opportunities to graduates in related science courses to pursue a career in nursing. The Education Ministry has been allocated RM31 billion to provide educational facilities to benefit 5.8 million students, with the programmes to improve education quality involving an increase in teaching manpower and the construction of almost 200 new schools. As for public safety, Budget 2009 has allocated RM5.4 billion to enhance the capacity of the Royal Malaysia Police through the construction of new headquarters, police stations and police posts nationwide. Between 2008 and 2010, some 22,000 constables and 3,000 inspectors would be recruited. In addition, the special incentive allowance for police personnel would be increased from RM100 to RM200 per month effective Jan 1 next year. – Bernama