BN ELECTION BUDGET 2012 REVEALED



Najib, who is expected to call snap polls within months, also pledged to maintain subsidies on key consumer items and introduce various tax breaks intended to spur domestic demand as a hedge against a feared export slowdown.

The prime minister told parliament the cash handouts would include a one-off payment of 500 ringgit to lower-income families and a bonus for the country's 1.3 million civil servants equal to half their monthly salaries.

He called the payments to the poor "an unprecedented measure" to help Malaysians cope with rising world prices of food, fuel and other essentials.

The budget is likely the last before Najib calls pivotal parliamentary elections.

A once-insignificant opposition scored historic gains in 2008 polls that saw the long-ruling Barisan Nasional coalition lose its two-thirds majority for the first time, and Najib has battled lately to win back voters.

"In an environment of global uncertainties, the strong support of the people is mandatory for us to become developed and prosper as a nation," Najib, who is also finance minister, told parliament.

With inflation around two-year highs of 3.3 percent in August, cost-of-living concerns loom large with voters.

Opposition Leader Anwar Ibrahim, a former finance minister, dismissed the handouts as "clearly an election ploy".

"You promise everybody everything on earth, it's completely irresponsible," he said.

Najib's budget promised to maintain subsidies on fuel and food items that his government had earlier moved to scale back in a deficit-reduction drive.

The subsidy cuts had caused a further spike in costs of transport and essential commodities that had already risen along with surging world prices.

Inflation fears have been compounded by worry that exports -- the economy's driving force -- could be hit by the US and European economic woes.

Najib said government workers would get larger-than-usual pay rises, all fees in public schools would be abolished and the government would adjust property transaction taxes in a bid to curb market speculation.

Various tax breaks and other incentives would be extended in a range of industries to stoke both domestic and foreign investment, he added.

Malaysia's economy grew 7.2 percent in 2010 but slowed to 4.0 percent in the second quarter of this year.

The budget maintains an earlier rough government estimate of 5 to 6 percent growth in 2012.

The budget acknowledged Southeast Asia's third-largest economy faced external challenges and forecast export growth slowing to 6.8 percent in 2011 and 6 percent next year. Growth had surged by 15.6 percent in 2010.

Despite the handouts, Najib forecast a 4.7 percent budget deficit in 2012, down from this year's 5.4 percent target.

The ruling coalition has governed Muslim-majority Malaysia since independence in 1957, but the opposition alliance has capitalised recently on concerns over corruption, the economy, and authoritarian rule.

Last month, Najib promised to scrap draconian laws often criticised as tools of repression in a gesture widely seen as aimed at voters.

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BUT WHAT THE BN CABINET SAYS...
Home Minister Datuk Seri Hishammuddin Tun Hussein

> It is timely that the Budget has given emphasis to improve and modernise the police force in light of the pending abolition of the Internal Security Act.

Tourism Minister Datuk Seri Dr Ng Yen Yen

> It is a comprehens ive Budget for the lower income group and women, particularly for mothers. The incentives will help ease the schooling pressure of children faced by parents.

Women and Community Developme nt Minister Datuk Seri Shahrizat Abdul Jalil

> It is a historic Budget and it shows the commitment of the Government to assist the target group such as women, disabled and senior citizens.

Minister in Prime Minister's Department and MIC President Datuk G Palanivel
> It is a historic Budget that has taken the lower-income and middle-income groups into considerat ion. It is a People First Performance Now Budget that will benefit the most deserving. I am also glad that much emphasis has been given to education in this Budget.

Housing and Local Government Minister Datuk Chor Chee Heung

> This is the most inclusive Budget I have seen since becoming an MP in 1990. The various types of housing schemes to make housing accessible to the lower income groups is a testimony of this inclusiveness.

Transport Minister Datuk Seri Kong Cho Ha

> It is a caring Budget. It will help the poor in particularly to cope with the rising cost of living.

Energy, Green Technolo gy and Water Minister Datuk Seri Peter Chin

> The full exemption of import duty and excise duty on hybrid cars and electric cars is good because it is in line with our green campaign. Proton is coming up with its own hybrid car so it would be able to compete on that playing field as well as in terms of pricing.

Deputy Agriculture and Agro-based Industries Minister Chua Tee Yong

> The Government is committed to increasing food productivity by allocating RM1.1bitlo develop the agriculture sector, including the extension of the contra ct farming programme.