Rural areas are among the biggest beneficiaries of Budget 2012 with allocations for various upgrading and development projects.
The allocations are in line with the Government’s Rural Transformation Programme (RTP) aimed at turning rural areas into locations which will attract investments, economic activities and create employment, Prime Minister Datuk Seri Najib Tun Razak said.
He said this move was also aimed at encouraging members of the younger generation to move back and work in rural areas.
The Professional Services Fund will also be established to encourage lawyers, doctors and accountants to set up practice in rural areas.
Bank Simpanan Nasional (BSN) will appoint 5,000 agents in rural areas nationwide in the next three years to provide services such as savings and withdrawals, payment of bills as well as purchase of Premium Savings Certificates.
Najib also announced that the Government would provide an allocation of RM5bil to upgrade basic infrastructure, and this includes building a road network of 2,749km that would benefit 1.76 million rural folk.
Rural folk can also look forward to cleaner water supply and electricity with the Government allocating RM3.2bil for this purpose.
Out of this amount, RM2.1bil will go towards expanding clean water supply to 200,000 houses whilst RM1.1bil will be used to provide electricity to some 39,000 houses, mainly in Sabah and Sarawak.
The Government has allocated RM90mil to provide basic necessities and expand clean water supply projects for the orang asli.
The plans Najib announced for rural development:
> More professional services including banking to be made available in rural and remote areas.
> The establishment of more Rural Transformation Centres (RTCs) nationwide.
> RM5bil allocation to upgrade basic rural infrastructure.
> Some 29,000 Class F contractors, registered with the Contractor Service Centre, to benefit from the infrastructure projects.
> Some 100,000 people living in the interior of Sarawak to benefit from tanks provided for rainwater harvesting.
> RM20mil allocated to relocate orang asli families affected in the Sungai Ruil, Cameron Highlands, landslide to new housing areas.
> Water supply infrastructure Felda areas and estates.
2. RM300mil upgrade for HKL
The 141-year-old Hospital Kuala Lumpur (HKL) will be upgraded to become the country’s premier hospital with state-of-the-art equipment.
An allocation of RM300mil will be provided to upgrade the country’s oldest hospital, including building a new outpatient wing.
“This is to ensure the comfort of city residents,” Prime Minister Datuk Seri Najib Tun Razak said in his Budget 2012 speech yesterday.
He said RM15bil was being allocated for operating expenditure and RM1.8bil for development expenditure for the health services sector next year.
A hospital for women and children will be built in Kuala Lumpur through public-private partnership at a cost of RM700mil. Najib also said hospitals would be built and upgraded in Bera, Kuala Krai, Dungun, Sri Aman and Tuaran.
The maternity block in Hospital Putrajaya would also be upgraded. The Government would also upgrade 81 rural health clinics nationwide and launch 50 new 1Malaysia clinics, he said.
To ease the workload of doctors who have to work up to 120 hours per week, the Government has introduced a flexible schedule with an average of 60 working hours per week for housemen.
3. IGP vows to use extra funds to beef up force
Inspector-General of Police Tan Sri Ismail Omar has welcomed the funds allocated to the police force in Budget 2012 and promised to put the funds to good use.4. Civil servants allowed to serve until they reach 60
Civil servants will now be able to serve two years longer, with the retirement age extended to 60, and also take home a bigger purse each month under a new remuneration scheme that also comes with better annual increments.
Besides that, they will enjoy a half-month bonus at the end of the year as a reward for achieving national development goals.
The extension in retirement age from 58 and the additional half-month bonus are among the highlights for civil servants in the 2012 Budget announced by the Prime Minister yesterday.
Datuk Seri Najib Tun Razak, who is also Finance Minister, said the age of retirement had been extended as civil servants are seen as still capable to contribute their skills and experience up to 60.
“This extension will not jeopardise the employment prospects of the younger people as both the public and private sectors will continue to create new job opportunities,” he said.
Recognising the support and commitment of the more than 1.3 million civil servants, he announced an additional half-month salary bonus, with a minimum payment of RM500, that will be paid with their December salary. He said this would total to one-month's pay, with a minimum payment of RM1,000.
Najib said an additional assistance of RM500 would be paid out to government pensioners which would also total RM1,000 for the 618,000 retirees. The total bonus and assistance payments for this year will come up to RM4bil.
A new era is also set to dawn upon the civil service as the Government embarks on a new civil service remuneration scheme, which will see an improvement in the salaries of civil servants through a single tier structure. It comes with additional increments.
Najib said this meant that the maximum salary for a particular grade would now be higher. “For example, the new scheme will see a teacher on grade DG48 receiving a maximum salary of RM8,710, compared with RM6,325.39 under the existing scheme,” he said, adding that the scheme would also have an exit policy for under-performing civil servants and those who choose to leave the service.
5. Cuepacs gets more than it bargained for
It is more than a dream Budget for Cuepacs, which got more goodies than expected.
Its president Datuk Omar Osman said issues which it had been pushing for, such as new remuneration scheme, higher increment, bonus and extension of retirement age had been met by the Government.
“Not only that, it offered us more by giving incentives to further studies and also increments for annual pensions. This is the best Budget so far and I would like to thank the Prime Minister.
“It is now time for civil servants to deliver their part of the deal by giving the best service to help the Government fulfil its promises to the rakyat. Be ready to work hard and prove our worth,” Omar said.
He said the new Civil Service Renumeration Scheme (SBPA) provided civil servants with higher annual increments of between RM80 and RM320 compared to the RM40 and RM120 under the present Malaysian Remuneration System.
“However, we need to get the full details of the SBPA. I was told there will be a briefing on this.”
6. Vernacular and mission schools hail fund as timely
The allocation of the RM100mil special fund for the construction, improvement and maintenance of vernacular and mission schools in Budget 2012 brought cheers to heads of schools.
National Tamil School Headmasters Council president P. Doraisamy applauded the move to develop Tamil schools under the Budget.
“The fund is timely to repair the dilapidated Tamil schools in the country,” he said.
Malayan Christian Schools Council honorary secretary Yin Kam Loke said the allocation for mission schools was “very good news” as such schools needed funds.
She added that they were thankful and appreciative of the allocation, which would be used to repair and upgrade the schools. She hoped the funds would be disbursed soon.
Dong Zong (The United Chinese School Committees Association) deputy president Chow Siew Hong said that while the announcement was welcomed, he had expected national-type Chinese schools to receive a bigger share of the allocation.
“We hope that the Government will continue to support the development of vernacular schools and not make this allocation a one-off thing,” said Chow.
7. Boon for education sector
The education sector proved to be a big winner with a staggering RM50.2bil being allocated for it under Budget 2012.
Compared to last year's allocation of RM39.5bil, the huge amount this time would be for a comprehensive spread across the board from schools to teachers, to students and parents.
NUTP secretary-general Lok Yim Pheng said that unlike previous announcements, Budget 2012 took into account a wider scale of things and included individuals from all age groups.
“This year's allocations are different as they include the younger generation all the way to senior citizens.”
She said that the abolition of school fees for primary and secondary schools was a good move as it would help ease the burden of lower income families.
“After all, every child deserves an education, so I am glad that the Government has made free schooling a reality.”
8. Internship tax incentive for companies doubles the joy
Students and fresh graduates will have more job-placement opportunities with the announcement of tax incentives for companies which participate in internship programmes.
“Companies will be more willing to offer internship placements while the interns will get valuable hands-on experience and make themselves more employable,” said Malaysian Employers Federation (MEF) president Datuk Azman Shah Haron.
In his Budget 2012 speech, Datuk Seri Najib Tun Razak said companies would enjoy double tax deduction on allowances paid to those pursuing internship programmes with them.
The move, he said, was to encourage Government-private sector cooperation in strengthening the development of highly-skilled human capital. Companies would also get double tax deduction for scholarships and expenses incurred while taking part in career fairs abroad.
However, Azman said the Budget should have included a reduction in income tax rates to help offset the rising cost of living. He said that many other countries were reducing their income tax rates and Malaysia had one of the highest in the region.
The Prime Minister had also announced that the employers’ contribution to the Employees Provident Fund (EPF) would be increased from 12% to 13% for employees earning RM5,000 and below to benefit 5.3 million EPF contributors in the country.
9. Incentives will spur cabbies to buy their own taxis
The incentives introduced in Budget 2012 for taxi drivers will not only alleviate the burden of operators but will also spur more owners to purchase locally-manufactured vehicles for conversion to taxis.
Among the assistance that was proposed by the Government are the exemption for excise duty and sales tax for the purchase of locally-made taxis as well as for taxis that were sold or transferred of their ownership after seven years.
Besides that, road taxes for taxis have also been abolished for individually-owned budget taxis and a payment of RM3,000 for the disposal of old taxis that exceeded a life span of seven years but less than 10 years.
For taxis that exceeded a 10-year span, an assistance of RM1,000 will be given. The monetary assistance is only granted for purchase of new locally-made cars for a period of two years beginning Jan 1.
Prime Minister also announced that Bank Simpanan Nasional would offer a loan scheme with an interest rate subsidy of 2% on full loans for purchase of new locally-made taxis for a period of two years, which will also commence on Jan 1.
10. Fuel for better public transport
Bus operators and taxi owners received some special attention in Budget 2012 as the Government tries to improve public transportation.
“The rural community frequently encounter difficulties arising from unreliable bus services. To provide a more comfortable, reliable and quality service, an additional RM150mil will be provided to the Public Transport Development Fund in the SME Bank.
“Stage, mini and school bus operators can apply for soft loans with an interest rate of 4%, to purchase or refurbish buses,” said Prime Minister Datuk Seri Najib Tun Razak.
Budget taxi owners, on the other hand, will be able to buy new locally made taxis without paying excise duty and sales tax. Road tax for individually-owned taxis have also been waived.
On budget taxis, Najib said the Government was aware of increasing operating costs, and that most taxis had exceeded their economic life.
Besides the exemption of excise duty and sales tax on new locally-made cabs, taxi owners will also be exempt from the same taxes when transferring the ownership of the vehicle after seven years.
There will also be an interest rate subsidy of 2% on a full loan to buy new locally made taxis, which will be offered for a two-year period via Bank Simpanan Nasional (BSN).
11. Tax exemption for donations to places of worship and govt schools
Those who contribute to government-registered schools and places of worship may soon be able to seek tax exemption.
Under Budget 2012, the Government will expedite tax exemption approvals for all places of worship as well as education institutions, including registered national, national-type, mission and government-assisted religious schools.
In welcoming the move, Council of Church-es Malaysia president Reverend Dr Thomas Philips said it was on the wish-list of Christians for a long time.
“Those who pay zakat (Islamic tithe) have always gotten tax exemption and it is good for the Government to recognise that Christians also raise their own money,” he said.
The churches should also work out a system to issue receipts to their members, said Dr Philips.
However, this is not an issue for the Sri Maha Mariamman Temple in Batu Caves, having issued receipts to all of its personal contributors.
Temple committee president R. Nadarajah urged Hindu temples nationwide to register with the Government so that their members could also enjoy the exemption.
12. 3.4 million to benefit from RM1.8bil allocation
Households with a total monthly income of RM3,000 and below will receive a RM500 one-off payment to ease their burden. This is part of the short- and long-term measures introduced to help reduce the rakyat's burden following rising prices and higher cost of living.
Prime Minister Datuk Seri Najib Tun Razak said 3.4 million or 53% of total households were expected to benefit from RM1.8bil allocation.
“This unprecedented measure reflects the Government's commitment to reduce the impact of the increasing cost of living on the low-income group,” he said.
The head of each household must register with the Inland Revenue Board which will distribute the money via banks and post offices.
In a bid to reduce schooling expenses, a one-off cash assistance of RM100 will be given to students; and book vouchers worth RM200 for students in public and private institutions of higher learning, matriculation and Form Six.
Najib also announced that the 5.3 million EPF contributors who earned RM5,000 and below would have an increase in their savings as employers would now have to contribute 13%, up from the previous 12%.
Long-term measures include boosting food production such as rice, meat, vegetables and fruits to ensure there is enough supply.
These include launching a 10-year National Agro-Food Policy and developing the agriculture sector.
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