The following are the salient points in Prime Minister Najib Razak’s 2011 Budget speech. The 2011 Budget is Najib’s second since taking over as prime minister in 2009.

Total budget – RM212 billion, 2.8% higher than the 2010 Budget

Operating expenditure – RM162.8 billion

Development expenditure – RM49.2 billion

• 2010 growth revised to seven percent compared to six percent previously, fuelled by private investment growth (15.2%), private consumption (6.7%) and exports (11.6%)

• 2011 growth expected to hover between five to six percent supported by private investment (10.2%), private consumption (6.3%) and exports (6.7%)

• 2011 per capita income expected to go up 6.1% to RM28,000, while income in terms of purchasing power parity will hit US$16,000, tempered by moderate inflation (2-3%) and low unemployment (3.5%)

• Budget deficit is expected to go down to 5.4% of GDP, compared to 2010 figure of 5.6%

• Federal government revenue is estimated to increase 2.3 percent to RM165.8 billion in 2011, compared to RM161.1 billion in 2010

• Private investment to expand 12.5% to RM86 billion.

Emphasis on Public-Private Partnership (PPP) projects

• RM12.5 billion worth of public private partnerships (PPP) will be implemented under budget 2011, with RM1 billion facilitation fund from government

• Mass Rapid Transit project to be implemented beginning 2011 with private investment of RM40 billion and to complete by 2020.

• Academic Medical Centre – a joint-venture between Academic Medical Centre Sdn Bhd and John Hopkins Medical International as well as Royal College of Surgeons, Ireland – which involves private investment of RM2 billion

• Development of International Islamic University Teaching Hospital in Kuantan; Women and Children’s Hospital

• Construction of a 300MW Combined-Cycle Gas Power Plant in Kimanis, Sabah

• Construction of highways such as the Ampang-Cheras-Pandan Elevated Highway

RM5 bil new tower in KL

• A new landmark, Warisan Merdeka, expected to be completed in 2015, will include a 100-storey tower, the tallest in Malaysia

• It will stand on land next to Stadium Merdeka and Stadium Negara. Both stadiums to be retained as national heritages

EPF to fund Sungai Buloh development

• Development of the Malaysian Rubber Board land in Sungai Buloh covering an area of 2,680 acres. To be funded by EPF with RM10 billion over 15 years.

• EPF overseas investments will be increased from seven percent to 20% of total assets managed

Investments

• GLCs to divest shares in major companies listed on Bursa Malaysia to increase liquidity and trading velocity

• An International Board will be added onto Bursa Malaysia to increase foreign investment, especially to promote syariah-compliant products

• Bumiputera Property Trust Foundation will be launched to enhance bumiputera ownership of prime commercial properties in urban areas

Corridor projects not forgotten

• Corridor and regional development will be accelerated with injection of RM850 million

• RM93 million for Sarawak Corridor of Renewable Energy

• RM133 million for Northern Corridor Economic Region

• RM178 million for projects in East Coast Economic Region

• RM339 million for Iskandar Malaysia

New private pension fund

• To revitalise capital market activities, the government will launch a Private Pension Fund in 2011

• Existing income tax relief of up to RM6,000 for employees contributions to EPF will extend to Private Pension Fund contributions

Funds to help businesses

• RM146 million fund to support the oil, gas and energy industry

• RM857 million allocated for local E&E (electrical and electronic) companies to compete at the international level

• To help entrepreneurs that face financial problems, Insolvency Act to consolidate Bankruptcy Act 1967 and Part 10 of Companies Act 1965, including introduction of provision relating to relief mechanism for companies and individuals with financial problems. Review will also amend current minimum bankruptcy limit of RM30,000

Tourism

• RM100 million allocated to support the tourism industry

• RM3 billion eco-nature resort Nexus Karambunai, Sabah, to commence 2011

• RM85 million to facilitate construction of hotels and resorts in remote areas

IT development

• Multimedia Development Corridor programme allocated RM119 million. Focus is on creating an innovative digital economy.

• Import duty and sales tax exemption on broadband equipment extended for two years until 2012.

Minimum wage

• A National Wage Consultation Council will be set up to determine the rate and mechanism of minimum wage for various sectors.

• Basic minimum wage for security guards to go up to between RM500 and RM700 depending on location, compared to RM300 to RM400 previously

• Fully-paid maternity leave for civil servants to go up to 90 days compared to 60 days previously

• Levy on foreign workers to increase in stages according to sector. Health insurance for foreign workers now mandatory.

Training

• Talent Corporation to be set up under Prime Minister Office in early 2011, will formulate National Talent Blueprint

• Aim to increase PhD qualified academic staff to 75% in research unis and 60% in other public institutions of higher learning

• 1Malaysia Training Programme will be launched January 2011 with an allocation of RM500 million

Sabah and Sarawak

• RM2.1 billion to upgrade rural roads in Sabah and Sarawak, RM696 million for Semenanjung Malaysia

• RM1.5 billion to develop rural electricity and water supply in Sabah, RM1.2 billion for Sarawak and RM556 million in Semenanjung Malaysia

Allocation for ministries

• RM15.86 billion for Prime Minister’s Department. It was RM14 billion in 2009 and RM12 billion in 2010

• RM29.3 billion allocated for Education Ministry

• RM10.2 billion for Higher Education Ministry

• RM1.2 billion to the Ministry of Women, Family and Community Development

• RM627 million for Ministry of Human Resource

• RM111 million for Permata (Pusat Anak Permata Negara)

Other salient points

• Scheduled hike in toll charges for four highways owned by Plus Expressways Bhd will be frozen for the next five years.

• Civil servants Grade 54 and below will get a RM500 Special Financial Assistance, including contract officers and retirees, payment will be made in December 2010

• Maximum housing loan eligibility for civil servants up to RM450,000 from RM360,000 previously

• First-time homeowners will also enjoy a 50 percent discount on stamp duties for homes below RM350,000.

• Young adults of household incomes of less than RM3,000 will be assisted through a first-home owner scheme where government will guarantee 10% down payment for homes below RM220,000. This means that house buyers will obtain a 100% loan without having to pay the 10% down payment.

• Malaysian permanent estate workers will get maximum RM60,000 housing loans to buy low-cost houses at four percent interest rate and repayment period of 40 years extending into second generation

• Sales tax for mobile phones reduced by 10 percent.

• RM350 million allocated to boost efforts to cut down crime index, and establish 25 special courts to expedite prosecution.

• Full import and excise duties exemption granted to franchise holders of hybrid cars extended to Dec 31, 2011, extends also to electric cars and hybrid and electric motorcycles

• Import duty on approximately 300 goods preferred by tourists and locals, at 5% to 30%, be abolished

• Service tax to be increased from 5% to 6%. Government proposes to impose service tax on paid television broadcast services

• Excise duty exemption on national vehicles purchased by the disabled to go up to 100 percent from 50 percent previously

• RM200 million allocated for Distribution of Essential Goods programme, on top of RM100 million allocated under budget 2010, to standardise prices nationwide

• 375 native English speakers to be recruited from United Kingdom and Australia to improve teaching of English.

• Monthly allowance of community leaders (JKKK, village heads, Tok Batin, etc) to be increased to RM800 from RM450 previously. Meeting attendance allowance also increased from RM30 to RM50

• Imam allowance increased from RM450 to RM750, KAFA (religious school) teachers’ allowance also goes up to RM800 from RM500

• RM1.9 billion allocated for environmental projects, including for the River of Life programme and greening of Kuala Lumpur

• Point system to be introduced to facilitate permanent resident status applications, and can be applied for after five years of residence compared to 10 years previously

Source Malaysiakini