Recently we have heard our Finance Minister tabled out Malaysia Budget 2020 with the theme “Driving Growth And Equitable Outcomes Towards Shared Prosperity”. The goal is to bring stability to our country finances & grow the country towards our Prime Minister new foundation called “Shared Prosperity Vision 2030”.
There are many Malaysians that are able to benefit from this budget & of course, they can’t please everyone so there are some that are not able to benefit from it as well. Of course, they will not reintroduce GST.
Who Are The Winners?
With Trade War that is happening between USA & China, Malaysia is definitely affected from it on both good & bad end. The good side of it is, many foreign companies are switching their business or production from China to Malaysia. Government initiative of attracting foreign companies will be revamped for Special Incentive Package which is expected to be ready on 1st January 2021. Customized Incentive Package for Fortune 500 or special unicorn companies that are in line with Malaysia preferred economy sector such as technology & manufacturing. To support our export growth, government will also be looking at our supply chain sector with modernization of our overall country supply chain network with investment to grow to Port Klang to it’s full potential, building a logistic hub in Bukit Kayu Hitam & development of a better infrastructure.
RM250 million will be mainly for their income enhancement program which will be benefiting 11,600 settlers & also RM300 million to write-off the interest of their debts. Upgrading their infrastructure, water supply & building new houses for new generation are also part of the benefits for FELDA settlers.
In line with Malaysia Foreign Direct Investment, government will be having initiative to grow SME as well. Exports will be highly encouraged for SME. There will be allocation for borrowings under Skim Jaminan Pinjaman Perniagaan & SME Bank. Equity Crowdfunding (ECF) & Peer-to-Peer Financing companies are able to benefit with RM50 million additional allocation via My Co-Investment Fund (MyCIF) to help to finance the SME.
It is always good to know that Bumiputera Rights are protected despite changes in new government. RM300 million funds will be given to Bumiputera SME with priorities given to Halal product & manufacturers that have high local content. RM445 million grants to encourage Bumiputera entrepreneur will be provided for financing, premises & training.
Unemployed Fresh Graduates
Graduates that are unemployed for more than 12 months will get allowance of RM500 for 2 years once they are able to secure a job. Employers will also get hiring incentive up to RM300 for 2 years per new hire.
RM200 million fund will be allocated for women entrepreneur with loan offering up to RM1 million per SME. For women that stopped working for a year or more are entitled for RM500 for 2 years upon returning to work & hiring employers will get up to RM300 for 2 years. Increase of maternity leave from 60 days to 90 days will be effective 2021.
Their Cost of Living Allowance (COLA) will be increased by RM50 a month starting 2020. Special payment of RM500 for Civil Servants Grade 56 & below. Retirees will get RM250 of special payment as well. Funds will be allocated to repair & maintain existing quarters for civil servants such as armed forces & police.
With 4 tolls acquisition or KESAS, LDP, SPRINT & SMART, government aims to reduce overall PLUS Highway by average of 18%. Second Penang Bridge Toll Rates will reduce from RM8.50 to RM7.00. Government is also working to introduce 5G which is 100 times the speed of 4G. Improvement of internet in rural area will be another focus. I think it is good especially with our slow internet that we’ve been facing for so many years. RM30.6 billion will be allocated under Health Ministry for upgrades of equipments, hospitals & building new hospitals. Minimum wage will be RM1200 effective 2020 in main cities. RM30 will be credited to Malaysians E-Wallet as an initiative to encourage E-Wallet usage in Malaysia.
Who Are The Losers?
High Income Earners
New taxable income bracket will be introduced for income earners who earn more than RM2 million from 28% to 30%.
I honestly think that the Fuel Subsidy is not good enough to cover the floating price of the petrol. With the previous memorandum that was proposed prior GE13, I think they can do better on this especially we are one of the producers of petroleum in the world. For those that are into Netflix, Spotify or gaming, Digital Tax will be introduced which means that you have to spend extra cash on top of your existing subscription.
My Thoughts :
Overall I think it is good that government is having initiatives to grow our country economy. But with the past 1 year track record, are the able to fulfill it? Their efforts definitely benefit most of us & they can’t be pleasing everyone. With the introduction of floating petrol price & Digital Tax, we will definitely spend more but if you look at the overall benefits, I think you are able to benefit more especially if you are an entrepreneur. Personally I am happy with the overall Budget 2020 & let’s hope for the best.