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Budget 2013 – Election goodies – BR1M – RM250 handout to unmarried citizens

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KUALA LUMPUR ― Datuk Seri Najib Razak offered a slew of goodies in Budget 2013 today, spending RM3 billion on cash handouts to families earning below RM3,000 monthly and a 1.5-month bonus for the 1.4 million-strong civil service in what is seen as an election budget before polls that must be held by mid-2013.
The prime minister and finance minister also gave a RM250 handout to unmarried citizens above 21 years old and earning less than RM2,000 ― the bulk of the three million new voters set to vote in the next general election.

Schoolchildren will also get RM100 each from Putrajaya next year, while RM1.2 billion has been allocated for senior citizens, children, disabled workers and those with chronic illnesses under the 1 Malaysia Welfare Programme.

Najib also cut one percentage point in income tax for the first RM50,000 of chargeable income, providing minor relief to the 1.2 million taxpayers in the country of 28 million.

But the ruling Barisan Nasional (BN) government cut sugar subsidy by 20 sen/kg, leaving the subsidy now at 34 sen/kg, bringing down the sugar subsidy bill to RM278 million at current prices.

The government will also spend RM1.9 billion to build 123,000 housing units for those earning between RM3,000 and RM5,000.

Macro

  • Total expenditure – RM249.7 bil, down 1.1 percent, but 7.2 percent higher than 2012 initial budget
  • Deficit – Expected to go down by 0.5% to 4% in 2013. Target is to reach 3 percent by 2015
  • Federal government debt 2012 – RM502.4 bil (highest in history) or 53.7 percent (highest since early 1990s)
  • Government revenue RM208.6 bil, up RM1.4 bil
  • Government estimated to have overspent RM19.6 bil in 2012

Small and medium industries

  • RM1 bil SME development scheme
  • Group insurance for petty traders with maximum RM5,000 coverage
  • New loan facilities for petty traders

Tourism

  • Target for Visit Malaysia Year 2013/2014: 26.8 mil tourist
  • Three-year tax holiday for tourism companies handing 750 foreign tourists and 1,500 local tourists.

Agriculture

  • RM705 mil for replanting, technology development, smallholder assistance and product development, particularly for oil palm.
  • RM200 monthly allowance, 10 to 20 sen/kilo income support and up to RM100,000 coverage for fishermen
  • RM2.4 bil in subsidies and incentives for rice plantations.

Commerce

  • 10-year tax holiday for Tun Razak Exchange companies, expected to attract 250 companies related to finance sector
  • Skim Jaminan Modal Kerja expanded for companies with shareholdings worth RM20 mil, and offered up to Dec 31, 2013
  • RM350 mil for entreprenuers under TEKUN programme, including RM50 mil for the Indian community
  • SME Bank bumiputera fund – RM1 bil
  • Bumiputera equity holding up: 23%

Education and labour

  • RM1 bil to improve school infrastructure
  • RM1.2 bil for pre-schools under government programmes including Permata
  • RM10,000 launching grants for private pre-school operators
  • Five-year tax holiday and building allowance for pre-school operators
  • Six pilot pre-schools for the disabled
  • RM3.7 bil for vocational training
  • Additional allocation of RM500 million for training of teachers in core subjects: Bahasa Malaysia, English, Science and Maths
  • Free health checks, twice a year, for Perkeso members

Research and development

  • RM600 million R&D grants for five universities. Focus: Nanotechnology, automotive, bio-technology and aerospace technology
  • Tax holiday for research and development investment (10-year tax holiday for statutory earnings)
  • RM2 billion for green technology scheme

Pensioners and senior citizens

  • Minimum pension for those who served at least 25 years up from RM720 to RM820.
  • 50 percent off passport fees for senior citizens starting Jan 2013

Armed forces

  • RM200 a month incentives for armed forces personnel
  • Allowance hike from RM4.00 to RM7.80 an hour for reserve corps and territorial army
  • One-off payment of RM1,000 for army veterans who served for at least 21 years, where 224,000 will qualify.
  • Insurance coverage of up to RM15,000 for police and army.

Crime

  • 1,000 motorcycles for the police neighbourhood patrol unit.
  • Additional 10,000 volunteer police
  • 496 CCTV in 25 local councils
  • RM10,000 grants for neighbourhood associations for patrols
  • New uniforms for 300,000 Rela members
  • Incentives for companies that install security systems
  • Additional 150 staff for Malaysian Anti-Corruption Commission (MACC)
  • RM20 million for legal aid

Rural development

  • RM88 million for Orang Asli development
  • 40,000 water tanks for those in the interiors of Sabah and Sarawak
  • 19,000 homes to get electricity and 24,000 homes to get tap water
  • 441 kilometers of new rural roads

Health

  • RM100 million to improve 350 government clinics
  • 70 more Klinik 1Malaysia to be established, increasing total number to 240.

Youth and sports

  • Velodrom in Seremban, Negri Sembilan and a Badminton Academy in Bukit Kiara,Kuala Lumpur
  • Subsidy of two percent of interest rates business loans for young entrepreneurs for loans up to RM100,000
  • RM200 rebate for smart phone purchase for those aged 21 to 30 years.

Public transport

  • Half price Komunter fares for those earning less than RM3,000 a month.
  • Formation of RapidKuantan.

Housing

  • Affordable housing – 123,000 units to be built, in areas such as Sungai Buloh and seremban
  • First home scheme – income cap raised from RM3,000 to RM5,000. Join income limit is RM10,000. Applies only for houses below RM400,000
  • Up to 50 percent stamp duty exemption for first home owners until Dec 14, 2014
  • Real property gains tax (RPGT) for properties sold within two years of purchase raised to 15%;  2-5 years 10%. No RPGT for properties sold five years after purchase
  • Tax breaks and incentives for contractors and banks who offer loans to contractors to revive abandoned housing projects. Original buyers of abandoned projects will be exempted from stamp duty for loan refinancing or ownership transfer agreements

Bantuan Rakyat 1Malaysia (BR1M 2.0)

  • RM500 cash for households with combined income of RM3,000 or less
  • RM250 cash for unmarried individuals who are 21 and above and earning RM2,000 and below
  • Disbursement – Early 2013

Subsidi cuts

  • Sugar prices to increase as a result of subsidy cuts by RM0.20. New prices are RM2.50 per kilo for Peninsular Malaysia and RM2.60 per kilo for Sabah and Sarawak.

Tax cuts

  • 1% tax reduction for those with a taxable income of RM2,500 to RM50,000
  • Tax cuts for corporations

Students

  • RM10,000 rebates and 2% interest subsidy on loans to purchase new school buses, to replace buses which are 25 years or more. (Capacity 12 to 18 seats)
  • RM2.6 bil in welfare aid for schoolchildren
  • One-off payment of RM100 for each primary and secondary school student
  • 20% discount for National Higher Education Fund (PTPTN) loans for those who pay off the entire amount outstanding (valid until Sept 30, 2013)
  • 10% discount for PTPTN loan repayment for those who pay consistently
  • 100 neighbourhood internet centres

The government will also spend RM1.9 billion to build 123,000 housing units for those earning between RM3,000 and RM5,000. Among some of the other notable government spending plans are:

• RM500 million for the River of Life project to rejuvenate Klang River

• RM9 billion for Mass Rapid Transit contracts

• RM200 million for the “Halal” Industry Fund

• RM1 billion for Bumiputera small and medium industries (SMEs)

• Minimum pension for those with at least 25 years’ service to be raised from RM720 to RM820.

• RM38.7 billion to improve quality of education in the country, with an additional RM500 million to train teachers in the core subjects of English, Bahasa Malaysia, Science and Maths.

• Tax-free incentives and grants for the setting up of new nurseries and kindergartens.

• RM1.2 billion for pre-school development.

• RM1 billion to upgrade schools: RM400 million for national schools, and RM100 million each for Chinese, Tamil, mission, religious, boarding schools and MRSM

Among some of the other notable government spending plans are:

• RM500 million for the River of Life project to rejuvenate Klang River

• RM9 billion for Mass Rapid Transit contracts

• RM200 million for the “Halal” Industry Fund

• RM1 billion for Bumiputera small and medium industries (SMEs)

• Minimum pension for those with at least 25 years’ service to be raised from RM720 to RM820.

• RM38.7 billion to improve quality of education in the country, with an additional RM500 million to train teachers in the core subjects of English, Bahasa Malaysia, Science and Maths.

• Tax-free incentives and grants for the setting up of new nurseries and kindergartens.

• RM1.2 billion for pre-school development.

• RM1 billion to upgrade schools: RM400 million for national schools, and RM100 million each for Chinese, Tamil, mission, religious, boarding schools and MRSM

• “My First Home Scheme” income limit for individual loans increased from RM3,000 to RM5,000 per month, and up to RM10,000 for joint loans of married couples.

• Limit for stamp duty exemption for houses raised from RM350,000 to RM400,000. Exemption is also extended to December 2014.

• Real property gains tax increased from 10 per cent to 15 per cent for properties sold within two years of purchase, and from 5 per cent to 10 per cent for properties sold between two and five years.

• Value of 1 Malaysia Book Voucher for students increased from RM200 to RM250.

• Tax relief for higher education up from RM4,000 to RM6,000.

• Tax relief for the National Education Savings Scheme doubled, from RM3,000 to RM6,000.

• Twenty per cent discount on full settlements of National Higher Education Fund Corporation (PTPTN) loans between October 1 2012 and September 30, 2013.

• Ten per cent discount on regular repayments of PTPTN loan instalments.

• FELDA to build 20,000 units of housing costing RM1.5 billion on 5,000 acres of FELDA land.