KUALA LUMPUR – The revised Budget 2023 tabled by Datuk Seri Anwar Ibrahim today is seen as an all-encompassing one.
The 10th prime minister’s maiden budget has even earned some praise from the opposition amid a bleak global economic outlook for the year and challenges in addressing leakages and graft.
Announcing a raft of initiatives and plans, Anwar kicked off his two-hour speech to lament how the national debt and liability have surpassed a staggering RM1.5 trillion today, equivalent to 81% of the gross domestic product (GDP).
With the theme Developing Malaysia Madani, the allocation under Budget 2023 has been revised upwards to RM386.14 billion from RM372.3 billion in October last year.
Anwar, during his speech, also highlighted the government’s debts to finance past non-beneficial mega projects, which has raised serious questions about the betrayal of public trust and the burdens to be faced by future generations.
Graft and misappropriation aside, addressing the cost of living is also one of the revamped budget’s main focuses, with the government pledging to provide up to RM64 billion in subsidies, aids, and incentives, among others.
With this in mind, The Vibes has looked into some highlights of some of the biggest winners and losers of the revised Budget 2023.
Biggest winners
1. The B40 and M40 groups
The government wishes to end hardcore poverty plaguing some 130,000 people by proposing the People’s Income Initiative (IPR) which focuses on empowerment and increasing income potential through an allocation of RM750 million to the Economy Ministry.
The programme will enable participants to earn between RM2,000 and RM2,500 a month for two years, after which they are expected to use the earnings to generate future income.
Anwar noted that a large portion of the RM64 billion allocation is to minimise the cost of living through price control of goods, financial assistance, and to provide services to most people.
Separately, households earning less than RM2,500 will be given cash assistance of up to RM2,500, while an additional RM600 of aid in the form of food baskets and basic food item vouchers will also be distributed to those in the lowest income brackets. This also means that the hardcore poor will be qualified to receive maximum assistance of RM3,100.
For middle-income earners, the government is looking to reduce the individual income tax rate for the M40 group by two percentage points this year.
The reduction would apply to those who are earning between RM35,000 and RM100,000 annually, affecting up to 2.4 million taxpayers in the country. This will provide the M40 group with an increased disposable income of RM1,300, Anwar said.
Moreover, Padiberas Nasional Bhd (Bernas) has agreed to share 30% of its net profits from rice imports with padi farmers. This will complement the RM60 million in assistance for rice farmers nationwide as part of initial measures to dismantle Bernas’ long standing monopoly of the rice industry.
2. Youth and sports
Youths aged between 18 and 20 years old will be given a one-off e-cash credit of RM200, with 2 million individuals standing to benefit from this initiative dubbed “e-Tunai Belia Rahmah” – which involved a total allocation of RM400 million.
The Youth and Sports Ministry saw a significant increase to RM399 million, from RM289 million allocated last year. This budget saw the sports industry receive an extra RM110 million from the government – where a significant amount of RM324 million is for training programmes and sports facilities for all athletes and para-athletes.
Anwar noted the allocation is also to develop the sports ecosystem which involves the search for talent all the way to the podium events, as well as to maintain and upgrade sports facilities across the country.
3. Filmmakers, creatives, and the entertainment industry
Anwar said the government will be allocating RM102 million for the Digital Content Fund to promote the works of local artists and to spur the creation of more original productions.
To support artists in creating high-quality content, Anwar proposed that contributions to the Film Community Fund and the National Film Development under Finas will be given a tax deduction.
Additionally, import duty and sales tax on studio equipment and film productions will also be exempted.
4. Bankrupts
Those declared bankrupt and who had debts below RM50,000 will have their statuses removed by March 1, as the government looks to give them a second chance.
Anwar noted that there were currently more than 260,000 bankruptcy cases recorded, mostly involving Malays who could help contribute to the country's economy. With the proposal, the government is looking to free 130,000 people from their bankruptcy status once amendments to the Insolvency Act 1967 are passed.
5. Education
The Education Ministry still receives the highest allocation among all ministries with a total allocation of RM55.2 billion compared to RM52.6 billion for 2022.
Anwar noted the budget for schools’ food programme or also known as Rancangan Makanan Tambahan, will be raised from RM625 million to RM777 million, benefitting 700,000 pupils.
For preschool children, a similar programme will have its allocation increased from RM89 million to RM108 million, and benefit 240,00 children at preschools under the ministry.
Furthermore, Anwar also promised to finally resolve the perennial issue of dilapidated public schools and clinics by the end of this year. He said this will involve 400 clinics and 380 schools that are set to be given immediate attention by the ruling government.
6. Health sector
With the second largest allocation of RM36.3 billion in Budget 2023 compared to RM32.4 billion last year, the health sector is easily one of the biggest winners of the year.
Anwar noted this allocation involved the procurement of medicines, reagents, vaccines, and consumables, with RM3 billion allocated for new permanent and contract appointments for more than 1,500 medical officers, dentists, and pharmacists, Bernama reported.
The allocation, Anwar said, will also be looking at addressing overcrowding at government health facilities by outsourcing patients from overwhelmed hospitals to other facilities, including those in the private sector.
Biggest losers
1. The high-income T20 group
While the income taxes for the M40 group have been slashed by two percentage points, individuals earning between RM100,000 and RM1 million ringgit will have theirs raised by 0.5% and 2%. However, Anwar said this only involved 150,000 taxpayers, a small portion of the country's over 30 million population.
Without going into detail, Anwar also told the lower house that his administration will be introducing a tax on luxury goods this year. These include luxury watches and expensive fashion items.
2. Vapers
Those who have switched from smoking to vaping to save money may now have the motivation to kick the habit, as the government is planning to impose excise duty on liquid or gel products containing nicotine that is used for electronic cigarettes.
Anwar noted that this was a concerning issue as nicotine vapes, being illegal, are still widely sold and are estimated to be worth more than RM2 billion.
3. Scammers, middlemen, and exploitative foreign migrant agents
Anwar expressed his concerns over the rise in scam-related crimes as more than 25,000 cases involving a whopping RM850 mil were reported in 2022 alone.
He said although the government had set up a National Scam Response Centre (NSRC), there was still a lack of a uniform policy straddling banks regarding the issue.
Therefore, he said the government has allocated RM10 million to NSRC’s operations, apart from the enforcement of a “kill switch” policy that allowed account holders to freeze their own accounts when suspicious activities occur.
Anwar noted that past weaknesses in the management of procurement and projects have created leakages in the government's coffers, even affecting national defence preparedness.
Citing the recent RM6 billion littoral combat ship (LCS) issue Anwar said the practice of middlemen should be stopped immediately. The same approach, he said, would apply to those who monopolised the recruitment of foreign workers.
4. Telcos seeking Dual Wholesale Network for 5G rollout
Although some of the country’s biggest telecommunications companies have made a new bid to create another network for the nation's 5G roll-out, Anwar told the lower house that he wanted their “full participation” in the effort currently run by government special purpose vehicle Digital Nasional Bhd (DNB).
While he did not specifically mention the telco's need to jump on DNB’s Single Wholesale Network model, Anwar said the government wants to ensure that DNB was managed in a “more transparent manner to achieve full participation by the telcos”. – The Vibes, February 24, 2023
