This is the second part of the speech tabled by the finance minister in Parliament today. You can read Part 1 here
SECOND Focus: Resilient Businesses
Datuk Speaker Sir,
146. The pandemic has spared none from its effects. businesses of all sizes, from the micro and small and all the way to large multinationals, were directly impacted by the pandemic. For example, nearly 37,000 small and medium enterprises (SMEs) have closed down since the outbreak of the Covid-19 crisis. To minimise the impact of the crisis, the government has announced various initiatives through relief and stimulus packages to ensure business continuity.
147. With most economic sectors now back in operation, domestic demand is expected to recover. However, there are still a number of economic segments that have been badly affected and still need support to bounce back and rebuild themselves. Hence, the second focus, Resilient Businesses will focus on strategies to restore business capabilities, which include to ensure access to financing, drive strategic investments and revive targeted sectors.
Strategy 1: Revive Business Capabilities
148. As part of the first strategy, which is to revive business capabilities, the government as a facilitator will expand access to financing for businesses, especially for the micro entrepreneurs and those in the informal sector. Based on my engagements with various stakeholders, financing access issues are often raised, among both small enterprises and large companies.
149. To that end, for 2022, a total financing package of RM40 billion will be made available under the Semarak Niaga Keluarga Malaysia Programme (or SemarakNiaga). This financing scheme includes direct loans, financing guarantees and equity-based schemes, which aims to benefit businesses of all sizes, from micro-enterprises all the way to public listed companies.
Initiative 1: Microcredit Scheme
150. Next year, microcredit financing worth about RM1.8 billion will be provided through various agencies such as Tekun, Agrobank, BSN, Bank Rakyat and Bank Negara Malaysia. This initiative takes heed of YAB minister’s concern for interest-free financing to support and assist the microentrepreneurs.
151. As such, Tekun will be introducing a financing scheme for microenterprises and the informal sector which will offer financing at 0% interest for a maximum loan amount of up to RM10,000, with a moratorium period of up to 12 months. Under this scheme, priority will be given to micro traders in the informal sector. In addition to that, BSN and Agrobank will also offer micro credit loans of up to RM75,000 at a 0% interest rate for the first six months of the loan tenure, with a six-month moratorium.
152. Recognising the importance of the cooperative movement’s contribution, the government will continue the Cooperative Movement Economic Transformation Programme (Transfer) with an allocation of RM10 million to help affected cooperative activities recover. In addition, a fund of RM30 million will be provided for the Cooperative Economic Recovery Intervention Financing Programme. At the same time, programmes such as the provision of food truck business sites in major urban areas will be implemented through the Malaysian Cooperative Commission to support business activities by cooperatives.
153. In support of social finance initiatives, the government will also allocate RM20 million to help expand the i-Tekad programme, which offers initial capital, microcredit and structured training to microenterprises.
Initiative 2: Business Financing and Alternative Financing
Datuk Speaker Sir,
154. There are companies that are viable but have limited capability to obtain new funds. As such, the government and financial institutions have introduced new forms of financing that are more flexible to provide companies with some breathing space amid efforts to revive their business.
155. It is worth noting that funding through equity crowdfunding and peer-to-peer lending platforms grew rapidly during the pandemic, where RM1.3 billion in funding was raised via these platforms since the start of the pandemic. Therefore, the government will continue to support such platforms with an allocation of RM80 million in matching grants for the Malaysia Co-investment Fund, in addition to the investment by BPMB of RM100 million.
156. In addition, to assist companies facing gearing or leverage problems, funding worth RM2.1 billion will be allocated to support equity and quasi-equity investment schemes which will be led by SME Bank in collaboration with Terjau and BSN with a fund worth RM600 million open to all, and especially targeted for all businesses including Bumiputera entrepreneurs. Similarly, BPMB will also allocate RM500 million for its Rehabilitation and Support through Equity scheme (Reset) in addition to BNM’s Business Recapitalisation Fund worth RM1 billion.
157. In total, RM14.2 billion worth of funds will be available in 2022 for SMEs, through SME Bank, PUNB, BPMB, AgroBank, MIDF, and Mara as well as through BNM’s Funds for SMEs. Under BNM’s Funds for SMEs, the Targeted Relief and Recovery Facility (TRRF) has also been upsized by RM2 billion, bringing the total available funds under various SME facilities administered by BNM to RM11.2 billion.
158. In addition, a specific initiative to assist companies listed on the Bursa Exchange will also be introduced. This initiative aims to help viable companies that were affected by the Covid-19 pandemic get an injection of additional funds through a government-owned SPV in the form of equity instruments or other related instruments. For this purpose, Khazanah Nasional Bhd will be given the mandate to help the government in providing the infrastructure to manage the fund size of at least RM3 billion.
Initiative 3: Business Financing Guarantee
Datuk Speaker Sir,
159. To date, Syarikat Jaminan Pembiayaan Perniagaan (SJPP) has provided over RM46 billion worth of business financing guarantees to over 44,000 companies. SJPP has helped enable SMEs to obtain financing especially during difficult times. This year, SJPP will enhance the scheme with an additional guarantee limit of RM10 billion to provide guarantees for loans that are being rescheduled and restructured for companies in need with RM2 billion being dedicated to Bumiputera businesses. This will help affected companies secure new financing that under normal circumstances, would have been difficult to obtain. In reducing related transaction costs, the government will also grant stamp duty exemption for the rescheduling and restructuring transactions.
Initiative 4: Ease of Doing Business
Datuk Speaker Sir,
160. Compliance with SOPs is of paramount importance to reduce the risk of Covid-19 outbreaks and ensure the safe reopening of the conomy.
161. As such, the government proposes to extend the tax deduction of up to RM300,000 on the cost of for renovating and refurbishing business premises until December 31, 2022, in order to comply with relevant SOP requirements such as ventilation and customer seating.
162. Additionally, for companies registered under Safe@Work, a further tax deduction of up to RM50,000 on rental expenses of employees’ accommodation premises will be extended until December 31, 2022.
163. To increase opportunities for participation in government procurement, we will also simplify the requirements for registration where companies registering for the first time will only be required to pay RM150 compared to RM450 before this. In addition, companies operating in SOHO business premises, shared partitions and coworking spaces are also allowed to register.
164. To make it more convenient for business visitors and investors, a Business Traveller Centre was opened at Kuala Lumpur International Airport. The centre facilitates the arrival of short-term business visitors who are exempted from mandatory quarantine subject to strict SOP compliance. Next year, a similar one-stop centre will be set-up in Johor for short-term business visitors from Singapore at a cost of RM10 million.
165. Whenever I met MSME entrepreneurs, they expressed hope and confidence that 2022 will be the year to invigorate their businesses. Nevertheless, after two years of being shrouded by the Covid-19 pandemic, they still require assistance to recover and fully bounce back. To help entrepreneurs get in motion, the government proposes the following:
First: a deferment of income tax instalment payments for MSMEs for six months until June 30, 2022;
Second: that all businesses are allowed to amend the estimated income tax payable on the 11th month before October 31, 2022;
Third: a special tax deduction to the owners of buildings or business premises who provide rental reduction to tenants of at least 30% from the original rate be extended until June 2022; and,
Fourth: that accumulated unabsorbed business losses tax treatment that can be carried forward be reviewed from seven consecutive years of assessment to a maximum of 10 consecutive years of assessment.
Strategy 2: Driving Strategic Investments
Datuk Speaker Sir,
166. The government remains committed in ensuring that Malaysia continues to be an attractive investment destination, providing significant spill over effects to the economy. The second strategy is to drive strategic investments in key sectors and strengthen growth drivers.
Initiative 1: Investments in Key Sectors
167. A special fund for strategic investments up to RM2 billion will be prepared to attract strategic foreign investments by multinational companies, especially those that complement industry value chains and drive knowledge-based jobs creation as well as development opportunities for local SMEs.
168. To intensify the nation’s economic recovery, RM25 million is allocated under the Budget to explore high impact investments and new export markets through the Trade and Investment Mission.
169. To fulfil skills requirements especially in high value-added industries, an allocation of RM80 million will be prepared through Miti to train 20,000 workers to support industrial clusters such as MRO in Subang, E&E in Kulim and Chemicals in Gebeng. Besides that, RM50 million will also be provided through state skills development centres, such as in Sarawak, Johor and Penang, to improve the TVET skills of 5,000 workers in areas such as oil and gas welding, industrial automation and mechatronics.
170. I had the opportunity to meet Mr Kamarul Muhamed, the founder of Aerodyne Group in Cyberjaya and was impressed with the progress of this Bumiputera company. Aerodyne commenced operations in 2014 with only three employees. Today, Aerodyne has grown rapidly to become the largest drone service provider in the world. Hence, to further encourage the involvement of local players in this industry, a matching grant of RM100 million will be provided to Bumiputera SMEs to explore business opportunities in the aerospace segment.
171. To increase productivity via automation, the government will allocate RM100 million to provide Smart Automation matching grants to 200 companies in the manufacturing and services sector to automate their business processes.
172. The government will also extend the Additional Reinvestment Allowance (or RA) for two years for existing companies in Malaysia that have exhausted their RA and Special RA eligibility. This extension will bring the cumulative Additional RA period to 5 years. This is among the suggestions received from the Special Task Force to Facilitate Business or Pemudah, which was considered for Budget 2022. The government will continue to study similar suggestions to improve the ease of doing business to drive investments.
173. In developing more Halal MSMEs that are able to compete internationally, RM25 million is allocated to the Halal Development Corporation to execute various programmes including the MSME Halal Product Digital Branding and the MSME Halal Product Marketability programme.
Initiative 2: Science, Technology and Innovation
Datuk Speaker Sir,
174. The Government will allocate RM423 million under Mosti and KPT to intensify R&D activities in applying new innovations in line with the development of science and technology. This allocation includes RM295 million to public universities for research and innovation as well as to encourage industry collaborations.
175. Besides that, the government will also prepare an allocation of RM12 million via matching grants through Collaborative Research in Engineering, Science and Technology in areas such as Gallium Nitride for application in LEDs and electric vehicles. These R&D focus areas were recommended by Mr Tan from Clarion Malaysia in my previous dialogue session with Electrical and Electronics industry figures.
176. An amount of RM30 million will be prepared to implement the Innovation Hub: Industrial Revolution 4.0 under Technology Park Malaysia as an innovation ecosystem one-stop centre with the development of new emerging technology clusters such as drones, robotics and autonomous vehicles. This hub is expected to benefit and provide exposure to 10,000 potential entrepreneurs.
177. As an example of a successful start-up story, Madam Goh Ai Ching from Penang received a Cradle Fund grant and founded Piktochart, a company that provides visual communication services through attractive infographics. Piktochart has successfully penetrated the international market, servicing clients including the US government and Disney. The infographics displayed on the screen before you are also prepared using Piktochart software.
178. To encourage more success stories such as Piktochart, Cradle Fund as the startup ecosystem coordinating agency will be allocated RM20 million to intensify recovery efforts and build the resilience of the start-up economy. In line with the aim of the Malaysia Digital Economy Blueprint, the MyStartup strategy will be executed in phases to benefit over 2,500 companies and create 5,000 job opportunities.
179. The government will also allocate RM45 million as a technological transformation incentive for SMEs as well as mid-stage companies in the manufacturing and services sectors, in line with Industrial Revolution 4.0 or Industry4WRD.
180. To further boost innovation, the national regulatory sandbox under the MoF’s Futurise will be further enhanced to conduct industry studies and recommend measures to facilitate innovation in the community and improve the ease-of-doing-business.
Initiative 3: Perkukuh Pelaburan Rakyat Initiative (Perkukuh)
Datuk Speaker Sir,
181. GLCs play an important role as deployers of human and financial capital as well as catalysts of national economic transformation. This year, GLCs have contributed significantly to the nation’s recovery agenda such as by distributing laptops to 150,000 students under Tabung Cerdik and providing job opportunities through the MySTEP programme. For the year 2022, GLCs will continue to play an important role in driving the nation’s recovery.
Among the key initiatives that will be executed include:
First: JALINAN GLC: MEMPERKASA PMKS initiative to help entrepreneurs through initiatives such as consultation services and financial support with a collective allocation of RM5 billion;
Second: JALINAN GLC CSR: SEJAHTERA RAKYAT initiative to assist the rakyat through initiatives such as medical device donations and scholarship programmes with a collective allocation of RM500 million;
Third: Accelerate payments to vendors up to a maximum of 14 days from invoice confirmation date;
Fourth: Ensure that 40% of local procurements are awarded to Bumiputera entrepreneurs;
Fifth: Offer 30,000 job opportunities under the MySTEP and PROTEGÉ programmes; and,
Sixth: Increase volunteering efforts among GLCs.
182. In building resilience, GLCs will continue to invest in areas including renewable energy, supply chain modernisation and 5G infrastructure. Collectively, at least RM30 billion will be allocated for capital expenditure and investments next year.
183. Through the Perkukuh Pelaburan Rakyat programme (Perkukuh), it is our hope that GLCs will be more resilient with better growth prospects. For example, Khazanah Nasional Bhd has prepared an Impact Fund amounting to RM6 billion as a catalyst towards the growth of new high value industries.
Strategy 3: Recovery for targeted sectors
Datuk Speaker Sir,
184. For the third strategy, the government is committed to rehabilitating and catalysing the reform of several targeted sectors such as the tourism, creative, retail, agriculture and commodity industries so that they will be able to resume operations at maximum capacity.
Initiative 1: Tourism Industry
185. The tourism sector is one of the industries severely impacted by the Covid-19 pandemic. Among those affected during this period was Mr Jasni Amir, managing director of a travel agency, which focuses on haj and umrah packages. Due to this pandemic and the closure of international borders, Mr Jasni’s company was unable to fully operate. His company relies on government assistance, particularly the Wage Subsidy Programme, to retain its employees as well as reschedule loans to reduce the company’s financial commitment.
186. To assist parties like Mr Jasni, several key initiatives with a total value of RM1.6 billion will be implemented next year including:
First: The implementation of the Wage Subsidy Programme (WSP) targeted for the tourism industry players. The government will continue the WSP initiative specifically for tour operators whom experienced decline in revenue of at least 30%. With an allocation of RM600 million, this initiative will benefit more than 26,000 employers and 330 thousand employees;
Second: Specific financing for the tourism sector of RM600 million under Penjana Tourism Financing and BPMB Rehabilitation Scheme;
Third: Special assistance to more than 20,000 tour operators registered under the Tourism, Arts and Culture Ministry for a period of three months with an allocation of RM85 million;
Fourth: Maintenance of tourism infrastructure with an allocation of RM50 million including the Sultan Abdul Samad Building and Lembah Bujang in Kedah;
Fifth: Granting of matching grants for repair purposes to 738 budget hotels registered under Motac as well as repair grants for registered home stay owners with an allocation of RM30 million;
Sixth: Granting of matching grants to companies who organise programmes related to arts and culture with an allocation of RM50 million; and,
Seventh: Incentive fund for the purpose of promotional activities as well as domestic tourism with an allocation of RM60 million.
187. Special individual income tax relief for domestic tourism expenses up to RM1,000 be extended until year of assessment 2022.
We should enjoy the beauty and diversity of tourist destinations from the jungle eco park at Taman Eko Rimba Bukit Ayer in Perlis, historical heritage in Kota A Famosa Melaka, beach Teluk Cempedak in Pahang, Kampung Budaya in Kota Kinabalu and Gunung Santubong in Sarawak.
188. The government will intensify efforts to revitalise the international health tourism industry at an immediate pace to strengthen Malaysia’s position as a preferred health tourism destination with an allocation of RM20 million to the Malaysia Healthcare Travel Council.
189. The government also proposes to extend several tax incentives including income tax exemption for organisers of arts and cultural activities as well as international sports and recreational competitions until the year of assessment 2025.
190. Exemption on entertainment duty for entertainment activities in all Federal Territories until December 31, 2022. State authorities are similarly advised to provide duty exemption on entertainment activities to support the recovery of this sector.
Initiative 2: Creative Industry
Datuk Speaker Sir,
191. In reviving the creative industry’s activities, agencies such as Finas, Cendana and MyCreative Ventures will intensify various initiatives. A total of RM188 million is provided to continue initiatives such as the Digital Content Fund, Digital Multimedia Content project, Film Incentive, Perkasa Modal Insan Programme and Socso protection for artists.
192. In addition, the government next year will make the Progra Riuh Keluarga Malaysia a success through an investment loan matching fund amounting to RM20 million. The move is expected to provide 5,000 new job opportunities.
193. Household names such as Upin and Ipin, Agent Ali and Boboboi are famous not only in the country but also across the globe. To bring more local animation to the international stage, the government has allocated RM30 million through the Investment Loan Matching Scheme for the National Animation Platform initiative, which will be operated by MyCreative Ventures.
Initiative 3: Retail Industry
Datuk Speaker Sir,
194. The retail industry is also among those severely affected by the pandemic. For 2022, special focus will be given to help local social enterprises, halal, handicraft, agricultural and entrepreneurial enterprises to switch to digital services. Looking at the success of the Shop Malaysia Online and Go-eCommerce Onboarding campaigns, which have benefited more than 500 thousand local entrepreneurs, the government will continue this programme with an allocation of RM250 million.
195. Micro SME entrepreneurs are eligible to receive benefits of up to RM2,000 for e-commerce implementation activities, training in marketing and digital payments. As an initiative to support the recovery of the tourism sector, the government encourages the use of Shop Malaysia Online vouchers at business premises and for the purchase of tickets in tourist attractions such as zoos and theme parks.
196. To boost the production and purchase of local products, the government is committed to implementing initiatives to support local handicrafts and natural resources through the Buy Made in Malaysia Campaign, Malaysian Sales Programme and Khazanah Alam Industry Direct Selling Programme with an allocation of RM33 million.
197. I am sure many of us have bought the Putu Bambu World sold at rest areas and highway stops. Its founder, Encik Mohamad Hassan, started with just a small stall in 2008 and with handwritten cardboard signages. Today, the number of Putu Bambu World franchises have reached 70 branches nationwide. To those who are interested in becoming franchise entrepreneurs, the government through Pernas will provide RM74 million, among others, to provide training programmes and business guidance and a simple zero-financing scheme for the first six months together with a moratorium.
Initiative 4: Agriculture Industry, Food Security and Commodities
Datuk Speaker Sir,
198. The government will continue to drive modernisation in the agricultural sector in improving food security and safety by increasing productivity, generating higher incomes and attracting more young generations of agropreneurs.
199. The granting of subsidies and incentives for the agriculture and fisheries industry will be continued with an allocation of RM1.7 billion of which RM1.5 billion will be allocated for seed, fertiliser, price and padi production subsidies including huma padi fertiliser subsidy of RM40 million. Incentives for fishermen’s catch are also provided amounting to RM150 million.
200. For 2022, initiatives to increase food security amounting to RM120 million will be implemented as follows:
First: Various food security projects involving various states, including the development of the aquaculture industry and shellfish estates in Johor;
Second: National Food Security Strengthening Programme to provide logistics facilities and storage centres for high-tech food supplies and fresh agricultural produce for farmers and agro-food entrepreneurs;
Third: Ruminant Feed Incentive Assistance Programme through the subsidised price scheme for palm oil bran to enable small ruminant farmers to obtain a supply of feed at cheaper prices in line with the concept of cyclical economy; and,
Fourth: SME Techno Entrepreneur Incentive Programme to increase crop production and food processing through the application of technology for the benefit of 140 agri-entrepreneurs as well as the programme.
201. In an effort to increase agricultural areas and provide opportunities for the low-income group and youths including for graduates in generating income, it is proposed that idle and undeveloped land owned by the federal government and Malay Reserve land be leased for agricultural or business projects. Through this initiative, the lands can also be managed optimally and in an orderly manner.
202. As a complement, a financing programme of up to RM1.25 billion will be provided by Agrobank and BNM through, among others, the AgroFood Facility amounting to RM500 million and the AgroFood Financing Fund amounting to RM200 million.
Datuk Speaker Sir,
203. The government will allocate RM2.5 billion for 2022 to further strengthen the development of rural communities through commodity development programmes. Of this amount, RM1.3 billion will be channelled to Felda for the purpose of rehabilitation and development package for settlers, RM495 million for the benefit of Felcra participants and RM699 million for the development of smallholder farmers in the rubber industry under Risda.
204. The government will implement the National Rubber Industry Transformation Programme aimed at uniting smallholder farmers, rubber entrepreneurs and small cooperatives in a larger consortium, to be able to process rubber scrap into rubber creeps.
205. To help improve the socio-economic status of B40 smallholder farmers, the government will introduce and expand the use of RRIM Hydrobest technology to smallholder farmers through a matching grant of RM15 million.
206. The government also agreed to continue the Monsoon Season Assistance to help ease the living burden of 320,000 smallholder farmers who lost income during the monsoon season with an allocation of RM190 million.
207. The government will also provide takaful coverage to all PPK farmer members throughout Malaysia under the Farmers Smart Card Takaful Protection Scheme with an allocation of RM5 million.
208. Furthermore, to support the oil palm industry, the government has allocated RM35 million to implement the Smallholder Farmers’ Oil Palm Replanting Stimulus Scheme and RM20 million to address the anti-palm oil campaign at the international level.
209. Finally, for next year, the government has agreed to increase the windfall levy threshold value for palm oil from RM2,500 to RM3,000 for Peninsular Malaysia and from RM3,000 to RM3,500 for Sabah and Sarawak. Meanwhile, the Sabah and Sarawak levy rates are adjusted to 3% similar to the levy rates in the Peninsula.
Third Focus: A Prosperous and Sustainable Economy
Datuk Speaker Sir,
210. The third focus is on a prosperous and sustainable economy. The government is committed to strengthen its development agenda so that growth remains sustainable and inclusive. Besides that, Budget 2022 will continue to support the implementation of the 12th Malaysia Plan, which prioritises three themes namely economic rejuvenation, prosperity and inclusivity, and sustainability, towards a prosperous “Keluarga Malaysia”. Under this focus, emphasis will be given to the sustainability agenda, bridging economic gaps, fiscal consolidation and revenue sustainability as well as supporting public service delivery.
Strategy 1: Sustainability Agenda
211. The first strategy under the third focus is to strengthen the nation’s sustainability agenda. We are committed to meet the Sustainable Development Goals (SDGs) and the annual budget formulation is now being aligned to the 17 SDGs. In addition, this year’s and subsequent years’ Budgets will also be aligned to green budgeting to enable movement towards the implementation of environmentally friendly development projects and programmes.
Initiative 1: Low Carbon Practice
212. Climate change is a global issue and its impact is as severe as the pandemic we are experiencing today.
213. Recently, YAB prime minister has expressed commitment to make Malaysia a carbon neutral country as early as 2050. This commitment requires the country to drive reforms so that growth remains sustainable and competitive in the global market.
214. To meet the carbon neutral target, the Voluntary Carbon Market (or VCM) initiative will be launched under the advocacy of Bursa Malaysia. This initiative acts as a voluntary platform for carbon credit trading between green asset owners and other entities transitioning towards low-carbon practices.
215. On the other hand, to help SMEs adopt sustainable and low carbon practices such as by increasing the use of sustainable raw materials and renewable energy, BNM will provide a low carbon transition facility with a fund value of RM1 billion which will be based on matching fund arrangement with participating financial institutions.
216. The government sees the potential of electric vehicles (or EVs) with energy efficient vehicle (or EEV) features as means to minimise vehicle smoke pollution in the atmosphere. To support the development of the local EV industry, the government proposes to provide import duty, excise duty and sales tax exemptions on EVs.
Road tax exemptions of up to 100% will also be given to the vehicle owners. Additionally, individual income tax reliefs of up to RM2,500 will be given for the purchase and installation, rental and hirepurchase of EV charging facilities as well as payment of EV charging facility subscription fees.
Initiative 2: Environment and Biodiversity
Datuk Speaker Sir,
217. The beauty of our natural environment and diverse biodiversity are our nation’s most priceless treasures. For 2022, the government will provide RM450 million to various ministries to implement several initiatives as follows:
First: Nature conservation projects such as the Penang Hill Biosphere Reserve and Tasik Chini Reserve as well as nature conservation projects to address coastal erosion in Pantai Merdeka, Kedah and to overcome floods in Melaka;
Second: Programmes to empower the involvement of local communities, army veterans and Orang Asli such as the Jahai tribe, as biodiversity guardians of forest areas through the additional recruitment of up to 1,000 patrollers;
Third: Assistance for zoo operating costs, efforts to increase the breeding of Malayan tigers and implementation of the frozen zoo programme to preserve the survival of endangered species;
Fourth: The 100 million Tree Planting Campaign with a target of 20 million trees a year; and,
Fifth: Grants to support the role of the World Wildlife Fund (WWF) and All-Party Parliamentary Group Malaysia (APPGM) as well as environmental partners.
218. To institutionalise the implementation of Ecological Fiscal Transfer (EFT) for the conservation of biodiversity, RM70 million of EFT will be allocated every year to all states and the EFT implementation mechanism will be strengthened through outcomebased ecological criteria.
Initiative 3: Community Empowerment
Datuk Speaker Sir,
219. Since the pandemic began, various parties especially NGOs, GLCs, social enterprises and communities have played an effective role as field agents to support the government’s efforts to develop the socio-economics of the people. This year, the government together with Yayasan Hasanah has funded various initiatives for the vulnerable.
220. One recipient of the Hasanah Special Grant is Earth Heir, which is a social enterprise that promotes eco-friendly craft items produced by the local community. The founder of Earth Heir, Miss Sasibai Kimis is determined to help these craft producers grow their income sustainably. Earth Heir and the Dusun Minokok tribe in Sabah have teamed up to produce the very bag I am using to carry the 2022 Budget speech today.
221. For next year, a total of RM100 million will continue to be provided in the form of a matching grant with the contribution of GLC-owned foundations to NGOs to fund various social programmes assisting the vulnerable in terms of education, income generation and mental health.
222. At the same time, to ensure social enterprises such as Earth Heir continue to grow and help their target groups, the government proposes to provide tax exemptions on all social enterprise income for a period of up to three years of assessment subject to the validity period of Social Enterprise Accreditation from the Joint Committee on Accreditation of the Yayasan Hasanah and Entrepreneur Development and Cooperatives Ministry.
223. The Government Social Impact Procurement Programme was previously introduced on a pilot basis with the aim of increasing the opportunities for social enterprises to participate in government procurements. Starting next year, this initiative will be extended to all ministries.
224. Moreover, the government will also allocate RM14 million to the United Nations Development Programme to support their efforts in conducting various initiatives such as creating safe tourism and restoration activities in Mersing, Johor and Manjung, Perak.
225. Lastly, as an encouragement to civil servants to participate in and contribute via community service, a maximum of fivev days of unrecorded leave per year will be allowed under approved organisations.
Initiative 4: Sustainability Sukuk
Datuk Speaker Sir,
226. Malaysia is committed to fulfil its obligations as a signatory to the Paris Agreement. Last April, the government successfully issued the world’s first sovereign sustainability sukuk through an issuance of US$800 million. The sukuk has been oversubscribed by over 5.6 times which reflects investor confidence in the country. For next year, the government will issue sustainability sukuk denominated in ringgit Malaysia of up to RM10 billion to be channelled to eligible social or environmentally friendly projects.
Strategy 2: Bridging the Economic Gap
Datuk Speaker Sir,
227. The second strategy is to bridge the economic gap across dimensions. The year 2022 will also focus on efforts to implement major national projects that are able to provide economic benefits to the local population as well as bridge the economic gap between localities.
Initiative 1: Development Projects for Recovery
228. To ensure that efforts to stimulate economic recovery are intensified, the government will continue the implementation of national infrastructure development projects worth RM3.5 billion such as the construction of the Pan Borneo Highway and Central Spine Road.
229. To further boost high-impact infrastructure development activities through public-private partnerships, the government has allocated an initial fund of RM200 million through the creation of the Infrastructure Facilitation Fund 3.0 under the supervision of the Public Private Partnership Unit, Prime Minister’s Office.
230. Furthermore, the government will also continue to implement small and medium sized projects worth RM2.9 billion earmarked for contractors in Class G1 to G4 nationwide. This allocation will, among others, encompass road maintenance projects, aging infrastructure and facilities upkeep for public universities, polytechnics and community colleges as well as other projects that involve rural social amenities.
Initiative 2: Inter-Regional Development
Datuk Speaker Sir,
231. Balancing development between states and regions is important to ensure all Keluarga Malaysia members enjoy the fruits of development. For the five regional economic development corridors, development projects will be continued with an allocation of RM690 million comprising six new projects and 66 extension projects such as the Smart Agriculture project in Igan, Sarawak.
232. The government will also assist the state governments in enhancing economic development of the states. In this regard, a special allocation of RM260 million, or RM20 million for each state, will be provided to focus on projects relating to food security, tourism and environmental preservation and conservation.
233. Next, Sabah and Sarawak will receive an increase in development expenditure allocation worth RM5.2 billion and RM4.6 billion, respectively. These allocations are for, among others, implementation of water, electricity, and road infrastructure projects, as well as for education and health facilities.
234. Mobile banking efforts that started in Sarawak this year, such as in Pekan Sungai Asap, Belaga, has received encouraging responses. Rural residents come in large numbers to use the mobile banking services provided by BSN. Recently, this service has also been extended to Sabah on the efforts of Yang Berhormat Sipitang.
Next year, an additional 20 mobile banks are expected to begin operating, covering 250 rural areas and counties, mainly in Sabah and Sarawak.
Initiative 3: Digital Connectivity Projects
Datuk Speaker Sir,
235. In providing the latest broadband facilities to Keluarga Malaysia, the implementation of the National Digital Network initiative, (Jendela) will be further intensified. For 2022, the government has provided RM700 million to continue digital connectivity efforts in 47 industrial areas and 630 schools, especially those in rural areas.
236. To ensure that the residents in PPRs are not left behind, the government has also allocated RM30 million to provide internet facilities in 40 existing PPRs.
237. The 5G services will sketch a new technological landscape and offer a better and faster user experience. In addition, it also bridges the digital gap and creates new jobs. For 2022, 5G services will be expanded to 36% of high-density areas including in major cities in Johor, Selangor, Penang, Sabah and Sarawak.
238. To increase digital adoption among SMEs, the government will enhance the SME Digitisation Grant Scheme initiative. For 2022, the total funding for this scheme has been increased to RM200 million with RM50 million dedicated towards Bumiputera microentrepreneurs in rural areas.
239. To further intensify the transformation of business digitisation among rural entrepreneurs, the Malaysian Communications and Multimedia Commission will also transform 600 Keluarga Malaysia Digital Economy Centres into One-Stop Centres to guide microentrepreneurs in using digital technology.
240. Digital nomads are those who generate income online without a fixed physical location. This group has the potential to contribute to the national economy, especially as tourists. To capitalise on this development, the government will introduce the Malaysia Digital Nomad programme to create a digital nomad community and ecosystem in Malaysia by using the tourism sector as a catalyst.
Strategy 3: Fiscal Consolidation and Revenue Sustainability
Datuk Speaker Sir,
241. The government has had to navigate through the Covid-19 crisis with limited fiscal space given that the economy has yet to fully recover and revenue collection is affected. Consequently, the government has depended on non-tax revenue while increasing the statutory debt in order to ensure that the various economic aid and stimulus packages, alongside development projects, can continue.
For 2022, which is expected to be the year of recovery, we will commence reformation and fiscal strengthening in order to rebuild the country’s fiscal resilience in preparation to face future challenges.
Initiative 1: Fiscal Responsibility Act (FRA)
242. For the first initiative, the government wishes to introduce the Fiscal Responsibility Act (FRA), which aims to improve governance, accountability and transparency in the country’s fiscal management as a way to ensure fiscal sustainability and to support for macroeconomics stability.
243. As I have mentioned before, the Public Consultation Paper on the Fiscal Responsibility Act has been published and all constructive feedback will be considered to enhance the draft that is under way. The government proposes to table this Act in 2022.
244. Besides that, the government is also collaborating with the World Bank in conducting the Public Expenditure Review in order to ensure efficiency and effectiveness of public spending without undermining public service delivery. With that, the government hopes to improve the productivity in public spending in order to optimise every ringgit of the rakyat’s money.
Initiative 2: Revenue Sustainability Measures
245. The second initiative is a revenue sustainability measure and in line with international regulations, the government proposes to provide equitable tax treatment as below:
First: where the rate of stamp duty on contract notes be increased from 0.1% to 0.15% and the stamp duty limit of RM200 for each related contract note is abolished and at the same time, brokerage services related to the trading of shares listed on Bursa Malaysia be exempted;
Second: where income tax be imposed to residents in Malaysia on income derived from foreign sources and received in Malaysia from January 1, 2022.
Third: where sales tax be imposed on goods not exceeding RM500 from abroad sold online by seller and sent to consumers in Malaysia via air courier service.
Fourth: where service tax be imposed on goods delivery services provided by delivery service providers including e-commerce platform. However, food and beverages delivery services and logistic services are excluded.
Fifth: where a Special Voluntary Disclosure Programme be introduced by the Royal Malaysian Customs Department will be introduced in phases with a penalty remission incentive of 100% for the first phase and a penalty remission of 50% for the second phase. Tax remission will also be considered for certain cases;
Sixth: where the Tax Compliance Certificate issued by the Inland Revenue Board Malaysia be made as part of pre-requisite for companies to participate in government procurement beginning January 1, 2023; and,
Seventh: where the implementation of the tax identification number (TIN) be implemented beginning 2022 to broaden the income tax base.
246. In order to improve fiscal discipline and transparency while complementing the Medium-Term Revenue Strategy and the ongoing tax Incentive study, a tax expenditure statement will be published. This is crucial in determining the costs incurred by the government in providing tax incentives, one-off exemptions and other tax policies.
Datuk Speaker Sir,
247. Following the Covid-19 pandemic crisis, there is an increasing need to help affected rakyat. In ensuring that the health system is more resilient in facing future threats, the government proposes to introduce a one-off special windfall tax to the companies that generate extraordinary revenue. The tax, known as Cukai Makmur, companies with chargeable income up to the first RM100 million will be subjected to income tax at a rate of 24% while the remaining chargeable income will be subject to income tax at the rate of 33% for the year of assessment 2022.
Strategy 4: Supporting Public Delivery Service
Datuk Speaker Sir,
248. The public service continues to be our main support in managing the Covid-19 pandemic. The government sincerely appreciates the support and sacrifice of every public servant in implementing various programmes and projects as well as all the economic aid and stimulus packages announced so far. The fourth strategy under the third focus is continued support for public service delivery. Government efforts to provide service with integrity and ensuring tranparency in governance will continue to be enhanced so that the best service is delivered to the rakyat.
Initiative 1: Reforming Service Delivery
249. To spur the digital transformation in government services, the MyDigital initiative was launched on February 19, 2021. In 2022, the National Digital Identity project, an identity verification platform, will be implemented to enhance connectivity between all kinds of transaction systems in order to ease and encourage safe digital transactions.
250. Besides that, MyDigital also targets for 80% of government services to utilise cloud storage by 2022. Hence, the Digital First Programme initiative will be introduced to encourage the usage of cloud computing in the public sector. Indirectly, this initiative will minimise the need for physical storage and cultivate a paperless culture.
251. Back in the days, the rakyat had to walk-in to government counters and offices when services were needed. Now, various efforts have been implemented as part of government’s commitment to ensure that the rakyat is able to gain fast access to government services, including through mobile clinics, mobile Covid-19 vaccination administration and mobile banks.
252. For the next year, the government will also expand mobile clinic services administered by University Teaching Hospitals in an effort to increase the health screenings and health education access in targeted localities. To further facilitate public access especially in rural areas, JPJ will also provide 20 Mobile JPJ counters.
253. To continue providing government services outside of office hours, 100 kiosks with complete computer facilities will also be available at UTCs across the country to better allow the public’s access to JPJ’s online services such as renewing driver’s licence.
Initiative 2: Government servants’ welfare
Datuk Speaker Sir,
254. Ever since Covid-19 started to invade and permeate throughout our nation, the government servants have been steadfast in nursing our nation back to health, working tirelessly to keep the family intact. In the process of overcoming this grievous episode, the frontliners together with the volunteers have toiled tremendously together and successfully carried out the government’s agenda effectively. Thank you, thank you and thank you to all.
255. For the next year, the government plans to further enhance the benefits and welfare for government servants as follows:
First: To reduce the profit rate of computer and smartphone loan financing services for government servants from 4% to 2%;
Second: To allocate RM365 million for the repairs and maintenance of quarters and buildings under the supervision of the Property Management Division;
Third: To continue the Personal Accident Protection Scheme initiative up to RM100,000 to an estimated 40,000 new borrowers of the Public Sector Home Financing Board (LPPSA). The scope of this protection scheme will also be expanded with an additional three new protections which includes short term and permanent partial disability, partial and full, Haji by proxy and recovery cost for injuries sustained due to accidents;
Fourth: To increase the payment rate of Inmates Monitoring Incentive from RM150 to RM200 per month, which will benefit more than 14,000 prison officers. Additionally, this allowance will also be extended to 775 cadre officers at prisons that are involved in inmates’ supervision;
Fifth: To increase the assignment allowance of the Police Volunteer Reserve (PVR) from RM7.80 to RM9.80 per hour; and RM6 to RM8 per hour for members. The increment is expected to benefit around 10,000 PVR; and,
Sixth: As a sign of appreciation, RM200 incentive payment will be given to the Pembantu Pembangunan Masyarakat Gred S19 and Pembantu Perawatan Kebajikan Gred U11 dan U14 that are stationed at 25 welfare institutions for their services and sacrifices in tending and taking care of senior citizens, OKUs and patients with mental health issues.
256. During the Covid-19 crisis, a large number of government servants, especially the frontliners continue to be committed to their duties where they do not have the chance to take some time off. The government recognises the sacrifices made, and I am pleased to announce that the maximum number of days for gantian cuti rehat (GCR) has been increased from 150 to 160 days.
Furthermore, the government will also allow early GCR redemption up to 50% or 80 days, depending on the requirements. This initiative was proposed in consideration of those who might need to perform their haj pilgrimage or to provide for their children’s higher education.
257. To appreciate the effort and sacrifice of the civil servants in carrying out their responsibilities for the rakyat especially during such a tumultuous time for the country, the government is pleased to announce a special financial assistance to 1.3 million civil servants Grade 56 and below of RM700 and to one million government retirees of RM350, costing a total of RM1.3 billion. It is hoped that this assistance will motivate the civil servants to continue serving with utmost dedication.
258. All initiatives presented today would have no meaning if the implementation does not reach all of you as Keluarga Malaysia, effectively and efficiently. To that end, Yang Amat Berhormat prime minister will chair an oversight committee which is coordinated by the Finance Ministry towards ensuring that all Budget 2022 measures achieve the intended objectives successfully.
Conclusion
Datuk Speaker Sir, members of the House, brothers and sisters of our Keluarga Malaysia.
259. We have now come to the end of the tabling of the Budget.
Hampir usai amanah yang diberikan, berlabuh kita di muara senja, sauh sudah labuh, pendayung sudah sandar, mualim tak sabar menanti jeda.
May we hold on to the wisdom contained in Verse 32, Surah Al-Qalam (of the Holy Quran) – after giving all our efforts, we must submit to the will of the All Might, and may Allah subhannahu wa ta’ala bless us with that which is better than today.
But, know this… the fight against this pandemic is not yet over.
The plight of the rakyat is still felt, our frontliners have not returned to their loved ones, the war is still raging out there.
But we are almost on the verge of victory, rest assured, we are almost there.
Therefore, in this August house, I urge my fellow Yang Berhormats to support this Budget.
Within you voices there is wisdom: protecting lives, giving us strength… against the enemy, and against this pandemic.
Belanjawan ini – bersama kita tempa kukuh bagai waja, besi jadi kersani.
Belanjawan ini – perisai pelindung Keluarga kita, dari sasana bahaya ke puncak jaya, dari Dewan Mulia ini, berikanlah rakyat kita, khabar yang baik-baik belaka: bahawa Bajet ini... milik mereka, suara kita... milik mereka, bahawa kemenangan itu... milik mereka!
Wabillahi Taufik Wal Hidayah Wassalamualaikum
Warahmatullahi Wabarakatuh.
260. Datuk Speaker Sir, I beg to propose. – The Vibes, October 29, 2021
Datuk Seri Tengku Zafrul Tengku Abdul Aziz is finance minister
