Missed the tabling of the revised Budget 2024 earlier today? Here are some of the key takeaways. For more, visit https://theedgemalaysia.com/budget/2024/ or get a copy of the latest edition of The Edge Weekly.
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00:00 [Music]
00:04 Prime Minister Datuk Sri Anwar Ibrahim has unveiled Malaysia's annual spending plan
00:08 for next year, the country's largest supply bill tabled yet.
00:12 In his speech, he said that it will have three thrusts,
00:15 delivering reforms to enhance governance and public delivery system,
00:18 transforming the economy and businesses, and elevating the well-being of the rakyat.
00:24 Here are some of the key economic highlights for Budget 2024.
00:28 The government is planning to spend RM393.8 billion.
00:32 Though higher than the RM388.1 billion initially allocated for 2023,
00:38 the figure is lower than last year's revised figure of RM397.1 billion.
00:44 A record RM303.8 billion will be set aside for OPEX and RM90 billion for development spending.
00:51 Meanwhile, revenue is seen coming in at RM307.6 billion.
00:55 Economic growth is seen growing at between 4 and 5 percent.
00:59 Headline inflation is at 2.1 to 3.6 percent,
01:03 while the jobless rate is expected to improve to 3.4 percent.
01:06 Fiscal deficit is projected at 4.3 percent of GDP.
01:10 And now, some of the key takeaways of Budget 2024.
01:14 [Music]
01:19 Given the optics and repeated insistences from his administration,
01:22 that reforms to Putrajaya's fiscal health has now become crucial rather than simply necessary,
01:28 it is no surprise that Budget 2024 would include belt-tightening in the form of subsidy cuts.
01:34 While it was reported before, ANWR made it official
01:37 that targeted subsidies will be implemented in phases next year.
01:41 For 2024, the government has made available RM58.1 billion in various subsidies,
01:47 incentives and aids, where almost 50 percent is for cost control for the public.
01:52 PM pointed out that the government's earlier implementation of a targeted subsidy for electricity,
01:58 where the heavier users, around 10 percent, were no longer subsidised,
02:02 had managed to save the government over RM4.6 billion this year.
02:05 This approach will be further improved according to consumption level going forward.
02:10 While petrol wasn't mentioned, ANWR announced that diesel subsidies would be rationalised in stages,
02:15 revealing that the government currently pays RM1.60 to keep the price at RM2.15.
02:20 He calls it a proactive move to combat wastage and smuggling.
02:25 However, logistics companies and certain groups will continue to have access to subsidised diesel.
02:30 He also announced the lifting of price controls for chickens and eggs,
02:34 allowing prices to float in order to ensure a sufficient supply for the market.
02:39 The government will then channel these savings to boost cash assistance
02:43 through the Rahma Cash Contribution or Sumbangan Tunai Rahma,
02:47 increasing the allocation from RM8 billion to RM10 billion.
02:50 The hardcore poor will also continue to have their electricity subsidised,
02:54 with Putrajaya providing an additional RM55 million rebate for 142,000 households at RM40 per month.
03:02 But there is no such thing as a free lunch, and this is where the higher taxes come in.
03:07 The headline being the higher service tax, which will be increased from 6 to 8 percent.
03:13 While doing this can be seen as the government's attempt to sidestep implementing the hugely unpopular GST,
03:19 Putrajaya increased the scope to include logistics services, brokerage and underwriting, as well as karaoke.
03:26 However, Adwas said that it would exclude F&B and telecommunications,
03:29 softening the cost of living blow somewhat.
03:32 The luxury goods tax has also been set at between 5 to 10 percent,
03:36 and will be imposed on items such as jewellery and watches beyond a certain price threshold.
03:41 The excise duty on premixed sugary beverages will be increased from 40 cent per litre to 50 cent per litre.
03:48 Budget 2024 did include some efforts to bring up the rakyat in terms of skills.
03:54 The tax relief of up to RM2,000 for the fees of skills courses or self-improvement courses
04:00 will be extended up to the 2026 assessment year.
04:04 The scope will also be expanded to include courses such as photography, language and sewing.
04:10 Finally, in order to help more Malaysians manage their retirement funds,
04:14 BM announced the creation of a flexible EPF account, where contributors can access it at any time.
04:20 Still on taxes, the government is planning a 10% capital gains tax
04:29 on the disposal of non-listed shares by corporate shareholders beginning March.
04:34 It is, however, considering exemption for share transactions tied to IPOs,
04:39 internal restructuring and venture capital.
04:41 Meanwhile, the IRB will implement mandatory e-invoicing on taxpayers,
04:46 with annual income exceeding RM100 million from next August.
04:50 The same will be enforced by other income categories by July 2025.
04:55 Also in the works, a global minimum tax for companies with global revenue
04:59 of at least €750 million in 2025.
05:03 The government is also looking to continue the tax exemption for fund management companies
05:08 managing SRI funds and tax deduction on SRI suko issuance costs until assessment year 2027.
05:16 It's also extending tax incentives for angel investors until end 2026.
05:21 Also, the MOF, IRB and Petronas are studying tax incentives for carbon capture and storage
05:27 and hydrogen sulphide projects.
05:29 The government is also proposing to make Pengerang Integrated Petroleum Complex
05:34 a development hub of the chemical and petrochemical sector
05:38 and will look at rolling out tax incentives.
05:41 To encourage companies to invest in high-growth and high-value areas,
05:45 it's looking at a tiered reinvestment tax incentive
05:48 in the form of an investment tax allowance of 70 to 100%.
05:53 GLICs will provide up to $1.5 billion to encourage startups to venture into these fields
05:59 via BNM, BSN and Tekun, financial facilities amounting to RM2.4 billion
06:05 to be made available to MSMEs.
06:08 Assistance will also be provided to businesses in the form of training.
06:12 HRD Corp will utilise RM1.6 billion to provide such exercises.
06:17 It will also reallocate 15% of total levy collections
06:21 to implement the Madani training programme for MSMEs and vulnerable groups.
06:26 [Music]
06:31 The annual budget's key priority remains education,
06:34 with MOE receiving the lion's share of RM58.7 billion.
06:39 Of this, some RM2.5 billion will be set aside to build 26 new schools
06:43 and RM1.9 billion will go towards upgrading existing facilities.
06:47 Meanwhile, RM16.3 billion will go to the Ministry of Higher Education.
06:52 For MOH, its allocation is 13.5% higher, at RM41.2 billion,
06:58 the biggest increase among ministries.
07:01 RM5.5 billion will be for medicines and vaccines.
07:04 And to address congestion at state hospitals,
07:07 RM200 billion will be set aside for the outsourcing of patients
07:10 to military, university and private hospitals.
07:14 As for the plantation and commodities sector,
07:16 the government will provide RM2.4 billion to Felda, Felcra and Rizda
07:21 to boost agri-commodity activities and socio-economic development for smallholders.
07:27 To support tourism, 2026 is now Visit Malaysia year.
07:31 Putrajaya is targeting 26.1 million foreign arrivals,
07:34 with visitor spending to reach RM97.6 billion.
07:38 RM350 million will be budgeted for promotional and tourism-related campaigns.
07:44 Also to be introduced, new initiatives under the Malaysia Visa Liberalisation Plan.
07:49 These include the facilitating of approval for employment passes
07:53 for strategic investors in key sectors.
07:56 The government also plans to introduce long-term social visit pass
08:00 for international students who have graduated
08:03 to meet the needs of the industry's skilled workforce.
08:06 Also to improve the visa on arrival, social visit pass and multiple entry visa facilities
08:13 to encourage the influx of tourists and investors, especially from India and China.
08:18 For the electrical and electronics sector,
08:20 the plan is to open a high-tech industrial park in Kuriampera
08:24 to build a wider ecosystem for the E&E cluster in the northern region.
08:29 While 2024's RM90 billion in development expenditure
08:37 is lower than the estimated RM97 billion in 2023,
08:41 Putrajaya will continue to spend on infrastructure,
08:44 but in a way that indicates what areas it will prioritise going forward.
08:49 The administrative capital will serve as a low-carbon city model for the country,
08:54 with government buildings having solar panels installed in partnership
08:57 with TNB and Petronas' RE arm, Jentari.
09:01 Also, the federal government plans to adopt EVs as official vehicles,
09:05 with TNB, Jentari and Tesla investing over RM170 million to build EV charging stations.
09:12 Moving on to East Malaysia, Anwar said that in order to combat electricity supply disruptions,
09:17 the federal government will support the implementation of hybrid solar power generation
09:23 and the construction of an electricity transmission network in Sabah.
09:27 As flooding remains a critical issue exacerbated by climate change,
09:31 Budget 2024 included the implementation of 33 high-priority flood mitigation projects
09:38 throughout the entire country at a cost of RM11.8 billion.
09:43 Another thing to note, the PM also announced an allocation of RM5 million
09:46 to increase the number of canine dogs in police, custom and bomber units,
09:51 with the funds also going to improve their healthcare facilities.
09:55 The federal government is also committing RM1.1 billion to put an end to water supply issues
10:01 in Kelantan, Sabah and Labuan in the form of water treatment plants and replacing old pipes.
10:07 The government is also proposing to take over a few key infrastructure projects.
10:12 It is negotiating with Sarawak to realise the transfer of Bintulu Port
10:16 and the operation of rural air services to the Sarawak State Government.
10:21 Anwar also announced that his administration will take over the previously aborted
10:26 multi-billion GDV Bandar Malaysia project,
10:29 so as to ensure that the land is best utilised for the people based on Medani values.
10:35 And finally, Budget 2024 also places emphasis on roads and transport,
10:40 the literal grease of the wheels of the economy.
10:43 Starting with the tender process for 19 work packages for the Sabah Pan Borneo project,
10:49 involving RM15.7 billion to be completed by November 2023.
10:54 Budget 2024 also revived the construction of five LRT stations that were previously cancelled,
11:00 expected to cost RM4.7 billion.
11:03 The stations are Tropicana, Temasha, Raja Muda, Bukit Raja and Bandar Botanic.
11:08 It will also proceed with the Penang LRT project.
11:12 Syarikat Praserana, the government's public transport manager,
11:15 will add 150 electric buses to its fleet and funds amounting to RM600 million
11:21 to build three bus depots that will support the LRT3 project.
11:25 (Music)