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Abdullah Unveils A Generous Budget For All
 KUALA LUMPUR, Sept 7 (Bernama) -- A Budget for all. That sums up the 2008 Budget unveiled by Prime Minister Datuk Seri Abdullah Ahmad Badawi today, which offers goodies to all segments of the Malaysian population, from kindergarten kids, civil servants and businessmen to senior citizens.
Totalling RM176.9 billion, the generous budget, an increase of 10.9 per cent from this year's, emphasises three main strategies -- enhancing the nation's competitiveness, strengthening human capital development and ensuring the well-being of all Malaysians.
Coming on the heels of the nation's 50th birthday just a week ago, the budget is aimed at countering the increasing cost of living through measures to raise the people's disposable income.
"As we enter the next 50 years, it is important that we leverage on the strength of our diversity and remain united in our quest towards achieving developed nation status," Abdullah, who is also Finance Minister, said when tabling the 2008 Budget in the Dewan Rakyat here.
Themed "Together Building the Nation and Sharing Prosperity", the budget also places weight on infrastructure development, including in Sabah and Sarawak.
The 2008 Budget also provides for a conducive investment climate for the private sector as it wants the nation's corporate tax regime to remain competitive.
To improve the efficiency and simplify the administration of corporate tax, the government will implement a single-tier tax system, effective from the year of assessment 2008, where profits are only taxed at the company level and dividends received are exempted from tax.
"The reduction in corporate tax (the government in the 2007 Budget announced a reduction of corporate tax from 28 per cent to 27 per cent in 2007, 26 per cent in 2008 and 25 per cent in 2005) and the introduction of the single-tier system will enable higher dividends to be distributed to share holders," said Abdullah, who is also Finance Minister.
The prime minister also announced several measures to be adopted by the Special Taskforce to Facilitate Business (Pemudah) in an effort to ensure a conducive environment to attract private investment.
To attract quality human capital, especially professionals and skilled workers, the government will encourage and facilitate the entry of foreign workers who can add value to the nation's economy.
To this end, the Immigration Department will shorten the processing period for the issuance of work permits to seven days for skilled workers, compared with 14 days previously.
A new category of visa for business travellers would also be introduced to provide for a longer validity period, apart from the introduction of other features to facilitate easier entry into the country effective Jan 1, 2008, he said.
Reflecting the importance of good corporate governance, the government would establish a Public Companies Accounting Oversight Board under the Securities Commission to monitor auditors of public listed firms to ensure quality and reliable audited financial statements.
The prime minister also touched on positioning Malaysia as an international financial centre, promoting investments from the Middle-East, the Takaful industry, increasing the competitiveness of Labuan as an Offshore Financial Services Centre and stimulating the property sector.
Not letting-up the push for the agricultural sector, Abdullah said several new sources of growth had been identified in this field, such as the pioneer project of virgin coconut oil processing, commercialising of nira nipah products and breeding of Boer goats.
To encourage the cooperation between bio-technology companies and local universities, Bionexus status companies would be allowed to use the laboratories and reserach facilities at these universities.
To further promote the Multimedia Super Corridor (MSC) internationally, Abdullah said, the government would host the World ICT Week in Kuala Lumpur in May, 2008.
Measures would also be taken to further enhance Cyberjaya's attraction as a major cyber city, able to attract world-class technology companies.
Recognising that the small- and medium-size enterprises (SMEs) may face cash flow constraints at the initial stages of operations, the prime minister said the government would give them flexibility to pay taxes at the end of the financial year instead of monthly instalments for a period off two years from starting operations.
Moving to the second thrust of the budget, the prime minister announced the abolishment of school fees for primary and secondary school students.
On top of this, the government would also provide free textbooks for all school-going children while giving an exemption of examination fees for the Sijil Tinggi Agama Malaysia. Last year the government waived the examination fees for PMR, SPM and STPM.
"With this (free textbooks scheme), 5.7 million students will benefit from this scheme compared with 4.5 million students currently. With these measures, schooling in Malaysia is now completely free," he said, to the thumping of tables by the MPs.
Abdullah said that to ensure that every student had the opportunity to participate in uniformed activities, the government would provide a set of free uniforms each for one activity for students from families with a monthly income of RM1,000 and below.
Recognising the important role of teachers, the prime minister announced an increase in the allowance for special education teachers from RM100 to RM250 per month, a rise in allowance for graduate substitute teachers from RM85 to RM150 per day and an allowance of RM60 per hour for degree holders and RM50 per hour for diploma holders teaching Chinese and Tamil languages in national schools.
Retired teachers, given their expertise and vast experience, can continue to contribute in the field of education. Retired teachers will therefore be recruited to train teachers and serve as substitute teachers," Abdullah said.
To strengthen higher education, a sum of RM12 billion has been provided for the implementation of projects and programmes, including enhancing research and development and commercialisation activities in four research universities and increasing the allocation to Universiti Teknologi Mara to achieve the target of 200,000 students by 2010.
The fund would also be used to upgrade and expand Universiti Malaysia Kelantan, Universiti Darul Iman and Universiti Pertahanan and to rebrand community colleges.
"The government will increase the number of undergraduate students sponsored by the Public Service Department at local universities from 5,000 students to 10,000 annually beginning 2008," Abdullah said.
Taking cognisance of the rising cost of living for students, the government will increase the cost of living allowance by between 23 per cent to 84 per cent to students in local institutions of higher learning, including those attending preparatory and language courses.
The new rates, which will be effective from the first semester of the 2007 session, will benefit more than 90,000 students and effective September 2007, the government hiked the cost of living allowance (Cola) for students in the United States, United Kingdom and Canada by up to 97 per cent, almost double the current rate.
In 2006, the government increased the Cola for students studying in Australia, New Zealand, Egypt and South Korea.
Abdullah also announced that the scope of the Human Resource Development Fund (HRDF) would be expanded to provide greater flexibility for employers to choose training and advanced education programmes for their staff and for this purpose the Human Resource Development Bhd Act would be amended.
In an effort to promote life-long learning, the government would provide tax relief of up to RM5,000 on education fees to be extended to all post-graduate studies, he said.
The prime minister said that to promote the commercialisation of research and development, the rate for royalty payment to researchers would be increased to 80 per cent and the balance, for research institutions.
To ensure an adequate supply of highly skilled workers to meet the demand of the ICT industry, a Knowledge Workers Development Institute would be established in Cyberjaya.
"The MSC Malaysian Digital Animation Centre will be set up in Cyberjaya to support the development of the digital animation industry as well as increase local expertise in the area," Abdullah said.
To establish a knowledge-based economy and narrow the digital divide, the government closely monitored the rollout of broadband by service providers, he said.
Speaking on the last strategy of the 2008 Budget, a total of RM381 million would be allocated for the construction of low-cost houses and from this, RM191 million would be used for the Program Perumahan Rakyat (PPR) Disewa, while the remainder would be allocated for PPR Bersepadu.
He said Syarikat Perumahan Negara would also expedite the construction of housing for the low-income group, which includes the rehabilitation of 6,000 units in abandoned housing projects and the construction of 36,000 units of affordable homes and 4,000 units of Rumah Mesra Rakyat.
"The government recognises the difficulties faced by those without fixed income, such as farmers and small traders, to obtain bank loans to finance the purchase of low- and medium-cost houses.
"As such, the government will establish a fund to provide guarantees to banks which provide loans to this group. For a start, RM50 million is allocated to provide such guarantees to Bank Simpanan Nasional and Bank Islam Bhd effective Jan 1, 2008," said Abdullah.
To ease the burden of loan repayment, the government announced that it would allow EPF contributors to make monthly withdrawals from the balance in Account 2 effective Jan 1, 2008 for the financing of one house.
"This is a major move, which will benefit 5 million active EPF contributors. This scheme will enable contributors to own better houses than they could otherwise afford as well as lessen their monthly financial obligations. This scheme will make available up to RM9.6 billion annually for the purchase of houses," he added.
With 13,000 government quarters expected to be completed in 2008, the government had allocated a sum of RM887 million to build more quarters for civil servants nationwide, he said.
Abdullah also announced several incentives for development of youth and sports and at the same time guaranteed that the government would ensure that the talent and potentials of women would continue to be harnessed.
"In 2008, an allocation of RM782 million is provided to the Ministry of Women, Family and Community Development. Among the programmes and projects to be implemented are skills training and capacity building, particularly single mothers," he said.
Recognising the importance of early education, the government's pre-school education programme would be expanded with the construction of 280 new kindergartens throughout the country with an allocation of RM105 million.
With this, the number of kindergartens will increase to more than 7,600 to accommodate 300,000 children between 4 and 6 years.
On the well-being of senior citizens, the prime minister said that to improve returns on the savings of this group, a RM2 billion bond would be issued by Bank Negara Malaysia for those aged 55 years and above, who do not have permanent jobs.
"The maximum limit per person is RM50,000 with a maturity period of three years and a rate of 5 per cent a year," he said.
Further, to reduce the financial burden of the poor and needy senior citizens, the government will increase their allowance from RM200 to RM300 per month effective Jan 1, 2008.
On assistance for the disabled, the government has increased the disabled workers' monthly allowance from RM200 to RM300, provided special assistance of RM300 per month for eligible persons taking care of the disabled who are bed-ridden and patients suffering from chronic illness and allowed tax deduction on renovation costs incurred by employers who have disabled workers at their workplace.
Speaking on health, the prime minister said RM13 billion was allocated for improving the quality of hospital services, purchasing medical supply and health equipment.
Among the major projects to be implemented next year are the construction of the Ulu Kinta Allied Health Science College, Kuala Pilah Nursing College, Kluang Hospital, Tampin Hospital, Cheras Rehabilitation Hospital and the Kuala Lumpur Women and Children Hospital.
To retain medical specialists and government hospitals, the Full Paying Patients Scheme will be implemented at government hospitals where medical specialists will receive a portion of the payment, starting Jan 1, 2008.
Taking into consideration the importance of public safety and combating crime, RM6 billion had been allocated to the Royal Malaysia Police, he said.
Abdullah said that to ensure the culture of good maintenance, the government has allocated RM9.7 billion for various types of maintenance works.
"To ensure that the allocation is fully ulitilised, ministries and agencies will not be allowed to vire funds to other activities. Action will be taken against government servants who neglect their duties with respect to maintenance," he said.
On conservation and preservation of the environment, the government has set aside RM1.1 bilion for flood mitigation programmes in Sungai Muda, Sungai Kelantan, Sungai Damansara, Sungai Prai and Kuala Lumpur Flood Mitigation Project to reduce the occurence of floods.
On the importance of the civil service, Abdullah said it was high time that the culture of high performance be adopted in the civil service to spur further improvements in performance.
"For a start, secretaries-general of ministries and head of services will be offered a three-year contract and the performance rewarded based on KPIs. This contract will be offered to officers who are currently serving in the Diplomatic and Administrative as well as other relevant services," he said.
To ensure efficiency of the administration, the government had appointed grade 41 officers on a contract basis to fill vacancies. Many of these contract officers have exhibited high work performance and proven their suitability to be appointed to permanent posts.
"These contract officers will be absorbed into the civil service upon recommendations by heads of department," Abdullah said in his 90-minute speech.
-- BERNAMA
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