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PARLIAMENT | Finance Minister Tengku Zafrul Abdul Aziz presents the first budget of the Perikatan Nasional government in the Dewan Rakyat since he came to power in March.
Increased Lifestyle Tax Relief
17:53 h: The tax allowance for lifestyle purposes has been increased from RM500 to RM3,000. Zafrul says this is specifically for sporting purposes.
He adds that the tax break will also cover subscriptions to online news.
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Free RM50 e-wallet payment for youth
17:51 h: The government will credit RM50 in e-wallets owned by 18-20 year olds to encourage cashless transactions.
Incentive to hire recent graduates
5.50 pm: Employers will receive a monthly incentive of RM 1,000 for each recent graduate they hire for three months for apprenticeships, according to the minister.
Zafrul adds that employers can also apply for a maximum grant of RM4,000 for the apprenticeship program.
Free childcare for urban B40
17:45 h: The government, Zafrul says, plans to spend RM20 million to establish “community centers” that will serve as after-school childcare centers for the B40 community in urban areas.
The minister adds that NGOs will be tied to tuition classes and tutoring programs, among others.
More Allowance for Caregivers, Tax Relief for the Disabled
17:40 h: The pay for people volunteering in the Khidmat Bantu di Rumah Program program will increase to RM 400 from RM 150 today, according to Zafrul.
This program is for people who volunteer to care for the elderly or disabled.
Meanwhile, the minister says the government will increase the tax relief for disabled couples to RM5,000, up from RM3,500 today.
On the same note, the tax break for employers who hire seniors has been extended until 2025. This scheme was supposed to only cover the evaluation year of 2019 and 2020.
Zafrul did not name other groups that would supposedly be covered by this incentive – ex-convicts, parolees, supervised, and former drug addicts.
Tax Relief for Private Savings Funds for Extended Retirement
5.33 pm: The RM 3,000 tax allowance for contributions to Private Retirement Savings Funds (PRS) will run until 2025. This was supposed to be a 10-year plan ending in 2021.
Targeted wage subsidy scheme for the tourism and retail sectors
5.30 pm: Zafrul announces that another round of wage subsidies is coming. This will last for three months and will be aimed at the tourism and retail sectors.
The minister says that each employee who earns RM4,000 a month or less will receive an allowance of RM600. The maximum limit of 200 qualified employees per company will be increased to 500.
Zafrul adds that this will benefit 70,000 employers and 900,000 workers.
New work schemes – JanaKerja; Reworked career generator
17.20 h: The Finance Minister says that RM 3.7 billion will be spent to create 500,000 jobs through a scheme known as JanaKerja. This will include skill upgrade and upgrade programs.
He adds that another scheme, known as PenjanaKerjaya, currently run by Socso, will have better incentives.
The first incentive is a 1,600 ringgit wage subsidy scheme, double the existing amount, while job subsidies for disabled and long-term unemployed people have been increased from 20 to 60 percent.
For industries that depend on foreign workers, there will be a special subsidy for both employer and employee to replace foreign workers with locals.
All PenjanaKerjaya schemes will only last six months.
More subsidies, handouts for farmers and fishermen
17:15 h: The monthly allowance for fishermen will increase by RM50 to RM300 next year, while RM400 million will be spent on interest owed by Felda settlers.
Contributions to the EPF will be reduced over 12 months, staggered withdrawals from Account 1
17: 30h: Contributions to the Employee Provident Fund will be reduced to 9 percent from 11 percent effective January 1 over a 12-month period to increase disposable income.
EPF will also allow withdrawals from Account 1 of up to RM6,000 over a 12-month period. The measure was suggested by Umno. Withdrawals can be made from January 1 onwards.
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No extension of the general loan moratorium
17:55: The government will not accept Umno and Pakatan Harapan’s suggestion to extend the loan default scheme.
Zafrul said banks report that 85 percent of lenders are resuming payments after the general moratorium expired on Sept. 30.
However, he adds that banks are allowing those in the B40 category to choose between two options if they have trouble paying:
They can choose a three-month moratorium or cut their monthly payments in half for six months.
Those in the M40 category can rework their financial packages through a self-declaration process if they experience a reduction in income. This installation will begin in December 2020.
Lower income tax, only 1 band
17.00 h: Personal income tax will be reduced by 1 per cent for the 50,001 and 70,000 ringgit tax bands. This is expected to benefit 1.4 million taxpayers.
Third round of BPN payments
4.50 pm: The government will go through a third round of payments from Bantuan Prihatin Nasional (BPN).
Zafrul says that households with a combined monthly income of RM 2,500 and less will receive RM 1,000. Families with more than two children will receive RM1,800.
Households with incomes between RM2501 and RM4,000 will receive RM800, while families with more than two children will receive RM1,200.
Households with incomes between RM4,001 and RM5,000 will receive RM500, while families with more than two children will receive RM750.
Singles with an income of less than RM2,500 will receive RM350. The age limit to claim this sum has been lowered from 40 to 21 years.
Increased welfare payments
4.50 pm: Social assistance payments for children from poor families have been increased from a maximum of RM 450 per family to RM 1,000 per family.
Zafrul says this is expected to help with childcare and nutrition.
Social assistance payments for people with disabilities have also been increased by RM50 and payments for seniors and caregivers of disabled people have been increased from RM150 to RM500.
Pneumococcal vaccination program coming soon
4:45 pm: The government will finally start a pneumococcal vaccination program at a cost of RM90 million that will benefit 500,000 children, says Zafrul.
The minister adds that another 6 million ringgit will go towards rheumatology treatment, while 25 million ringgit will be spent on home dialysis programs, to reduce waiting time in hospitals.
RM500 Cash Delivery for Healthcare Workers, Healthcare Cost Tax Relief
4:40 pm: Zafrul says the government will provide a cash donation of RM500 to 100,000 healthcare workers as a token of appreciation.
Whereas, it adds that RM3 billion will be spent on the Covid-19 vaccine.
To encourage people to get vaccines against pneumococcus, influenza and Covid-19, taxpayers will receive a tax break of 1,000 ringgit.
Tax relief for serious illnesses has been increased from 2,000 to 8,000 and for medical check-ups from 500 to 1,000.
The tax allowance for medical care due to special needs or used for the care of the elderly has been increased from RM3,000 to RM8,000.
The government proposes to increase the Covid-19 fund by RM20b
4.35 pm: On Covid-19, Zafrul says that some measures, such as Malaysia’s Temporary Measures to Reduce the Impact of the Coronavirus Disease 2019 (Covid-19) Act 2020 were already in force, which allow the debt ceiling to be temporarily raised at 60 percent of GDP, compared to the legal limit of 55 percent.
This law also allows the government to allocate RM45 billion for the Covid-19 fund. The minister says the government will propose to increase the fund by RM20 billion.
2020 GDP estimated at -4.5 pct
4.30 pm: Malaysia’s economy is expected to contract 4.5 percent this year compared to the previous year.
However, Zafrul expects the economy to recover next year and grow between 6.5 and 7.5 percent, while the world economy is expected to grow 5.2 percent.
The president makes an exception to the limit, the finance minister makes a speech
4.23 pm: Dewan Rakyat’s speaker, Azhar Azizan Harun, reconvened the session and began by saying that today he was allowing an exception over the 80 MP limit.
“You better let me know next time. I don’t like to make decisions alone, I want to make decisions by consensus,” he says.
He promises that the limit of 80 deputies will apply again on Monday.
Finance Minister Tengku Zafrul Abdul Aziz begins his speech.
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MPs on both sides force speaker to reconsider 80 MP limit
16:14 h: Dewan Rakyat Chairman Azhar Azizan Harun overturns an earlier ruling to limit the number of MPs in the House for Finance Minister Tengku Zafrul Abdul Aziz’s 2021 budget speech.
Opposition leader Anwar Ibrahim (Harapan-Port Dickson) started the ball rolling and received support from both sides of the room, including backbenchers Bung Moktar Radin (BN-Kinabatangan), Tajuddin Abdul Rahman (BN-Pasir Salak), Ahmad Jazlan Yaakub (BN-Machang) and Noh Omar (BN-Tanjung Karang).
Azhar argued that the matter had already been decided by party whips yesterday, but MPs continued to pressure him.
Finally, the speaker relented when DAP Secretary General Lim Guan Eng (Harapan-Bagan) suggested a motion be made on whether the 221 deputies would be allowed to enter the chambers.
The house is in recess.
The budget for 2021 is RM322.54 billion, 10.61 percent more than the previous year and is the largest budget on record.
This is an expansive budget in which the government marginally cuts operating expenses while increasing development spending.
With revenues for this year and next projected to be below the 2019 level, Malaysia will have to make up the shortfall with massive loans.
Total budget for 2021: RM322.54 billion (↑ 8.6 percent, 2020: RM297.02 billion)
Operating expenses: RM236.54 billion (↓ 1.9 percent, 2020: RM241.02 billion)
Development expenses: RM69 billion (↑ 23.21 percent, 2020: RM56 billion)
Projected deficit for 2021: 5.4% (2020: 6 percent [estimate])
