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PETALING JAYA: Malaysia has shown the world that it can run its economy in various circumstances, says Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.
Presenting the first national spending plan of the Perikatan Nasional government, Tengku Zafrul presented in the Dewan Rakyat a budget with an expenditure of RM322.5bil, the largest in the country’s history.
“An irrefutable fact worth reminding everyone is that regardless of the challenges, we have shown the world that Malaysia can run our own economy, whether it be in stormy seas or in calm waters,” said Tengku Zafrul.
With its theme “Resilient as One, Together We Succeed”, the 2021 Budget aims to help Malaysians weather the Covid-19 pandemic, keep businesses going and promote economic recovery.
The 2021 budget contains a series of measures to help almost all levels of society.
They include more payments to B40 households, a cut in individual income tax, and specific withdrawals from the Employee Provident Fund (EPF) to help those who have lost their jobs, among many others.
“In addition to a more specific focus, the government will strike a balance between financial sustainability and reducing the urban-rural development gap,” he said.
Of the total expenditure of RM322.5 billion in the 2021 budget, RM 236.5 billion will be for operational expenses, $ 69 billion for development spending and $ 17 billion under the Covid Fund. 19.
For the first time, budget consultations were held in every state in the country and involved more than 38 dialogues that spanned more than 40 companies and industries.
“Most importantly, the ministry engaged with Malaysians from across the spectrum, from youth, women and parents to seniors,” said Tengku Zafrul.
A number of measures have been outlined to help win the war against Covid-19 and protect public health.
They include an additional allocation of RM1bil to fight the current third wave of contagion in Malaysia.
An allocation of RM3bil ringgit will also be reserved to purchase Covid-19 vaccines when available.
The social safety net for the vulnerable in society will also be strengthened.
Tengku Zafrul said that more than 400,000 households earning less than the poverty line of RM2,208 will be assisted with an allocation of RM2.2 trillion.
The Bantuan Sara Hidup (BSH) aid will be replaced by an enhanced Bantuan Prihatin Rakyat (BPR) program, which will benefit 8.1 million beneficiaries compared to 4.3 million beneficiaries of the BSH program.
The allocation for BPR will be RM6.5bil compared to RM5bil for BSH.
Measures to help reduce the burden on the population have also been included, such as a one per cent reduction in personal income tax for those with a taxable income band of between RM 50,001 and RM 70,000.
The measure will benefit 1.4 million taxpayers.
Tengku Zafrul said that the EPF would introduce a facility to allow taxpayers to withdraw from Account 1 on a target basis of RM 500 per month with a total of RM 6,000 over 12 months.
“This recall will help members who have lost their jobs and is expected to ease the financial burden on around 600,000 affected taxpayers,” he said.
With unemployment at 5.3% or 820,000 people out of work in May, the highest since 1989, job creation and retention is another key aspect of the Budget.
Among the initiatives to create jobs is Skim Jaminan Penjanaan Pekerjaan (JanaKerja), which will be presented next year.
The plan will create 500,000 job opportunities, including skill development and retraining programs worth RM3.7bil.
Tengku Zafrul said that government revenues will be reduced by almost RM18bil to RM227.3bil, compared to RM244.5bil that was previously estimated, due to the impact of Covid-19.
“Despite the lower income scenario, the government will not commit to protecting lives and livelihoods in the fight against Covid-19,” he said.
Tengku Zafrul, who called for unity to weather the storm, said that while all parties can argue and disagree on minor issues, they must come together to agree principles.
“I believe that Malaysia is a brave and strong nation and when we can agree, we can do extraordinary things,” he said.
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