KUALA
LUMPUR, Oct 25 (Bernama) -- Alerting Malaysians to be vigilant in the
face of global political and economic uncertainties, Datuk Seri Najib
Tun Razak Friday unveiled the Budget for next year that aims to
strengthen economic resilience, accelerate transformation and fulfill
promises.
The Prime Minister, who is also the Finance Minister, said the nation s financial blueprint highlights five thrusts: invigorating economic activity, strengthening fiscal management, inculcating excellence in human capital, intensifying urban and rural development, and ensuring the well-being of the people.
He told the Dewan Rakyat that although Malaysia s highly open economy is not spared from the expected global growth of 2.9 percent this year, the country s strong economic fundamentals and accommodative monetary policy should mean growth at a sustainable pace, with the nation s economy growing at 4.2 percent in the first half of 2013.
Najib's brighter economic picture for 2014 sees exports of goods growing by 2.5 percent, the construction sector expanding by 9.6 percent and the services sector rising at 5.7 percent.
The unemployment rate is estimated at 3.1 percent for next year and the inflation rate at a low 2 to 3 percent.
The Prime Minister also expects the per capita income for 2014 to reach RM34,126 compared with RM24,879, an increase of 37 percent over six years.
"In this regard, we are confident of achieving the target per capita income of RM46,500 or US$15,000 in 2020," he added. "It is even possible that we will achieve developed nation status much earlier than 2020."
The 2014 Budget will allocate a total of RM264.2 billion to implement programmes and projects for the well-being of the rakyat and national development.
Of this amount, RM217.7 billion is for operating expenditure while RM46.5 billion is for development expenditure.
Under operating expenditure, RM63.6 billion is allocated for emoluments and RM36.6 billion for supplies and services.
In addition, RM114.5 billion is for fixed charges and grants, RM1.4 billion for the purchase of assets and the remaining RM1.5 billion is for other expenditure.
Of the development expenditure, RM29 billion is allocated to the economic sector while RM10.5 billion goes to the social sector for education and training, health, welfare, housing and community development.
A further RM3.9 billion is allocated to the security sector, while RM1.12 billion is for general administration and RM2 billion is for contingencies.
The government expects to rake in a larger amount as revenue next year. At an estimated RM224.1 billion, it will be RM4 billion more than this year's expected amount.
What this means is that the federal government's fiscal deficit will further decline from 4 percent of GDP in 2013 to 3.5 percent in 2014, prompting Najib to remark: "This clearly indicates the government's commitment towards fiscal consolidation to further strengthen the financial position of the nation."
On the 2014 Budget's first thrust on invigorating economic activity, Najib pointed out that the government's continued efforts to provide a conducive environment to attract more domestic and foreign investments have led to an increase in private investment, with its share in relation to GDP growing from 12.4 percent in 2010 to 16.7 percent currently.
Next year should see private investment increasing to RM189 billion or 17.9 percent of GDP, paticularly in oil and gas, textile industry, transport equipment and real estate development.
Noting that public investment is estimated to reach RM106 billion, the Prime Minister said the projects to be implemented include the 316 km West Coast Expressway between Banting and Taiping and the double tracking rail projects between Ipoh and Padang Besar as well as between Gemas and Johor Bahru.
In the oil and gas sector, the Petronas projects include the Sabah Ammonia Urea Project (SAMUR) in Sipitang; the integrated oil and gas production development project in Kebabangan; the regasification plant project in Lahad Datu; and RAPID in Pengerang, Johor.
Najib said the government will continue to encourage investments in the five regional economic corridors by providing basic infrastructure and implementing high-impact projects.
As at end 2012, investments worth RM124 billion or 41 percent of the total committed investments were realised in the regional corridors.
In the first nine months of this year, the regional corridors attracted committed investments of RM53.4 billion with almost 50 percent realised. These include three projects in the Iskandar Region - Pinewood Studio, Gleneagles Medini Hospital and Pegasus International School.
Next year the five regional corridors will be allocated RM1.6 billion with the main projects to include the agropolitan project and oil palm-based industries in the Sabah Development Corridor as well as the Samalaju Industrial Park and a halal hub in the Sarawak Regional Corridor.
In the East Coast Corridor, Kuantan Port will be expanded while an integrated petrochemical complex will come up in Gebeng and Kertih. In the Northern Corridor, the main projects include the planting of commercial crops and a fertigation system.
On invigorating the services sector, Najib said the government will launch the Services Sector Blueprint in 2014 which will outline strategies and measures as well as identify potential subsectors to be developed.
These include logistics, aviation, tourism, Internet, financial market and pension.
To ensure a more efficient logistics sector, the government will formulate a Logistics Sector Master Plan to provide the strategic direction for the development of logistics infrastructure and supply chain as well review regulations and laws.
In addition, RM3 billion will be given as soft loans to encourage the development of the shipping industry, shipyard construction, oil and gas as well as maritime-related support activities.
To promote the aviation industry, there will be a National Aviation Policy that will have measures to strengthen the ecosystem and services network, as the government recognises Malaysia's potential to be an aviation hub in the region.
Among the projects for this sector will be the replacement of the air traffic control management system at Subang with a RM700 million centre at KLIA that will facilitate an increase in air traffic from 68 to 108 movements per hour on three runways. "This will be among the highest capacity in handling air traffic worldwide," said Najib.
The airports at Kota Kinabalu, Sandakan, Miri, Sibu and Mukah will be upgraded at a cost of RM312 million, while the passenger terminals at Langkawi and Kuantan will be upgraded.
On the tourism sector, Najib said it is expected to generate revenue of RM65 billion this year, and with 2014 being Visit Malaysia Year, RM1.2 billion is being allocated for operating and development expenditure.
In addition, he announced that 2015 will be the Year of Festivals to showcase a variety of cultural programmes and festivals.
As such, investments particularly in new four and five star hotels will be encouraged, with the application period for pioneer status and investment tax allowance incentives being extended for another three years until Dec 31, 2016.
There will also be a RM2 billion Special Tourism Infrastructure Fund to provide soft loans to build infrastructure such as hotels, resorts and theme parks as well as purchase and replace equipment related to the tourism sector.
On expanding Internet access, Najib said the High Speed Broadband (HSBB) project will move into its second phase with private sector collaboration. This RM1.8 billion initiative is expected to benefit 2.8 million households nationwide with the Internet speed being increased to 10 Mbps.
HSBB will also be expanded to suburban areas at a cost of RM1.6 billion and also to rural areas, where 1,000 telecommunication transmission towers will be built over the next three years with an investment of RM1.5 billion.
For Sabah and Sarawak, new underwater cables will be laid within three years at a cost of RM850 million.
On strengthening the financial market, Najib said laws will be amended and the Netting Act will be drawn up to protect the enforcement rights of "close-out netting" under financial contracts. This is to reduce credit risk and promote the derivatives market as well as reduce the cost of doing business.
This move is necessary as Malaysia's domestic bond market is the largest in Southeast Asia with a value exceeding RM1 trillion, while daily transactions in the foreign exchange and money markets are more than RM30 billion.
The Prime Minister also announced significant measures to entrench Malaysia's position as a leader in the Islamic capital market, especially in promoting the country as a market for socially responsible investment (SRI).
There will be an Environmental, Social and Governance Index to raise the profile of listed companies which have high socially responsible practices.
Also in the cards is a Framework of Socially Responsible Sukuk Instrument or SRI Sukuk to finance various sustainable and responsible investment initiatives.
Also, the government will set up a SRI Fund for investment in listed companies that promote SRI.
-- BERNAMA
Bernama Online
Friday 25 October,2013.
The Prime Minister, who is also the Finance Minister, said the nation s financial blueprint highlights five thrusts: invigorating economic activity, strengthening fiscal management, inculcating excellence in human capital, intensifying urban and rural development, and ensuring the well-being of the people.
He told the Dewan Rakyat that although Malaysia s highly open economy is not spared from the expected global growth of 2.9 percent this year, the country s strong economic fundamentals and accommodative monetary policy should mean growth at a sustainable pace, with the nation s economy growing at 4.2 percent in the first half of 2013.
Najib's brighter economic picture for 2014 sees exports of goods growing by 2.5 percent, the construction sector expanding by 9.6 percent and the services sector rising at 5.7 percent.
The unemployment rate is estimated at 3.1 percent for next year and the inflation rate at a low 2 to 3 percent.
The Prime Minister also expects the per capita income for 2014 to reach RM34,126 compared with RM24,879, an increase of 37 percent over six years.
"In this regard, we are confident of achieving the target per capita income of RM46,500 or US$15,000 in 2020," he added. "It is even possible that we will achieve developed nation status much earlier than 2020."
The 2014 Budget will allocate a total of RM264.2 billion to implement programmes and projects for the well-being of the rakyat and national development.
Of this amount, RM217.7 billion is for operating expenditure while RM46.5 billion is for development expenditure.
Under operating expenditure, RM63.6 billion is allocated for emoluments and RM36.6 billion for supplies and services.
In addition, RM114.5 billion is for fixed charges and grants, RM1.4 billion for the purchase of assets and the remaining RM1.5 billion is for other expenditure.
Of the development expenditure, RM29 billion is allocated to the economic sector while RM10.5 billion goes to the social sector for education and training, health, welfare, housing and community development.
A further RM3.9 billion is allocated to the security sector, while RM1.12 billion is for general administration and RM2 billion is for contingencies.
The government expects to rake in a larger amount as revenue next year. At an estimated RM224.1 billion, it will be RM4 billion more than this year's expected amount.
What this means is that the federal government's fiscal deficit will further decline from 4 percent of GDP in 2013 to 3.5 percent in 2014, prompting Najib to remark: "This clearly indicates the government's commitment towards fiscal consolidation to further strengthen the financial position of the nation."
On the 2014 Budget's first thrust on invigorating economic activity, Najib pointed out that the government's continued efforts to provide a conducive environment to attract more domestic and foreign investments have led to an increase in private investment, with its share in relation to GDP growing from 12.4 percent in 2010 to 16.7 percent currently.
Next year should see private investment increasing to RM189 billion or 17.9 percent of GDP, paticularly in oil and gas, textile industry, transport equipment and real estate development.
Noting that public investment is estimated to reach RM106 billion, the Prime Minister said the projects to be implemented include the 316 km West Coast Expressway between Banting and Taiping and the double tracking rail projects between Ipoh and Padang Besar as well as between Gemas and Johor Bahru.
In the oil and gas sector, the Petronas projects include the Sabah Ammonia Urea Project (SAMUR) in Sipitang; the integrated oil and gas production development project in Kebabangan; the regasification plant project in Lahad Datu; and RAPID in Pengerang, Johor.
Najib said the government will continue to encourage investments in the five regional economic corridors by providing basic infrastructure and implementing high-impact projects.
As at end 2012, investments worth RM124 billion or 41 percent of the total committed investments were realised in the regional corridors.
In the first nine months of this year, the regional corridors attracted committed investments of RM53.4 billion with almost 50 percent realised. These include three projects in the Iskandar Region - Pinewood Studio, Gleneagles Medini Hospital and Pegasus International School.
Next year the five regional corridors will be allocated RM1.6 billion with the main projects to include the agropolitan project and oil palm-based industries in the Sabah Development Corridor as well as the Samalaju Industrial Park and a halal hub in the Sarawak Regional Corridor.
In the East Coast Corridor, Kuantan Port will be expanded while an integrated petrochemical complex will come up in Gebeng and Kertih. In the Northern Corridor, the main projects include the planting of commercial crops and a fertigation system.
On invigorating the services sector, Najib said the government will launch the Services Sector Blueprint in 2014 which will outline strategies and measures as well as identify potential subsectors to be developed.
These include logistics, aviation, tourism, Internet, financial market and pension.
To ensure a more efficient logistics sector, the government will formulate a Logistics Sector Master Plan to provide the strategic direction for the development of logistics infrastructure and supply chain as well review regulations and laws.
In addition, RM3 billion will be given as soft loans to encourage the development of the shipping industry, shipyard construction, oil and gas as well as maritime-related support activities.
To promote the aviation industry, there will be a National Aviation Policy that will have measures to strengthen the ecosystem and services network, as the government recognises Malaysia's potential to be an aviation hub in the region.
Among the projects for this sector will be the replacement of the air traffic control management system at Subang with a RM700 million centre at KLIA that will facilitate an increase in air traffic from 68 to 108 movements per hour on three runways. "This will be among the highest capacity in handling air traffic worldwide," said Najib.
The airports at Kota Kinabalu, Sandakan, Miri, Sibu and Mukah will be upgraded at a cost of RM312 million, while the passenger terminals at Langkawi and Kuantan will be upgraded.
On the tourism sector, Najib said it is expected to generate revenue of RM65 billion this year, and with 2014 being Visit Malaysia Year, RM1.2 billion is being allocated for operating and development expenditure.
In addition, he announced that 2015 will be the Year of Festivals to showcase a variety of cultural programmes and festivals.
As such, investments particularly in new four and five star hotels will be encouraged, with the application period for pioneer status and investment tax allowance incentives being extended for another three years until Dec 31, 2016.
There will also be a RM2 billion Special Tourism Infrastructure Fund to provide soft loans to build infrastructure such as hotels, resorts and theme parks as well as purchase and replace equipment related to the tourism sector.
On expanding Internet access, Najib said the High Speed Broadband (HSBB) project will move into its second phase with private sector collaboration. This RM1.8 billion initiative is expected to benefit 2.8 million households nationwide with the Internet speed being increased to 10 Mbps.
HSBB will also be expanded to suburban areas at a cost of RM1.6 billion and also to rural areas, where 1,000 telecommunication transmission towers will be built over the next three years with an investment of RM1.5 billion.
For Sabah and Sarawak, new underwater cables will be laid within three years at a cost of RM850 million.
On strengthening the financial market, Najib said laws will be amended and the Netting Act will be drawn up to protect the enforcement rights of "close-out netting" under financial contracts. This is to reduce credit risk and promote the derivatives market as well as reduce the cost of doing business.
This move is necessary as Malaysia's domestic bond market is the largest in Southeast Asia with a value exceeding RM1 trillion, while daily transactions in the foreign exchange and money markets are more than RM30 billion.
The Prime Minister also announced significant measures to entrench Malaysia's position as a leader in the Islamic capital market, especially in promoting the country as a market for socially responsible investment (SRI).
There will be an Environmental, Social and Governance Index to raise the profile of listed companies which have high socially responsible practices.
Also in the cards is a Framework of Socially Responsible Sukuk Instrument or SRI Sukuk to finance various sustainable and responsible investment initiatives.
Also, the government will set up a SRI Fund for investment in listed companies that promote SRI.
-- BERNAMA
Bernama Online
Friday 25 October,2013.
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