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#Belanjawan2020 (Malaysia Budget 2019) is being announced in Malaysian Parliament today at 1600 hours by Minister of Finance, Lim Guan Eng.
Here’s a link to the live stream.
Human Resources Online is sharing live updates on HR and manpower issues arising from the speech, so do refresh this page regularly.
♦ Civil servants will stand to benefit from the following:
A RM50 increase in the Cost of Living Allowance (COLA) per month beginning 2020 for the support group. An additional RM350mn will be allocated to this annually.
Civil servants will be allowed early redemption of Accumulated Leaves (Gantian Cuti Rehat) for up to 75 days as replacement pay, for those who have at least 15 years of service.
The Public Sector Home Financing Board (LPPSA) will also offer free personal accident insurance (up to RM100,000 coverage) for two years to new government housing loan borrowers.
A special payment of RM500 will be given to civil servants Grade 56 and below.
A special payment of RM250 will be paid before the end of the year. This will be extended to non-pensionable veterans.
A one-off payment of RM500 to the 70,000 holders of the Malaysian Service Medal (Pingat Jasa Malaysia).
♦ Expansion of the mySalam protection plan:
The national health protection scheme will be expanded to cover 45 critical illnesses and polio from 1 January 2020. It currently covers only 36 critical illnesses.
The age range will also be expanded to cover ages 18 to 65 (instead of the current 55). This will benefit some 1.5 million individuals.
Malaysians with an annual gross income of up to RM100,000 will receive critical illness payments of RM4,000 and income replacements of RM50 a day when diagnosed and admitted in a government hospital. This will benefit five million individuals.
♦ A new band for taxable income in excess of RM2mn will be introduced and taxed at 30% – a 2 percentage point increase from the current 28% rate. This will affect approximately 2,000 top income earners in the country. This aims to help ensure a more progressive income tax structure.
♦ RM10mn will be allocated to Malaysian Global Innovation and Creativity Centre (MaGIC) to encourage the development of social enterprises, and aid in improving socio-economic welfare and community building.
♦ Singles who are above 40 and earning less than RM2,000 a month will be eligible for RM300 Bantuan Sara Hidup aid. Disabled individuals aged 18 and above will also be eligible for the aid. Additionally, these demographics will automatically receive the Takaful MySalam insurance scheme free.
♦ An increased focus in technical and vocational education (TVET)
Budget allocation for TVET increased from RM5.7bn to RM5.9bn.
RM50mn will be allocated to Skills Development Fund Corporation (PTPK)
Matching grants worth RM20mn will be provided to support TVET courses specially designed to collaborate with the industry.
RM30mn will be provided to train more than 3,000 youths from low-income families.
Malaysian Technical University Network (MTUN) will start offering graduate courses from 2020 for students who graduate from vocational colleges.
♦ Malaysians who replace foreign workers will receive a monthly incentive of RM350 or RM500 for two years, depending on sector. Employers will receive a monthly incentive of RM250 in the same time period.
♦ The Social Security Organisation (Socso) will build a new RM500mn rehabilitation centre in Perak, following the success of a similar centre in Melaka. The centre will be equipped with the latest technology, including robotics, trauma treatment and excellence unit to prevent accidents.
♦ To bring women back to work, the Women@Work initiative will be introduced. This aims to create 33,000 job opportunities a year for women between the ages of 30 and 50 who have stopped working for a year or more. To aid the process:
Women who return to work will be given a salary incentive of RM500 a month for two years, while the employer will be given a monthly incentive of RM300 in the same time period.
Income tax exemptions for women returning to work will be extended for another four years until 2023.
RM30mn will be spent to build more daycare centres at government premises, especially in hospitals and schools. This year, 66 daycare centres were set up.
♦ As announced in the previous budget, the Digital Service Tax will come into effect starting 1 January 2020. Foreign companies providing services such as (streaming, digital advertising, digital software, and games distribution) should register with the Customs Department from 1 October 2019.
♦ RM445mn will be allocated to support bumiputera entrepreneurship development. The funds will go towards improving access to financing, business premises preparation, and entrepreneurial training. The split will be done as follows:
RM150mn for all entrepreneurship development and skills development programmes by Perbadanan Usahawan Nasional Berhad (PUNB);
RM75mn to build bumiputera SME capacity by SMECorp, which includes programmes to enhance marketing, packaging and financial literacy;
RM170mn for financing access through Tekun Nasional, SME Bank and Real Estate Investment Berhad (PHB); and
RM50mn for entrepreneurship programs under the Economic Affairs Ministry.
♦ To aid SME growth and development, the following will be provided:
50% matching grant of up to RM5,000 will be provided to small and medium enterprises to upgrade their digital operations.
For Indian community entrepreneurs, the government will provide a loan of RM20mn under the Indian Entrepreneur Development Scheme.
RM100mn will be allocated under the Chinese community small industries fund, with an interest of 4%.
♦ To push towards developments in the digital space, grants will be given including:
RM25mn matching grant funds to promote more digital application pilot projects utilising fiber optic and 5G infrastructure.
RM20mn to MDEC to promote local talent in producing digital content.
♦ Fourteen One-stop Digital Improvement Centres will be established in each state to facilitate access to financing and business capacity development.
♦ Budget has four thrusts:
Boosting economic growth in new economy
Investing in people
♦ Special investment incentives packages will be provided (worth up to RM1bn a year) for five years to attract Fortune 500 companies and “global unicorns” in the high tech, manufacturing, creative and economic sectors.
♦ Special investment incentives packages will be given (worth up to RM1bil a year) to local companies for five years that would be able to penetrate the world market.
♦ Allocation for budget 2020 is RM297bn (a drop from the RM314.5bn for Budget 2019). This comprises an operational expenditure of RM241n and a development expenditure of RM56bn.
♦ Government revenue saw an increase in both individual and company income tax collection:
6.1% increase in individual tax (from RM35.2bn to RM37.36bn.
6.7% increase in company income tax (from RM70.76bn to RM75.51bn).
Source: The Star Online Image: Malaysia’s Ministry of Finance Facebook
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This article was first published in Human Resources Online Bulletin and is reproduced with permission. Original article can be found at http://www.humanresourcesonline.net