Datuk Seri Najib Abdul Razak has already unveiled the nation’s budget for the next year. And hopefully this time, there won’t be supplementaries and even sudden amendments to it in the middle of the year.
And as expected for a government wanting to maintain power, there are a lot of dishing out in the budget. Similarly, there is a cut in tax deductions – or more or rather, a grouping that will benefit some above others.
So let’s start with the good points first.
RM50 bil connection East Coast Peninsular to the West
Oh thank God, finally we are linking the Peninsular through rail, hopefully allowing the ETS service all the way to Kota Bharu through Kuala Terengganu and districts in Pahang. At the same time, the rail line currently through Gua Musang is targeted for upgrading for the amount RM100 mil.
Strategic government land for housing
Again, good deal. We need housing. Land prices affect housing. If this cost is nullified it would bring down the cost (and hopefully price) of affordable housing. But, this is again dependent on what we define as “affordable”.
As Khazanah Research Institute points out, anything beyond RM150,000 is not affordable.
Tiered tax deductions for SMEs
Now, this one is a rather interesting twist. For those in the know, the corporate tax stands at 24 percent. In this latest budget, profits will be the measurement for tax deductions – basically a reward system through growth.
In his speech, Najib mentions that SMEs can get up to 4 percent deduction from their taxes based on profits – the higher the profits, the higher the deduction.
It’s perhaps the way the government wishes to push SMEs to grow further in size, and not just dependent on GLCs (we’ll get to GLCs in a minute).
Increase in BR1M
Yet again, the government has set out for direct transfers to the needy. I would have said poor, but it would be a misnomer to say earning RM3,000 is poor, especially for a single guy living with their parents and not paying for groceries and dependents.
Welfare in the long term, is just as bad as giving subsidies – it’ll make people too dependent on it. But at the same time, it is an evil necessity.
Wages are not going up fast enough to cope with the cost of living, and people’s wants must be addressed to keep the population happy. Thus, BR1M.
Is it a good? Yes.
Would increasing minimum wage have been better? No.
Sadly, we must admit that increasing the minimum wage would also mean increasing currency outflow due to our migrant labour population.
Increase in Post Secondary School expenditure
The above photo details the increase in cash given out to post-secondary school education which include the matriculation programme. This seems to be a reaction to the fact that Labuan Matriculation College had issues with their semester stipend this year.
As we can see, the amounts are bolstered well enough fot the next year, if it is in fact an increase is in the matriculation programme.
There’s no specific budget line for just matriculation. Something the government’s bean counters would like to look into.
An end to taxi company cronies
This is an outright win for the government and the people who use public transit. The government has ended its dependence on the taxi company cartel by pushing for individual licensed drivers and encouraging those looking for increased income to become Uber drivers.
There’s actually a reason why Najib pushed for Uber instead of Uber and Grab – the former is indirectly, partially owned by Khazanah.
And the outrage can be seen today in the news.
The government has again announced discounts for those paying the PTPTN. However, I’m in two minds about this one, and I’ll mention the other part in the next entry.
A 10 percent discount for those using auto-debits to pay off their PTPTN is a reward on those regardless of income, paying off their debts. It’s a long awaited reprieve for many.
This is but a few points that I’ll admit are of good in the recent budget announcement, but there are also a lot of questionable and downright bad points. We will go into those in a different post.