PAKATAN Harapan will table its much anticipated Budget 2020 today, its second spending plan after forming the federal government in May last year.

Its first budget, for 2019, was an austerity-driven plan against the backdrop of lower federal revenue because of its election promise to scrap the goods and services tax (GST) and efforts to deal with the 1Malaysia Development Bhd scandal and recoup as much of the lost funds as possible.

For 2020, Finance Minister Lim Guan Eng has hinted that the government will likely adopt an expansionary budget.

The government has also said the Budget 2020 will have policies that are in line with the Shared Prosperity Vision 2030 that was launched recently by Prime Minister Dr Mahathir Mohamad.

For ordinary Malaysians, whether in the M40 or B40 groups, the high cost of groceries, household items and services, education and home ownership, continue to be a bane and they hope the budget will address these problems.

Businesses, meanwhile, have a wishlist that is similar to previous years, chiefly for a coherent foreign worker policy and resolution of labour recruitment problems, reduced cost of doing business and more streamlined, centralised oversight.

They also hope the budget will also set the tone for the 12th Malaysia Plan.

The Malaysian Insight brings you live updates on Budget 2020: – October 11, 2019.

6.30pm: Lim says Malaysia belongs to everyone regardless of age, race, religion, background or geography. 

“From Perlis to Sabah, let us unite to strive together so that the fruits of our efforts can be shared equitably with care and respect for each other. We are entrusted with this new hope as our duty; Let’s strengthen national unity and integration towards building a better life and brighter future for our children.”

“Tan Sri Speaker, Sir, I beg to propose,” he says to end his Budget 2020 speech

6.25pm: Civil service perks: 

RM350 million to increase Cost of Living Allowance (COLA) by RM50 per month.

Early redemption of accumulated leaves (gantian cuti rehat) for up to 75 days in lieu of pay, for those who have at least 15 years of service.

Public Sector Home Financing Board will offer free personal accident insurance of up to RM100,000 coverage for two years to new government housing loan borrowers.

Government will improve the benefits of next of kin of civil servants who died in service:

Ex-Gratia Death Benefit of up to RM150,000.

Annual salary movement (PGT) is brought forward for civil servants who have died in service before the salary movement date (TPG).

Allowance of RM2 per hour beginning from January 1 2020, resulting in an additional allocation of RM26 million.

Allocation of RM36 million for special allowance of RM200 a month for all 14,400 Fire and Rescue Department personnel.

One-off payment of RM500 to 70,000 holders of the Pingat Jasa Malaysia, with an allocation of RM35 million.

In line with the Repair, Replace, and Restore (3R) philosophy, RM330 million for  Property and Land Management Division under the Prime Minister’s Department to repair and maintain public service quarters. In addition, RM150 million and RM250 million is allocated to repair armed forces and police quarters.

Special payment of RM500 for all civil servants Grade 56 and below.

6.24pm: Additional 100 personnel and allocation of RM10 million for MACC to undertake risk assessment tests at all ministries, departments and agencies.

Government will implement reforms and establish laws and institutions such as:

The Independent Police Complaints and Misconduct Commission (IPCMC) to raise public confidence in police; and

 Establish the Malaysian Ombudsman to replace the Bureau of Public Complaints to enhance governance and delivery systems of the government.

RM50 million through Governance, Integrity and Anti-Coruption Centre to enhance detention procedures and facilities, in particular the installation of 11,500 units of Closed-Circuit Televisions  cameras in police detention centres and immigration entry points.

6.22pm: Government will dispose of assets which were approved previously via competitive bidding. This is expected to generate revenue of more than RM3 billion in 2020.

The Government has decided to proceed with the Bandar Malaysia Project, which involves 486 acres in Sungai Besi, Kuala Lumpur having negotiated better terms. The project will now include a People’s Park, with an additional 5,000 units of affordable homes and greater Bumiputera participation in the project. The proceeds from the project will be valued and announced in due course, and will be utilised to reduce the debts of 1MDB

6.21pm: RM15.9 billion in GST refunds have been paid to more than 78,000 companies and income tax refunds amounting to RM13.6 billion have been returned to 448,000 companies and 184,000 taxpayers. 

Government will merge the Special Commissioner of Income Tax and Customs Appeal Tribunal into the Tax Appeal Tribunal. Through this merger, taxpayers who are dissatisfied with the decision of the Director General of the IRB or the Director General of RMCD may submit a tax-related appeal under all applicable tax laws to the Tax Appeal Tribunal to be operation in 2021.

Digital Services Tax will be in effect from January 1. Foreign service providers can commence registration with the Royal Malaysian Customs Department (RMCD) as of 1 October 2019.

Beginning January 2021, Malaysians above the age of 18 and corporate entities will be assigned a Tax Identification Number or TIN. Engagement sessions with all stakeholders will commence next year.

RM235 million to purchase 20 additional cargo scanners at ports of entry to curb smuggling.

Government proposes a higher minimum mandatory penalty of RM100,000 for illegal gamblers, along with a minimum mandatory jail sentence of six months.

Illegal operators face a higher minimum mandatory penalty of RM1 million and a 12 month minimum mandatory jail sentence. Next year, the total number of special draws for Numbers Forecast Operator (NFO) will be reduced from 11 to 8 times a year.

6.19pm: Government expects RM244.5 billion in revenue in 2020, an increase of RM11.2 billion from 2019.  This excludes the one-off Petronas special dividend of RM30 billion.

“Despite the healthy increase in tax revenue, the collection was significantly lower than some countries. For 2017, Malaysia’s tax revenue relative to GDP is only 13.1%, while countries such as Vietnam, South Korea, Poland and Chile collect 19.0%, 15.4%, 16.8% and 17.4% respectively,” says Lim.

“To ensure a more progressive personal income tax structure, it is proposed that a new band for taxable income in excess of RM2 million be introduced and taxed at 30%, which is a 2 percentage point increase from the current 28% rate. This increase will affect approximately 2,000 top income earners in the country.”

6.17pm:  Operating expenditure at RM241 billion and development expenditure at RM56 billion for 2020.

6.15pm: “To sustain economic growth, the Government will be adopting a mildly expansionary budget, with a revised target of 3.2% fiscal deficit in 2020. We expect the fiscal deficit to reduce further on average at 2.8% GDP over the medium term,” Lim says.

6.10pm: RM671 million allocated to the Youth and Sports Ministry.

6.05pm: 18% discount at all PLUS highways. North-South Highway users will save up to RM1,130 million in 2020, and RM43 billion until the concession period ends in 2038. 

Toll for cars at the Second Penang Bridge will be reduced from RM8.50 to RM7. 

6.02pm: Extra RM83 million for school maintenance to RM735 million in 2020, as follows: 

National Schools - RM300 million

 National-type Chinese Schools - RM50 million

National-type Tamil Schools - RM50 million

Boarding Schools - RM50 million 

Mara Junior Science Colleges - RM50 million

Government Aided Religious Schools - RM50 million

Missionary Schools - RM50 million

Tahfiz Schools - RM50 million

People’s Religious Schools & Private Religious Schools - RM25 million

Registered Religious Pondok Schools - RM25 million

National-type Secondary Schools - RM20 million

Independent Chinese Secondary Schools - RM15 million

Health Ministry gets an allocation increase of RM1.9 billion next year to RM30.6 billion. 

Individuals who own not more than two cars and two motorcycles are eligible to receive Targeted Subsidy Programme (PSP) for one vehicle. 

The Government will allocate RM2.2 billion for the scheme, which will benefit more than eight million motorists. Fuel prices in Sabah and Sarawak will be capped at RM2.08 per litre for RON95 and RM2.18 per litre for diesel. 

6pm: Government to invest RM450 million to acquire up to 500 electric buses for public transport in selected cities. 

RM146 million in subsidies bus operators providing for last-mile connectivity in rural and urban areas.

RM50 million to upgrade Sabah’s Gorge Line rail track between Halogilat Station to Tenom Station.

5.55pm: Skim Peduli Kesihatan (PeKA) B40 to provide screening and early intervention for non-communicable diseases, such as mental health and cancer, for those aged between 50 and 60.

5.50pm: The allocation for Islamic affairs under the Prime Minister’s Department will be increased to RM1.3 billion from this year’s RM1.2 billion.

Al-Quran dan Fardu Ain class (KAFA) teachers will get an additional RM100 a month, costing the government RM46 million. 

Government proposes  one-off special bonus of RM500 for each imam, bilal, mosque caretaker and guru takmir. 

RM10 million to Jakim for Rahmatan Lil-Alamin to develop a greater understanding of Maqasid Shariah via advocacy programmes and deliberations. 

5.45pm: In last year’s 2019 Budget, RM7.6 billion was allocated to assist Bumiputera institutions and entrepreneurs. This total has been increased in 2020 to RM8 billion, including the following:

RM6.6 billion provided for Bumiputera institutions focused on education such as Majlis Amanah Rakyat (Mra), Universiti Teknologi Mara (UiTM) and Yayasan Peneraju Pendidikan Bumiputera;

RM1 billion of financing for Bumiputera SMEs, such as through SJPP and SME Bank; and

RM445 million provided for entrepreneurship programmes mainly under SMECorp, Pelaburan Hartanah, PUNB, TEKUN and TERAJU.

Government will ensure at least 30% of tenders of each ministry are reserved for Bumiputera contractors.

5.41pm: Department of Orang Asli Development (JAKOA) will be allocated RM57 million to improve assistance to Orang Asli. Another RM83 million is allocated for economic development, education and infrastructure of the Orang Asli.

5.41pm: Government allocates RM100 million to Malaysian Indian Transformation Unit (Mitra) of which 80% will be not organisation specific but programme-based.

5.40pm: The allocation for subsidies and social assistance will be increased from RM22.3 billion in 2019 to RM24.2 billion in 2020, including welfare assistance such as Bantuan Sara Hidup (BSH) and subsidy payments for agriculture and fuel.

In 2019, BSH has benefitted 3.9 million households. Next year, the government will allocate RM5 billion for BSH and expand the scheme to cover 1.1 million single individuals aged above 40 who are earning less than RM2,000 per month. In addition, all disabled persons aged 18 years old and above, with an income less than RM2,000 per month will also be entitled to receive BSH.

5.33pm: The Education Ministry is the biggest beneficiary. Its allocation for 2019 increased to RM64.1 billion from RM60.2billion.

5.25pm:  Special allowance for Sabah and Sarawak amounting t0 RM53.4million and RM32 million respectively. The special allowance has not been reviewed since 1969. 

5.22pm: RM1.1billion for MOTAC to fulfill the goals of the Visit Malaysia 2020.

5.17pm: Government has allocated RM27 million for the Malaysian Palm Oil Board.

RM738 million for Risda and Felcra

Allowance for Fisherman increased to RM250 a month.

5.17pm: Biodiesel for transport sector to be introduced at the end 2020.

5.15pm: Government has launched a replanting scheme for oil palm smallholders amounting to RM550 million.

5.11pm: Goverment is proposing that minimum wage for major cities to be increased to RM1200 per month.

5.10pm: Consolidation of Bank Pembangunan Malaysia, Danajamin, SME Bank and Exim Bank to restructure development financial institutions.

5.08pm: RM445 million grant for Bumiputera entrepreneur development.

5pm: Framework for digital banking will be finalised by Bank Negara amd open for application in the first  quarter of 2020.

4.56pm: RM10 million will be given to Entreprenuer Development Ministry to develop advisory services and industrial awareness for the halal industry.

4.55pm: SME Bank will introduce two new funds.

RM200 million for female entrepreneuers. 

RM300 million to support SMEs to become regional players

4.53pm: RM500 million to female entreprenuers through SJPP.

4.46pm: RM20 million to spur the potential of e-sports.

4.37pm: RM20 million for Cradle Fund to train entreprenuers venturing into high-impact technology.

4.34pm: RM20million for MDEC to empower local talent and to step up digital content.

4.30pm: RM210 million will be allocated to enhance digital infrastructure in public places, especially schools and high-impact areas. Grant for development of 5G ecosystem amounting to RM50 million.

4.29pm: MCMC will get RM250 million to prepare bandwith access through satellite technology to improve connectivity in rural areas of Sabah and Sarawak.

4.25pm: Government is studying feasibility of developing Carey Island for the next phase of growth that will make Port Klang a regional maritime and logistics hub.

4.24pm: Lim says the government will prepare an incentive package to draw investments from Fortune 500 companies and global “unicorns” in high-technology sectors, manufacturing as well as the creative and new economy areas.

4.22pm: The government has formed the National Investments Committee, which is chaired by the finance minister and the international trade and industry minister, he says.

4.19pm: Foreign Direct Investment rose 47% to RM80.1 billion in 2018 from RM54.4billion in 2017, says finance minister.

4.17pm: Lim says budget 2020 will be based on four pillars – first, to drive economic growth through new economy and in the digital era; second, to invest in human capital development; third, to create a united, inclusive and fair society; fourth, to reform instutions and public finances.

4.16pm: Government has no intention of bringing GST back, in line with the mandate given by the people, says Lim.

4.10pm: Vision 2020 would have succeeded if it is not for the financial mismanagement by the former government, says Lim, drawing jeers from opposition bench. Dewan Rakyat Speaker Mohamad Ariff reminds opposition members that it is not yet time for debate and to allow the finance minister to speak.

4.05pm: Finance Minister Lim Guan Eng starts budget speech.