FIFTH FOCUS: EASING INFLATION AND ENHANCING THE WELL-BEING OF THE RAKYAT
69. The Government is mindful of the plight of the rakyat due to rising food prices. To address this, the Government will undertake both short-term and long-term measures which includes the production of main food commodities such as rice, meat, vegetables and fruits through the following measures:
First: Launching of the National Agro-Food Policy 2011-2020. This policy outlines four strategies; ensuring sufficient food supply, increasing the value-add of the agro-food sector, complementing and strengthening the supply chain as well as providing knowledgeable and trained labour for the agriculture sector;
Second: Allocating RM1.1 billion in 2012 for the development of the agriculture sector. Among the main projects are the Northern Terengganu Integrated Agricultural Development Project, Sabah and Sarawak Irrigation Projects, TEKUN and NKEA projects;
Third: Expanding the scope of the Commercial Agriculture Fund to include innovative agriculture projects. Through this effort, the number and income of agropreneurs can be increased. An allocation of RM300 million will be provided; and
Fourth: Extending the contract farming programme in ensuring sufficient food supply. This programme will be handled by the Federal Agricultural Marketing Authority (FAMA), where agricultural produce will be marketed directly through FAMA to farmers’ markets across the country. A total of 4,500 agropreneurs will be involved, encompassing 7,000 hectares of land. For this, an allocation of RM14 million will be provided.
70. Recently, there are groups trying to promote the concept of a welfare state. We congratulate them, as they only now realise this concept. However, the Government has long implemented various programmes to safeguard the rakyat’s welfare, such as:
First: For every kilogramme of local super rice, the actual price is RM2.40. The rakyat pays RM1.80. The Government subsidises RM0.60 or 25% of actual price;
Second: For every kilogramme of sugar, the actual price is RM2.50. The rakyat pays RM2.30. The Government subsidises RM0.20 or 8% of actual price;
Third: For every kilogramme of cooking oil, the actual price is RM4.75. The rakyat pays RM2.50. The Government subsidises RM2.25 or 43% of actual price;
Fourth: For every kilogramme of flour, the actual price is RM1.90. The rakyat pays RM1.35. The Government subsidises RM0.55 or 29% of actual price; These basic food subsidies require an allocation of RM2.3 billion are enjoyed by all Malaysians regardless of their socioeconomic status.
71. Government subsidies are not limited to just food items. It also includes subsidies for petroleum products and cash assistance involving RM17 billion. This includes:
First: For every litre of RON95, the actual price is RM2.75. The rakyat pays RM1.90. The Government subsidises RM0.85 or 31% of actual price;
Second: For every litre of diesel, the actual price is RM2.66. The rakyat pays RM1.80. The Government subsidises RM0.86 or 32% of actual price;
Third: For every 14-kilogramme tank of cooking gas, the actual price is RM48.02. The rakyat pays RM26.60. The Government subsidises RM21.43 or 45% of actual price;
72. In addition, the Government will continue to provide subsidy for households with electricity bill of RM20 per month or less, implemented since 2009. This will involve an allocation of RM150 million and benefits 1 million households. All the subsidies, incentives and assistance totals RM33.2 billion. All these are carried out in the spirit of “People First.”
73. For 2012, the Government will allocate RM1.2 billion for the 1Malaysia Rakyat’s Welfare programme or KAR1SMA, which among others include providing assistance to poor senior citizens at RM300 per month; assistance to poor children of RM100 per month with a maximum of RM450 per month; as well as assistance and allowances to the disabled people between RM150 and RM300 per month. KAR1SMA, will ease the burden and benefit almost 500,000 rakyat.
74. The Government will undertake measures to ease rising costs and prices as well as reduce the burden of the rakyat, as follows:
First: Increase the number of Kedai Rakyat 1Malaysia (KR1M) nationwide in 2012. KR1M offers 250 types of 1Malaysia products, comprising consumer goods which are up to 40% cheaper. In view of the overwhelming response, the Government plans to open an additional 85 units in 2012 with an allocation of RM40 million;
Second: Open 30 units of Agro Bazaar Kedai Rakyat nationwide to market agriculture produce and 1Malaysia brand products. In addition, the Government will expand the sales of 1Malaysia products in all outlets under the Retail Shop Transformation (TUKAR) programme, FELDA retail stores and convenient stores at petrol stations nationwide; and
Third: Extend and promote the Menu Rakyat 1Malaysia which offers popular menu sets at reasonable prices with a maximum of RM2 for breakfast and RM4 for lunch. Currently, more than 700 food operators are participating and this will be extended to 3,000 operators by end-2012. To further expand this initiative, the Government encourages all cafeteria operators in Government offices and the private sector to implement the Menu Rakyat 1Malaysia.
75. To meet the demand for houses from those earning below RM3,000, the Government launched the My First Home Scheme in March 2011. To expand the scheme, the Government proposes to increase the limit of house prices from a maximum of RM220,000 to RM400,000. This improved scheme will be available to house buyers through joint loans of husband and wife beginning January 2012.
76. To enable buyers to own houses, the Government established the 1Malaysia People’s Housing (PR1MA) as the sole agency to develop and maintain affordable and quality houses, specifically for middle-income group. PR1MA will be the developer for projects on land owned by the Government. In this regard, the Government intends to develop several plots of Government-owned land around Sungai Besi and Sungai Buloh. The Government will also identify areas in the vicinity of MRT, LRT and other public transport system to be developed by PR1MA for housing projects.
77. In addition, PR1MA also welcomes the cooperation with private sector to develop similar projects. In this respect, several private developers responded to the Government’s call to provide affordable and quality housing. PR1MA will play a main role in ensuring that the distribution of the housing units will be transparent and fair through an open balloting system. In 2011, 1,880 houses will be built in Putrajaya and Bandar Tun Razak.
78. In 2012, a total of 7,700 houses will be built in Cyberjaya, Putra Heights, Seremban, Damansara and Bukit Raja. House prices under this scheme are lower than market prices as the land and facilitation funds are provided to developers. As an example, one apartment unit with an area of 1,000 square feet in Putrajaya is priced RM150,000 compared with the market price of RM220,000. The Government will also provide 100% stamp duty exemption on loan instruments for the purchase of houses.
79. Most houses are sold before construction starts and buyers bear risks of projects being delayed or abandoned. To protect buyers, the Government will encourage the construction of more houses using the build then sell concept. For this purpose, Islamic banks have agreed to provide shariah-compliant financing and undertake construction risks. Instalments only commence after the house is completed. This scheme will be implemented for houses costing RM600,000 and below.
80. There are many among the rakyat, especially the lower income group, who have yet to own houses. Therefore, the Government will continue to implement the Program Perumahan Rakyat (PPR) by building 75,000 units of affordable houses nationwide under the 10MP. In 2012, RM443 million is allocated for the construction of 8,000 units for sale and 7,000 units to be rented.
81. The Rumah Mesra Rakyat (RMR) programme, managed by Syarikat Perumahan Negara Berhad (SPNB), will be continued to help the low-income group to own decent houses. Under this programme, those with land but without a house or live in dilapidated houses are eligible for financing to build a house. SPNB will build 10,000 units in 2012. Each house costing RM65,000 will be sold for RM45,000 and the Government will subsidise RM20,000. For this, the Government will allocate RM200 million.
82. Apart from this, through the Abandoned Housing Rehabilitation Programme, the Government successfully rehabilitated and obtained the Certificate of Fitness (CF) for 82 projects involving more than 15,000 units. The Government will continue this noble effort with an allocation of RM63 million in 2012 to rehabilitate 1,270 abandoned houses. The Government will also allocate RM40 million for restoration and maintenance of public and private low-cost housing.
83. Expatriates also contribute to the economic development of the nation. The number of expatriates in Malaysia has increased to 41,000. To provide a more conducive environment for expatriates to continue working in Malaysia, the Government will allow the withdrawal of their Employees Provident Fund (EPF) contributions for the purchase of a house, similar to the facility available to Malaysians.
84. The Government sympathises with fishermen who do not have fix income and rely mainly on their daily catches. Most fishermen live in dilapidated houses. The Government will establish the Special Housing Fund for Fishermen with an allocation of RM300 million to build and refurbish houses with basic infrastructure.
85. The Government will continue to provide quality health services for the rakyat, with latest equipment and better ambience. In 2012, the health services sector will be allocated RM15 billion for operating expenditure and RM1.8 billion for developing expenditure. This involves, among others, constructing and upgrading hospitals in Bera, Kuala Krai, Dungun, Sri Aman and Tuaran as well as to improve the maternity block in Hospital Putrajaya. The Government will also upgrade 81 rural health clinics nationwide and launch 50 new 1Malaysia clinics.
86. The Government endeavours to provide comfort to the rakyat. At any one time, 80,000 people use the Pudu Raya Terminal which was previously run-down and not well-maintained but was upgraded with a cost of RM40 million. Now, the Pudu Raya Terminal with a complete facelift is renamed Pudu Sentral.
87. Similar measures will be undertaken to upgrade Hospital Kuala Lumpur, which is the centre for health services in the city with 3,000 outpatients seeking treatment every day. To ensure the comfort of city residents, this 141-year old hospital, which is the oldest in Malaysia, will be upgraded to be the country’s premier hospital with state-of-the-art equipment with an allocation of RM300 million. Of this, RM50 million will be utilised to construct a new outpatient block.
88. The Government sympathises with doctors who have to work continuously for more than 45 to 120 hours per week. This situation is clearly not conducive for them to provide quality service. To ease the situation, the Government introduced a flexible schedule with an average of 60 working hours per week for housemen. To replace the on-call allowance for housemen, the Government introduced a Special Flexible Working Allowance of RM600 per month, effective 1 September 2011. For medical officers and specialists, the Government will also increase the overnight on call allowance between RM30 to RM80, effective on the same date.
89. To increase disposable income and encourage savings among the low-income group, the Government will introduce Skim Amanah Rakyat 1Malaysia or SARA 1Malaysia. The scheme is available to households with income below RM3,000 per month and will benefit 100,000 households. Participants can apply for a RM5,000 loan with a repayment period of 5 years. At the end of 5 years, the participant is expected to receive an attractive net return. The scheme will be implemented by Permodalan Nasional Berhad in collaboration with selected financial institutions, effective January 2012.
90. To ensure that development of the Bumiputera community is in tandem with economic growth, the Government established the Unit Peneraju Agenda Bumiputera (TERAJU) to coordinate and drive the transformation process to strengthen Bumiputera’s participation in businesses. For this, TERAJU will guide 1,100 high performing Bumiputera companies with potential to be listed on Bursa Malaysia. In addition, MARA will also provide financing to qualified corporate personnel to purchase equities as well as acquire company’s based on the Management Buyout concept.
91. The development of entrepreneurs is an important factor to boost Bumiputera’s participation in the economic activities. In this regard, an integrated entrepreneur development programme will be implemented to enhance Bumiputera entrepreneur’s competitiveness, particularly in rural areas. Hence, the Government will allocate RM200 million for the development of Bumiputera entrepreneurs and contractors through the Ministry of Rural and Regional Development.
92. The Government is concerned with the plight of individual budget taxi owners arising from increasing operating costs. Furthermore, most taxis have exceeded their economic life. Apart from taking care of their welfare and improving taxi services, the Government proposes that budget taxi owners be given the following assistance:
First: 100% excise duty and sales tax exemptions on the purchase of new locally made taxis;
Second: Exemption from payment of excise duty and sales tax on taxis sold or transferred of ownership after seven years;
Third: Abolish road tax on all individually owned budget taxis;
Fourth: Provide interest rate subsidy of 2% on a full loan to purchase new locally made taxis. This loan scheme managed by BSN will be offered for a period of two years commencing 1 January 2012; and
Fifth: Provide assistance of RM3,000 for the disposal of old taxis exceeding seven years but less than 10 years. For taxis 10 years and above, assistance of RM1,000 will be given. This assistance is granted for the purchase of new locally made cars for a period of two years beginning 1 January 2012.
93. The Government hopes that these assistances will enable taxi drivers to deliver better quality service, be more customer-friendly and at the same time improve the country’s image as a tourist-friendly nation. For all the above assistances, private budget taxi owners are expected to benefit about RM7,560. This assistance will also be extended to individual owners of hired cars.
94. The Government is committed to ensure that no accused person is denied legal representation. Currently, about 80% of the accused in criminal cases appear in court without legal representation because of high legal costs. The National Legal Aid Foundation will ensure that every individual who is charged in court will be given free legal aid. For this, the Government will provide an additional RM10 million in 2012 bringing the total sum provided to RM15 million.
95. To assist the homeless, the Government established a social assistance centre known as Anjung Singgah. The centre provides employment referrals, temporary shelter and food, counselling as well as welfare assistance to the homeless. Currently, there are almost 1,400 homeless in Kuala Lumpur registered with the Social Welfare Department of whom, 250 are registered with Anjung Singgah. More centres will be established in Johor, Pulau Pinang and Sarawak.
96. The Government recognises the potential of women in leadership and managerial skills. Accordingly, the Government introduced a policy to encourage at least 30% women in top management and decision-making positions in the corporate sector. The Government will organise advanced management programmes for women with potential to become members of the board of directors, intensify advocacy activities for greater participation of women in the corporate sector and develop a database of potential women directors. Suitable training programmes to encourage female professionals to return to work will also be conducted. To implement these training programmes, the Government will allocate RM10 million.
97. In 2011, the Government allocated RM120 million to TEKUN. To incentivize small entrepreneurs, I propose that this allocation be increased to RM300 million. Amanah Ikhtiar Malaysia (AIM) will also provide RM2.1 billion for micro financing to entrepreneurs, particularly for women. From this total, RM100 million each is provided for Malaysian Indian and Chinese entrepreneurs, through a special unit under AIM. The Government proposes that micro financing loan instruments be given stamp duty exemption.
98. Currently, cervical cancer is the second highest cancer cases amongst Malaysian women. Advancement in medical sciences has enabled this illness to be prevented through immunisation. At the moment, the Ministry of Health in collaboration with the Ministry of Education has implemented free immunisation for Form 1 female students in Government schools, Government-aided schools, private and international schools from April to May 2010.
99. To enable more women to be immunised, the Government will provide free Human Papilloma Virus (HPV) immunisation which will be implemented nationwide by the Lembaga Pembangunan Perancang Keluarga Negara (LPPKN).The cost of immunisation is RM150 for three injections. For this, an allocation of RM50 million will be provided in 2012.
100. To promote the health of mother and child, a hospital for women and children will be constructed in Kuala Lumpur through PPP with a cost of RM700 million.
101. The contribution of the youth is critical to the realisation of the nation’s aspirations. The young generation must be equipped with training and skills to ensure they play an important role in the country’s development. The Government will allocate RM320 million to implement various activities comprising skills training, leadership programmes, resilience and entrepreneurship at the state and district levels including contribution to Majlis Belia Malaysia, Majlis Belia Negeri and Majlis Belia Daerah.
102. Our efforts today are not only for us but for the future of our children. The potential of each group must be recognised. Idealism must be polished, creativity must be inculcated and talent must be nurtured.
103. The Government also realises there are constrains of institution in producing creative ideas. We need to ask, with the stringent financial structure, will the ideas of people like Bill Gates, the late Steve Jobs, Michael Dell, the Wright brothers, Thomas Edison, be successful? Ideas worth billions of ringgit may have been wasted. In view of this, as a pioneer project, the Government will establish MyCreative Venture Capital with an initial fund of RM200 million.
104. A total of RM200 million will be allocated in 2012 for skill training to youth who do not continue their schooling through the Strategic Action for Youth (SAY 1Malaysia) programme. This scheme will provide various skills training which will be conducted by institutions such as Community College, Institut Kemahiran Mara, Institut Latihan Perindustrian and Giat Mara. Trainees will be provided practical trainings in GLCs and private companies to enable them to secure employment.
105. Currently, futsal is increasingly popular amongst youth and sports enthusiast. To promote this sport, the Government has built a total of 1,100 futsal courts nationwide, while another 527 courts are under construction. In view of the popularity of this sport, the Government will allocate RM15 million to build an additional 150 futsal courts to achieve the “One Court for One Mukim” target. To increase recreational activities particularly football, the Government will also allocate RM50 million to build football fields with artificial turfs, equipped with floodlights at 30 selected locations nationwide.
106. High-performance sports including football, badminton, squash, bowling, diving, archery and cycling will also be given attention. The Government will provide an additional allocation of RM30 million, making a total of RM84 million, to train young potential athletes so they can compete and succeed in international sports competition.
107. The welfare of senior citizens has never been neglected particularly for them to obtain public amenities such as medical and transport services. For this, I am pleased to announce, from 1 January 2012, all senior citizens aged 60 years and above will be exempted from paying the outpatient registration fee in all Government hospitals and health clinics including 1Malaysia clinics as well as the Government dental clinics. They will also be entitled to a 50% discount on LRT and Monorail fares.
108. In the 2011 Budget, to ensure private sector employee and self-employed to have sufficient savings upon retirement, I announced a tax relief up to RM6,000 for EPF and life insurance be extended to the Private Pension Fund now known as Private Retirement Scheme. In order to ensure the welfare of retirees upon reaching retirement age to live a comfortable life, I propose:
First: A new tax relief up to RM3,000 on contribution to a Private Retirement Scheme and insurance annuity for 10 years. Thus, the existing relief on Private Retirement Scheme and insurance annuity is rationalised;
Second: Tax deduction on employers’ contributions to a Private Retirement Scheme for their employees; and
Third: Tax exemption on income of Private Retirement Fund.
109. Currently, retirees have insufficient savings to bear the cost of living upon retiring. The study shows nearly 70% of the retirees used up all their savings within 10 years of their retirement. To increase savings for old age, the Government proposes that the employers’ contribution be increased from 12% to 13% for contributors who earn RM5,000 and below. This measure will benefit 5.3 million EPF contributors.
110. There are quarters who accused that the Government is only interested in mega projects worth billions of dollars. This accusation is grossly misleading. Is it not recorded in history that the Alliance Government was responsible for the establishment of the Ministry of National and Rural Development 50 years ago and pioneered a systematic development of rural areas? As a continuation of this noble tradition, the Government will give a new breath to rural development including traditional villages, long houses and new villages. Through the rural transformation programme or RTP, the Government will provide RM1 billion for the construction and upgrading of amenities such as multipurpose halls, surau, drains, small bridges, street lights including repairs of dilapidated houses. This initiative will be led by Implementation Coordination Unit (ICU).
111. Flood is one of the country’s main natural disasters and each year, the Government spends RM1 billion to bear the losses in various aspects of life. Currently, there are four million rakyat who still resides in flood-prone areas. As an early precaution, the Government will implement Flood Mitigation Plan (RTB) in Perlis, Perak and Johor with a cost of RM1 billion. In Perlis, two RTB projects will be undertaken namely upgrading of Timah Tasoh Phase Two dam as well as widening and deepening of Sungai Arau. In Perak, three RTB projects will be implemented in Sungai Kerian, Sungai Kurau and Kolam Bukit Merah. Meanwhile, in Johor, RTB projects will be implemented in the town and Sungai Segamat.
112. To ease the rakyat’s high cost of living, the Government proposes to provide one-off cash assistance, as follows:
First: Assistances of RM500 to households with a monthly income of RM3,000 and below. This unprecedented measure reflects the Government’s commitment to reduce the impact of the increasing cost of living on the low-income group. A total of 3.4 million or 53% of total households are expected to benefit from this assistance. This assistance involves an allocation of RM1.8 billion. To be eligible, the head of each household must register with the Inland Revenue Board Malaysia which is entrusted to implement this programme. This assistance will be distributed through banks and post offices;
Second: Schooling assistance of RM100 to all primary and secondary students from Year 1 to Form 5 nationwide. As this assistance is targeted to low- and middle-income groups, families who can afford may opt not to receive it. This measure will reduce schooling expenses and is expected to benefit 5.3 million students which involves an allocation of RM530 million. This will be implemented through BSN; and
Third: Book voucher worth RM200 to all Malaysian students in public and private local institutions of higher learning, matriculation as well as Form 6 students nationwide. This assistance is expected to benefit 1.3 million students with an allocation of RM260 million.
113. Currently, we are in the month of Zulhijjah and the fifth pillar of Islam calls its ummah towards Baitullah from every corner of the world. In this respect, the Government recognises that many of the low-income group face difficulties in registering due to insufficient funds to meet the minimum savings of RM1,300. Hence, to assist intending hajj pilgrims to register early to perform hajj, the Government will allow EPF to ring-fence RM1,300 from the Account 2 of contributors. Through this, the existing EPF savings of RM1,300 will remain with EPF but contributors are eligible to register for hajj.
114. The Government is confident that the civil servants will continue to enhance the quality of service and ensure that the national development agenda becomes a reality. Last August, the Government paid a bonus of half-month salary with a minimum payment of RM500 to civil servants and RM500 assistance to pensioners.
115. Recognising the support and commitment shown by civil servants towards achieving the national development goal, I am pleased to announce an additional bonus of half-month salary with a minimum payment of RM500 and an assistance of RM500 to Government pensioners. This will be paid together with the December salary this year. For 2011, this totals to one month pay with a minimum payment of RM1,000 for civil servants and RM1,000 for Government pensioners. This will benefit 1.3 million civil servants as well as 618,000 Government pensioners. The total bonus and assistance payments for this year accounts for RM4 billion.
116. Realising the increasing responsibility and heavy workload of members of Parliament and the need to internalise a culture of new politics, in accordance with the Political Transformation Programme which I announced recently, the Government will review the current allowances and benefits of members of Parliament, on condition that… both parties from the Government and the opposition agree, including the independent members. Upon this agreement, a revised allowances and benefits scheme will be made effective from 1 January 2012.
117. The 2012 Budget will continue with the tradition of placing the welfare of the rakyat and the well-being of the nation as our top priority. What is important is the creation of a brighter future for every Malaysian child, a future full of hope and prosperity, not fear or hatred. Over the last 30 months, the Government charted a clear path for our beloved nation to achieve the national vision. It’s not only about unity in diversity or improving public service delivery system or restructuring the economy but includes the Political Transformation Programme which will create a new path for Malaysia’s next phase of development where differences of ideas will be celebrated and not lead to never ending conflicts and where no individuals will be punished or side-lined for ideological differences. In an environment of global uncertainties, the strong support of the rakyat is mandatory for us to become a developed and prosper as a nation.
Mr. Speaker Sir,
I beg to propose.