Full Budget 2021 speech

INTRODUCING THE SUPPLY BILL (2021) IN DEWAN RAKYAT

FRIDAY, 6 NOVEMBER 2020

THEME: STAND UNITED, WE SHALL PREVAIL

INTRODUCTION

1. Bismillahirrahmanirrahim. In the name of Allah, the Most Gracious, the Most Merciful. Above all, to God we seek help and guidance. And His blessings upon Prophet Muhammad Sallallahualaihi Wassalam. Greetings to the Honourable Speaker, Honourable Members of Parliament, and beloved fellow Malaysians.

2. Alhamdulillah, thank you to Allah Subhanahu Wataala for giving me this opportunity to table Budget 2021, when the country and its people are in much need of help.

3. For those who are viewing in front of your TV, listening through the radio, or browsing from the new media, regardless of where you are tuning in from, today is the day where all the good wishes will be heard, which, God’s Willing will bring comfort to all.

Datuk Speaker Sir,

4. Referring to the command of His Majesty, Kebawah Duli Yang Maha Mulia Seri Paduka Baginda Yang Dipertuan Agong Ke-16, Al-Sultan Abdullah Ri'ayatuddin Al-Mustafa Billah Shah Ibni Almarhum Sultan Haji Ahmad Shah Al-Musta'in Billah, His Majesty has spoken, and imparted advice to serve as guidance for us. His Majesty has reminded all parties to set aside their differences, and resolutely unite to battle the COVID-19 pandemic. The Government deeply values the command and the support of His Majesty Yang di-Pertuan Agong that Budget 2021 is critical to safeguard the well-being of the Rakyat and the nation.

5. As such, I would like to humbly request the Honourable Members of this House to consider and evaluate Budget 2021 in the spirit of unity and openness, and with the aspiration for the greater good.

2020 ECONOMIC PERFORMANCE AND CHALLENGES

Datuk Speaker Sir,

6. The year 2020 is a tumultuous period for Malaysia, marked by many challenging circumstances. Never before in modern history has an epidemic wrought such profound changes. The spread of COVID-19 has not only taken people’s lives but stifled economies. There are no guidelines nor precedence that can be used as reference because this is an unprecedented crisis.

7. The crisis has shocked supply and demand, disrupted supply chains, and exerted great pressure on the business ecosystem. We also have to deal with uncertain external headwinds, falling commodity prices and limited fiscal space.

8. The International Monetary Fund or IMF has projected the global economy to contract by 4.4 percent this year. Global trade, meanwhile, is set to decline by 10.4 percent. Described as the worst economic crisis since the 1930s’ Great Depression, the COVID-19 pandemic has upended the economies in over 150 countries.

9. From the start, the Government has made it its utmost priority to protect the Rakyat’s lives above all else. That is why the Government has implemented the Movement Control Order (MCO) even though we know that the action, over the course of nearly two months, will impact the Rakyat’s economic and social activities. At that time, Bank Negara Malaysia (BNM) estimated that the country will lose between 2.0 to 2.4 billion ringgit daily with the closure of the economy.

10. In balancing our responsibility to protect the lives and livelihood of the Rakyat, the Government has to act quickly. As such, a phased economic recovery plan was introduced, centred on the 6R approach of Resolve, Resilience, Restart, Recovery, Revitalize and Reform.

11. At the initial Resolve stage, the Government’s priority was to flatten the curve of COVID-19. Meanwhile, during the second stage of Resilience, the PRIHATIN and PRIHATIN SME PLUS packages worth 260 billion ringgit were introduced to mitigate the impact of the economic shutdown. We entered the Restart phase in May 2020, when economic activities gradually reopened after we had successfully flattened the curve. Subsequently, the country shifted to the Recovery phase, when the Government activated the 35 billion-ringgit PENJANA package and 10 billion ringgit KITA PRIHATIN package. The total value of the stimulus packages announced by the Government is 305 billion ringgit or 20.7 percent of the country’s Gross Domestic Product (GDP).

12. The LAKSANA unit was established to ensure that these stimulus packages are implemented efficiently, with transparency, and driven by data. Based on a survey done by LAKSANA on the effectiveness of PRIHATIN, more than 80 percent of the 11 thousand respondents indicated that they were satisfied with the initiatives. I would like to thank LAKSANA and the more than 53 government agencies who have closely collaborated and shared data to ensure the successful implementation of these stimulus packages.

13. All these implemented initiatives are counter-cyclical measures, aimed to mitigate the impact of COVID-19. Alhamdulillah, we are seeing the country’s GDP showing signs of recovery from negative 28.6 percent in April 2020 to negative 3.2 percent in June. Early GDP estimates for July to September also indicate an encouraging growth trend.

14. In relation to this, taking into consideration the current environment, the country’s economic growth was revised for the year 2020 and is expected to contract 4.5 percent. For 2021, our economy is expected to recover and expand at a rate between 6.5 to 7.5 percent. This is in line with the proactive measures undertaken by the Government through the economic stimulus packages, the Budget 2021 initiatives and supported by the recovery of the global economy, which is forecasted to rebound by 5.2 percent.

15. One irrefutable fact that is worth reminding is, irrespective of the challenges, we have proved to the world that Malaysia can steer our own economy - whether in stormy seas or calm waters. Let us turn our experience in facing past economic crises into an anchor that keeps us committed, so that we remain steadfast in our endeavours, reasoned in our actions, and surefooted in mustering our collective efforts.

16. I am deeply touched by the #KITAJAGAKITA spirit among the Malaysians – I recall Encik Rosnizam Ishak, hailing from Bertam, who started marinated lamb business using the Bantuan Prihatin Nasional assistance and created job opportunities for locals. There is also Mr. Pajan Singh s/o Kirpal Singh, who provided free accommodation for frontliners serving in Kuantan during the period of MCO till the CMCO, and Mrs. Michelle Kugan, an entrepreneur who sells crystal and pearl fashion accessories, benefitted from the microcredit loan under TEKUN to sustain her business in Tuaran, Sabah. It is in this spirit and undertaking, that Budget 2021 has been formulated for Malaysians with the theme “Resilient as One, Together we Triumph”.

BUDGET 2021 GOALS

Datuk Speaker Sir,

17. In preparing Budget 2021, for the first time ever, budget consultations covered all 14 states, and involved more than 38 dialogues covering over 40 businesses and industries. The Ministry of Finance had engagement sessions with leaders of all Federal ministries and State governments, various captains of industry, academicians, non-governmental organisations, political party leaders, and most importantly, Malaysians across the full spectrum, from youth, women, parents to senior citizens. I would like to express my heartfelt appreciation to all parties who have contributed their time to share their ideas and suggestions.

18. In relation to this, as the anchor of the fifth 6R strategy of Revitalize, Budget 2021 was formulated based on Three Integral Goals:

FIRST : Rakyat’s Well-being;
SECOND : Business Continuity; and
THIRD : Economic Resilience

19. The three goals are a continuity of the PRIHATIN, PRIHATIN SME PLUS, PENJANA and KITA PRIHATIN stimulus packages. Besides a more targeted approach, the Government will strike a balance between the government’s financial sustainability, reduce the urban and rural development gap, and uphold the values to shape the economy that we aspire for through this Budget 2021.

FIRST GOAL: RAKYAT’S WELL-BEING

Datuk Speaker Sir,

20. The first goal of Rakyat’s Well-Being will be manifested holistically, anchored on the fundamental understanding of the people’s problems and worries. Their well-being remains our most important concern. Seikat bak sirih, serumpun bak serai.

Strategy 1: COVID-19 Pandemic and Public Health

21. Our first strategy is to overcome the COVID-19 pandemic and protect public health. Last August, Members of this august House have wholeheartedly approved two very important Acts to address the COVID-19 pandemic.

22. The first is the Temporary Measures to Reduce the Impact of Coronavirus 2019 (COVID-19) 2020 Act. This Act provides exemption or relief to individuals who are unable to fulfill their contractual obligations such as rent payments due to the spread of the epidemic. A COVID-19 Mediation Center was also established to assist the B40 and M40 groups as well as micro industries resolve disputes related to their contractual obligations.

23. The second, the Temporary Measures for Government Financing (Coronavirus Disease 2019) Act allows the Government’s statutory debt level to be temporarily raised up to 60 percent of GDP, from 55 percent. Under this Act, Parliament has approved an allocation ceiling of 45 billion ringgit for the COVID-19 Fund.

24. During the tabling of this Act, there were Members of Parliament who called for a higher expenditure ceiling for the COVID-19 Fund. Taking into account the current epidemic wave and requirements needed until 2022, the Government proposes to submit amendments to the Schedule of the Act to this esteemed House to raise the ceiling of the COVID-19 Fund, by 20 billion ringgit, to 65 billion ringgit. The main purpose is to fund the KITA PRIHATIN package, additional assistance for the people’s well-being, needs of our frontliners’ and expected procurement of vaccine. I hope the Members of this august House will collectively approve this proposal.

Datuk Speaker Sir,

25. This year, the Government has allocated 1.8 billion ringgit for the implementation of the movement control and public health service needs related to COVID-19 including purchase of Personal Protective Equipment (PPE), reagent and consumables.

26. Next year, an additional 1 billion ringgit will be allocated to stem the third wave of COVID-19. This allocation will, among others, cover:

First: 475 million ringgit for the purchase of reagent, test kits, and consumables for Ministry of Health’s (MOH) usage;
Second: 318 million ringgit to provide PPE and hand sanitisers to MOH front liners;
Third: 150 million ringgit to the National Disaster Management Agency to coordinate efforts to fight COVID-19;
Fourth: 50 million ringgit for the purchase of equipment, laboratory test supplies, and medicine for university teaching hospitals; and
Fifth: Procure equipment required to resume dental services, virtual clinical services, and preparation of preliminary zone facilities and thermometers at health facilities to meet the Standard Operating Procedures (SOP).

27. The Government values the toil and sacrifices of the frontliners in managing this COVID-19 pandemic. Since March this year, the Government has accorded them with a COVID-19 Special Allowance of 600 ringgit per month, and this will be continued until this pandemic is successfully addressed. In addition, the Government has agreed to provide a one-off payment of 500 ringgit in appreciation of the contribution by the MOH frontliners, which is expected to benefit 100 thousand medical staff.

Datuk Speaker Sir,

28. The war is not over until and unless an affordable and accessible vaccine is available. The Government is committed to acquire COVID-19 vaccine supplies, including through participation in the COVID-19 Vaccine Global Access (COVAX) programme. These COVID-19 vaccine supplies are expected to cost more than 3 billion ringgit to meet the needs of Malaysians.

29. In addition, to encourage the Rakyat to seek vaccination as a preventive measure against diseases, the Government has agreed to expand the scope of the tax relief scope for medical treatment expenses covering vaccination expenses such as pneumococcal, influenza and COVID-19. This tax relief, given on vaccination expenses is for the taxpayer, spouse and child limited up to 1,000 ringgit.

30. The Government will also increase the tax relief limit on medical expenses for self, spouse and child for serious diseases from 6,000 ringgit to 8,000 ringgit and tax relief limit for expenses on full medical check-up from 500 ringgit to 1,000 ringgit.

31. In addition, the limit of tax relief on expenses for medical treatment, special needs and parental care is also increased from 5,000 ringgit to 8,000 ringgit.

32. During this pandemic, the Government has received feedback that mental health problems is one of the serious issues faced by the community. The MOH’s Psychosocial Helpline has received more than 35 thousand phone calls since March until October 2020 on, among others, problems related to emotional stress, anxiety and depression. As such, an allocation of 24 million ringgit will be provided to address this issue, including strengthening the Mental Health, Violence and Injury Prevention, and Substance Abuse Programmes.

Datuk Speaker Sir,

33. Up till 31 October 2020, mySalam has paid claims relating to hospitalisation and critical illnesses worth 64 million ringgit to 56 thousand patients. At the same time, 19 thousand individuals have received claims of 11 million ringgit relating to COVID-19. To enhance this programme, the Government will broaden the mySalam’s coverage to medical devices such as heart stent or prosthesis.

34. In addition to health protection, the Government plans to expand the social protection for the B40 group through the Perlindungan Tenang Voucher Programme. Under this programme, all B40 aid recipients will be given a 50 ringgit voucher as financial aid to purchase Perlindungan Tenang products such as life takaful and personal accident. At the same time, the Government will also extend the stamp duty exemption period on all Perlindungan Tenang products with an annual premium or contribution value not exceeding 100 ringgit for another 5 years until year of assessment 2025.

Datuk Speaker Sir,

35. Attention will also be given to other public health segments. The Government will continue the pneumococcal vaccine programme for children with an allocation of 90 million ringgit that is expected to benefit 500 thousand children annually. In addition, 6 million ringgit will be allocated for the procurement of biologic medicine for various rheumatology illnesses such as Rheumatoid Arthritis.

36. The Government has also allocated 25 million ringgit for home-based Peritoneal Dialysis treatment programme to enhance the quality of life for kidney patients as well as reduce the waiting time and overcrowding at hospitals.

Strategy 2: Safeguarding the Welfare of Vulnerable Groups

Datuk Speaker sir,

37. The second strategy focuses on safeguarding the welfare of vulnerable groups. Based on the Household Income and Basic Amenities Survey 2019 by the Department of Statistics Malaysia, the national Poverty Line Income (PLI) has increased to 2,208 ringgit per month for each household. This means, more than 400 thousand households earning less than the PLI now fall under the poor category.

Measure 1: Improving Financial Assistance

38. In relation to this, to enhance the welfare of vulnerable groups, the Government has agreed to increase the monthly rate of financial assistance as follows:

First: The rate for Financial Assistance for Person With Disabilities (OKU) who are Incapable of Work is increased from 250 to 300 ringgit;
Second: The rate for Financial Assistance for Older Persons, Carers of Bed-ridden Disabled Person (OKU) and Chronically Ill Patient is increased from 350 to 500 ringgit;
Third: The rate for Incentive Allowance for Disabled Workers is increased from 400 to 450 ringgit; and
Fourth: The rate for Financial Assistance for Children is increased from 100 ringgit per child with a maximum of 450 ringgit per family, to 150 ringgit per child aged seven years to 18 years, or 200 ringgit per child aged six years and below with a maximum of 1,000 ringgit per family. It is hoped this increase will help with childcare and nutritious food.

For example, if Puan Safiah has three children, with two of them below the age of six years, and a disabled husband who works, her family will receive monthly assistance of 1,000 ringgit per month.

39. The rate increase involves an allocation of 2.2 billion ringgit, i.e. an additional 700 million ringgit, and will benefit more than 400 thousand beneficiaries.

Datuk Speaker Sir,

40. Bantuan Prihatin Nasional (BPN) was introduced to alleviate the cash flow burden of the rakyat affected by COVID-19. For the year 2020, the BPN and Bantuan Sara Hidup (BSH) have paid out 21 billion ringgit to 10.6 million beneficiaries. In January 2021, a BPN2.0 payment of 2.2 billion ringgit will be paid out.

41. Under Budget 2021, the Government will continue to implement and improve the cash assistance in a more targeted manner. For the year 2021, the Government will replace the Bantuan Sara Hidup (BSH) with the Bantuan Prihatin Rakyat (BPR), with higher rates of assistance and income category as follows:

First: Families with monthly household income of less than 2,500 ringgit and has up to one child will receive assistance of 1,200 ringgit, while households with two or more children will receive assistance of 1,800 ringgit;
Second: Families with monthly household income between 2,501 ringgit to 4,000 ringgit and one child, will receive BPR assistance of 800 ringgit, while households with two or more children will receive assistance of 1,200 ringgit;
Third: The Government will also assist families with monthly household income between 4,001 ringgit to 5,000 ringgit. This category will receive 500 ringgit for those with up to one child, and assistance of 750 ringgit for households with two or more children; and
Fourth: Single individuals earning 2,500 ringgit and below will receive assistance of 350 ringgit. Not only that, the age limit eligibility for this group has been lowered to 21 years, compared to the condition before this of 40 years.

Overall, the BPR cash assistance is expected to benefit 8.1 million individuals with an allocation of 6.5 billion ringgit, compared to 4.3 million beneficiaries with an allocation of 5 billion ringgit prior to this under the BSH.

42. Additionally, the Government will allocate 1.5 billion ringgit to implement the Jaringan PRIHATIN Programme to alleviate the financial burden of the B40 group in accessing internet services. During the first quarter of 2021, an estimated 8 million individuals in the B40 category will each be eligible to receive a telecommunication credit worth 180 ringgit. This credit can be used for internet subscription, or defray part of the cost to buy new mobile phones. At the same time, telecommunication companies will match by providing benefits valued at 1.5 billion ringgit such as free data.

Measure 2: Alleviating the Rakyat’s Cost of Living

Datuk Speaker Sir,

43. The Government is pleased to announce various key initiatives to alleviate the financial burden of the Rakyat during this health crisis:

44. The first initiative is the income tax reduction for resident individuals which will be reduced by 1 percentage point for the chargeable income band of 50,001 to 70,000 ringgit. This is estimated to benefit 1.4 million taxpayers.

45. The government is cognisant of the difficulties faced by the Rakyat especially those with loans and affected by COVID-19. Since April till September 2020, Malaysia was the first country in the world to provide loan moratoriums automatically to aid borrowers. With the transition to the Targeted Loan Repayment Assistance (TRA) beginning 1 October 2020, banks have continued to offer extended moratorium and other forms of repayment assistance. To date, more than 650 thousand applications for repayment assistance have been received with a high approval rate of 98 percent. Assistance in the form of extending the moratorium or flexibility in repayments has been provided to those who have lost their jobs in addition to individuals and SMEs whose incomes have been severely affected by the COVID-19 pandemic. At the same time, banks have reported that 85 percent of borrowers have resumed repayment of their loans without seeking assistance since the end of the automatic moratorium period.

46. As the second initiative, I am pleased to announce that banks will enhance the TRA to B40 borrowers who are BSH recipients or BPR, and to micro enterprises with loans of up to 150 thousand ringgit. Borrowers in this category will be given the following options:

Option 1: A moratorium on their instalments for a period of 3 months; or
Option 2: Reduce their monthly repayment by 50 percent for a period of 6 months

Eligible borrowers will only need to contact their banks to choose the options and complete the documentation.

47. For the M40 borrowers, the application process for the repayment assistance will be simplified. Borrowers would only need to make a self-declaration of the reduction in income in order to secure the repayment assistance. The facility for the B40 and M40 will commence in December 2020.

48. As a caring Government, prior to making a decision, we must be careful to balance the immediate short-term needs of the rakyat against their future welfare.

49. As the third initiative, the minimum employee EPF contribution rate is reduced from 11 to 9 percent beginning January 2021 for a period of 12 months to increase take-home pay. This will benefit EPF contributors with a potential cash flow of up to 9.3 billion ringgit.

50. EPF had introduced in April 2020 the i-Lestari withdrawal facility which allowed members to withdraw 500 ringgit a month for 12 months with a total of up to 6,000 ringgit. This facility has benefitted 4.7 million members with a total value of 11.6 billion ringgit.

51. As the fourth initiative, which I understand is much awaited, the Government is pleased to announce the facility to withdraw EPF savings from Account 1 on a targeted basis. The amount allowed will be 500 ringgit a month with a total of up to 6,000 ringgit over 12 months. This withdrawal will assist members who have lost their jobs and is expected to lighten the financial burden of approximately 600 thousand affected contributors. Taking into account both i-Lestari and this Account 1 withdrawal facility, the total allowed withdrawal will be up to 12 thousand ringgit. It is projected that total withdrawals from Account 1 will involve 4 billion ringgit. Eligible contributors can apply beginning January 2021.

52. The fifth initiative is the Enhancement of the Employment Insurance Scheme. The Job Search Allowance for those covered under the SOCSO’s Employment Insurance System is currently for 6 months starting at a rate of 80 percent of the employee's monthly salary and gradually decreases to the rate of 30 percent of the employee's monthly salary. For the year 2021, the Job Search Allowance will be extended by 3 months and the rate will be 80 percent in the first month, 50 percent for the second till the sixth month and subsequently 30 percent for the last three months. For this purpose, an allocation of 150 million ringgit will be provided and is expected to benefit up to 130 thousand job seekers.

53. Lastly, to assist taxpayers who have lost their jobs due to the current economic condition arising from the COVID-19 pandemic, it is proposed that for years of assessment 2020 and 2021 the income tax exemption limit for compensation for loss of employment be increased from 10 thousand to 20 thousand ringgit for each full year of service.

Datuk Speaker Sir,

54. For the year 2021, the Government will allocate nearly 28 billion ringgit specifically for subsidies, aids and incentives. Among others, these include aid for the community in the form of transportation and welfare, and subsidies to control the price increase of goods and services.

55. The Government will increase the allocation from 150 million to 200 million ringgit for the Community Drumming Programme which will enable the programme to be broadened to cover 34 new areas such as Pulau Sakar in Sabah and Ulu Mujok in Sarawak. Through this initiative, more than 1.1 million Rakyat will have access to basic goods such as rice, sugar, flour, cooking oil, LPG gas, RON95 petrol and diesel at regulated prices.

Measure 3: Assistance to Farmers and Fishermen

56. To assist rubber smallholders during the low rubber prices condition, the allocation for the Rubber Production Incentive will be doubled from 150 million ringgit to 300 million ringgit. This increase will help stabilise the income of 150 thousand rubber smallholders.

57. In addition, an allocation of 1.7 billion ringgit will be provided in the form of subsidy, aid and incentive to farmers and fishermen. This includes paddy price subsidy of 570 million ringgit, subsidy and incentive for paddy crop of 960 million ringgit, including subsidy for Padi Bukit fertilizers of 40 million ringgit. These assistances will benefit more than 300 thousand paddy farmers nationwide including Padi Bukit farmers in Nabawan, Sabah and Kanowit, Sarawak.

58. In line with the announcement by YAB Prime Minister, allowance for fishermen will be increased from 250 ringgit to 300 ringgit per month commencing in the year 2021. More than 40 thousand fishermen will benefit from this assistance involving an allocation of 151 million ringgit.

59. To assist FELDA settlers, the Government will allocate 400 million ringgit to write-off the interest on the settlers’ debt as well as development programmes for settlers to generate additional income.

Strategy 3: Generating and Retaining Jobs

Datuk Speaker Sir,

60. The third strategy is to generate and retain jobs. The average unemployment rate over the last ten years was 3.2 percent or around 500 thousand unemployed. As a result of COVID-19, this has increased to 5.3 percent or 820 thousand unemployed in the month of May 2020, which is the highest since 1989. As a result of the implementation of the PRIHATIN and PENJANA initiatives, the unemployment rate has reduced to 4.7 percent in August 2020.

61. Next year, the Government will implement the Skim Jaminan Penjanaan Pekerjaan (JanaKerja) which will provide 500 thousand new job opportunities including skills development and retraining programmes worth 3.7 billion ringgit.

Measure 1: PenjanaKerjaya Incentive (Hiring Incentive)

62. The Government will also continue the hiring incentive programme under PERKESO, which is now known as PenjanaKerjaya with several enhancements as below:

First: Incentive for employees earning 1,500 ringgit and above will be enhanced from a flat rate of 800 ringgit per month to 40 percent of monthly income, subject to a maximum incentive of 4,000 ringgit;
Second: To encourage employment for the disabled, long –term unemployed, and retrenched workers, employers will be given an additional incentive equivalent to 20 percent of the employee’s monthly income making the total incentive to employers’ amount to 60 percent; and
Third: For sectors with a high reliance on foreign workers such as construction and plantations, a special incentive of 60 percent of monthly wages will be provided whereby 40 percent will be channelled to the employer while 20 percent will be channelled as a wage top up to the local worker replacing the foreign worker.
The above three incentives will be given for a period of six months; and
Fourth: For those employed under the PenjanaKerjaya, the maximum training rate which can be claimed by employers will be increased from 4,000 to 7,000 ringgit to enable workers to take up high skilled training and professional certifications.

63. To ensure the success of these four PenjanaKerjaya initiatives, a total of 2 billion ringgit will be allocated, which is expected to increase the employment opportunities for 200 thousand job-seekers.

64. I would like to take this opportunity to announce the formation of a National Employment Council which will be chaired by YAB Prime Minister. This council will coordinate various initiatives cutting across ministries and agencies which create job opportunities, skills enhancement and training for employees. The LAKSANA unit will be responsible to monitor the effectiveness of all these initiatives to ensure the Rakyat continues to receive employment opportunities.

Measure 2: Reskilling and Upskilling

Datuk Speaker Sir,

65. In addition, reskilling and upskilling programmes will continue to be implemented. For the year 2021, a total of 1 billion ringgit will be allocated benefitting 200 thousand trainees as follows:

First: 150 million ringgit will be allocated for the Ministry of Higher Education professional certification (KPT-PACE) whereby fresh graduates will each be eligible for a voucher worth 3,000 ringgit to pursue a professional certification course at public or private universities. It is expected that 50 thousand graduates will benefit from this programme;
Second: 100 million ringgit to the Human Resources Development Fund (HRDF) to implement trainings in collaboration with private-sector employers;
Third: 100 million ringgit to MDEC to transition existing workforce to fill the growing needs in the ICT industry;
Fourth: 100 million ringgit to regional corridor authorities, mainly IRDA and SEDIA to provide new skills training to workers badly affected by the closure of borders to foreign tourists, in order to assist them in securing new employment or source of income; and
Fifth: 30 million ringgit to PERHEBAT for entrepreneurship training programmes that will benefit 12 thousand veterans of the Malaysian Armed Forces.

66. To encourage Malaysians to upskill and venture into a new area of employment, the scope of relief for tuition fee be expanded to cover expenditures incurred for attending up-skilling courses provided by certified bodies limited to 1,000 ringgit for each year of assessment.

Measure 3: MySTEP

Datuk Speaker Sir,

67. The Government will introduce MySTEP or Short-term Employment Programme with an allocation of more than 700 million ringgit. This initiative will offer 50 thousand job opportunities on a contract basis in the public sector and Government Linked Companies (GLC) starting January 2021.

68. Under this initiative, 35 thousand job opportunities will be offered in the public sector, with priority to fill up positions such as nurses, medical attendants, social welfare officers and temporary teachers. Meanwhile, GLCs will offer 15 thousand job opportunities that prioritise technical and financial fields as well extending this opportunities for new graduates to participate in apprenticeship programmes.

Measure 4: Targeted Wage Subsidy

69. Through the stimulus packages, the wage subsidy was provided for up to 9 months with an allocation of more than 15 billion ringgit. As at 31st October 2020, the Government has channelled 12.5 billion ringgit to fund SOCSO Wage Subsidy Programme which has helped 2.7 million workers and more than 330 thousand employers.

70. However, many employees are still affected especially in the tourism sector. Therefore, the Government will extend the implementation of the Wage Subsidy Program for another three months with a more targeted approach, specifically for the tourism sector, which includes the retail sector at a rate of 600 ringgit per month for workers earning 4,000 ringgit and below. In addition, the limit of 200 employees per application will be increased to 500 employees. A total of 1.5 billion ringgit is allocated for this purpose and is expected to help about 70 thousand employers and 900 thousand employees.

Measure 5: Social Protection

Datuk Speaker Sir,

71. Insurance has a low penetration rate in Malaysia and it is among factors that undermine financial security for individuals and families. Hence, EPF will allow members to withdraw from EPF Account 2 to purchase insurance and takaful products which are approved by EPF relating to life and critical illnesses coverage for themselves and their family.

72. To further encourage old-age savings through Private Retirement Scheme (PRS), individual income tax relief of up to 3,000 ringgit on the PRS contributions will be extended until the year of assessment 2025.

73. Subsequently, the Government provided 24 million ringgit for full contributions under the SOCSO Employment Injury Scheme benefitting 100 thousand employees from the following groups:

First: Members of the Malaysian Armed Forces Volunteers, Police Reserve Volunteers, Malaysian Civil Defense Volunteers, and Malaysian Maritime Volunteers;
Second: Guru Takmir, Imam, Bilal, Tok Siak, Noja, and Merbot;
Third: Contract for Service Public sector workers; and
Fourth: To appreciate the contribution of delivery riders who were in the frontline during the movement control period, this initiative is also extended to 40 thousand delivery riders.

Strategy 4: Prioritising the Inclusiveness Agenda

Datuk Speaker Sir,

74. Strategy four is to prioritise the inclusiveness agenda. In light with the Shared Prosperity Vision 2030, the inclusiveness agenda will be a priority towards a more holistic development.

Measure 1: Empowering the Bumiputera

75. The Government will continue to pursue efforts to support the Bumiputera development agenda in order to reduce the disparity between races. For the year 2021, a total of 11.1 billion ringgit will be provided, an additional 3.1 billion ringgit compared to the year before this.

76. Among others, a total of 6.5 billion ringgit will be allocated to provide access to quality education to Bumiputera institutions such as Majlis Amanah Rakyat (MARA) and Universiti Teknologi MARA (UiTM) to offer specific programmes such as digitalization of TVET learning methods, and upgrading from certificate level programmes to diploma.

77. Meanwhile, to boost and empower Bumiputera entrepreneurs, a total of 4.6 billion ringgit will be provided for the following purposes:

First: 510 million ringgit for the purpose of financing Bumiputera SMEs and micro SMEs through TEKUN and PUNB;
Second: 800 million ringgit for capacity building programmes by Bank Pembangunan Malaysia and SME Bank;
Third: 2 billion ringgit allocated to assist the financing of Bumiputera SMEs through Syarikat Jaminan Pembiayaan Perniagaan (SJPP); and
Fourth: 1.3 billion ringgit for various capacity building programmes, including professional development, Dana Kemakmuran Bumiputera as well as specific programmes or projects specifically for Bumiputeras.

78. For everyone’s information, Pelaburan Hartanah Berhad or PHB has successfully developed a private hospital worth 300 million ringgit on a Malay reserve land in Sungai Penchala. As such, the Government intends to optimize the value of Malay reserve land in strategic locations. For this purpose, a total of 750 million ringgit will be provided to PHB under the Twelfth Malaysia Plan (RMKe-12) to increase the value of Bumiputera holdings in real estate especially for commercial developments on Malay reserve land.

Measure 2: Upholding Islam Tenets

Datuk Speaker Sir,

79. Development of Islam will continue to be strengthened. 2021 Budget will allocate 1.4 billion ringgit for Islamic affairs and development under the Prime Minister's Department.

80. The Government will also enhance the management of endowment (wakaf) through collaboration between Yayasan Wakaf Malaysia with Federal Government agencies, GLCs and Government Linked Investment Companies (GLIC). A National Wakaf Masterplan will be created to ensure a more efficient endowment management to maximise the mobilization of future endowment assets.

81. In addition, Permodalan Nasional Berhad (PNB) through Amanah Saham Nasional Berhad or ASNB will introduce wakaf services to all ASNB unit trust holders. Under this service, unit holders can endow some of their units into ASNB wakaf fund and be eligible for an income tax deduction. Returns from the wakaf fund will be channelled to the wakaf projects of national interest that will be identified by PNB.

82. In appreciation of the contribution of 4 thousand Guru Takmir who galvanise the community at the kariah level, the Government has agreed to increase the allowance rate of Guru Takmir from 800 ringgit to 900 ringgit per month.

83. In addition, I’m pleased to announce a one-off special payment of 500 ringgit to the Imam, Bilal, Tok Siak. Noja, Merbot, Guru Takmir and Guru Kafa. This special assistance is expected to benefit almost 70 thousand people.

Measure 3: Enhancing the Role of Women

Datuk Speaker Sir,

84. The Government values the contribution of women to nation building. To empower women entrepreneurs, 95 million ringgit will be provided for special micro credit financing through TEKUN, MARA and Agrobank. In addition, 50 million ringgit will be provided to the Islamic Economic Development Foundation (YaPEIM) to support Islamic Pawnbroking through Ar-Rahnu BizNita.

85. Training programmes especially in the aspect of marketing, labelling and packaging in addition to business technical guidance will be given to more than 2,000 Women Entrepreneurs Micro Entrepreneurs Business Development Programmes, BizMe.

86. The Government recognises the importance of addressing the issue of domestic violence. To this end, the Government will provide 21 million ringgit to establish a One-Stop Social Support Centre. This centre in collaboration with NGOs will provide social protection and moral support to women facing domestic problems divorce and abuse.

87. I understand that many front liners face difficulties in securing childcare services. In this respect, in order to enhance the support system for front liners and working women, 30 million ringgit will be provided for the establishment of childcare centres or TASKA in Government buildings, especially in hospitals. At the same, for the private sector a matching grant of up to 20 million ringgit will be provided to encourage the private sector employers to provide childcare centres for their employees.

88. In addition, 10 million ringgit will be provided for cervical cancer screening and subsidy incentives for mammograms to women who are of high risk of breast cancer.

Measure 4: Community-based Initiatives

Datuk Speaker Sir,

89. The Government will also focus on community development programmes covering all levels of society. For the Chinese community, a total of 177 million ringgit will be provided for programmes to improve educational facilities, housing and the development of new villages, as well as financing facilities through Bank Simpanan Nasional (BSN). For the Indian community, a total of 100 million ringgit is allocated to the Malaysian Indian Transfomation Unit (MiTRA) to the elevate the socio-economy status of the Indian community.

90. In addition, TEKUN will provide 20 million ringgit specifically for the Skim Pembangunan Usahawan Masyarakat India, SPUMI and 5 million ringgit for entrepreneurship development for other minority communities.

91. To promote the culture of volunteerism at the community level, the Government will increase the grants to Rukun Tetangga Areas from 4,800 ringgit to 6,000 ringgit each, with an allocation of almost 50 million ringgit. These grants will benefit more than 8,000 Rukun Tetangga Areas.

92. The Government will also allocate 50 million ringgit for repairs, maintenance and small development projects for places of worship in areas under the Local Authority. This allocation also includes the implementation of unity programmes in collaboration with the management of the places of worship and the local community.

Datuk Speaker Sir,

93. For 2021, the Malaysian Prisons Department will be allocated 20 million ringgit to implement Human Development Program among others to provide skills training to prisoners. Through this program, inmates have produced various products under the MyPRIDE brand. The songket I’m wearing today is a Royal Pahang “tenun” woven by the inmates of the Penor Prison in Pahang.

94. To encourage employers to provide employment opportunities for ex-convicts and former drug addicts and integrate them into the society, further tax deduction on remuneration given to employers who employ ex-convicts, parolees, supervised persons and ex-drug dependants is extended until year of assessment 2025.

Datuk Speaker Sir,

95. The Malaysian government is cognisant of the plight of the artists including the production crew who are also impacted by this COVID-19 pandemic. In this regard, a total of 15 million ringgit will be allocated to the Cultural Arts Economic Development Agency or CENDANA to implement various arts and culture programs that will benefit more than 5,000 artists and the production crew.

96. The Government will continue its emphasis into the well-being of the Orang Asli community. An allocation of 158 million ringgit will be provided. This allocation include the implementation of social assistance programmes and the Integrated Development Programme for Orang Asli Villages. The government will also upgrade and construct 14 new kindergartens at Pos Slim Sungai Kinta, Perak and and Pos Sungai Kelai Jempol, Negeri Sembilan.

97. The government is very concerned about the issue of land boundary delineation and land gazetting which has long been voiced by the Orang Asli community. The Government is pleased to provide 5 million ringgit to carry out land survey work for demarcation of borders in 21 Orang Asli villages. In addition, a total of 41 million ringgit is allocated for the Native Customary Rights program in Sabah and Sarawak.

Datuk Speaker Sir,

98. The Government will continue to look after the welfare of the elderly and the disabled through the Home Help Services Programme. In relation to this, the honorarium value for volunteers under this programme will be increased from 150 ringgit to a maximum of 400 ringgit. Meanwhile, the assistance value to the vulnerable group of the programme will also be increased from 30 ringgit to 80 ringgit. The increase is expected to benefit more than 2,000 volunteers and more than 8,000 senior citizens and the disabled.

99. Further, to assist individual taxpayers with disabled spouse, additional tax relief limit for disabled spouse will be increased from 3,500 ringgit to 5,000 ringgit.

100. Currently, the monthly payment rate received by supervisors and officers under the Community Rehabilitation Organization or PDK has not been reviewed since 2008. Therefore, reflecting the Government's concern, for next year, the staff rate will be increased from 800 ringgit to 1,200 ringgit per month, while the rate of supervisors will be increased from 1,200 ringgit to 1,500 ringgit per month. This increase will benefit 3,500 PDK staff and supervisors nationwide, with an allocation of 100 million ringgit.

101. In addition, the Government will also increase the annual financial aid to operate the Senior Citizens Activity Centre (PAWE) managed by Non-Governmental Organisations (NGOs) from 33 thousand ringgit to 50 thousand ringgit. This increase is expected to benefit 285 PAWEs nationwide.

102. To encourage employment opportunities for senior citizens, further tax deduction on remuneration given to employers who employ senior citizens is extended until year of assessment 2025.

103. The government will also allocate 170 million ringgit for early childhood education programmes by the Community Development Department or KEMAS. This allocation among others is to fund Supplementary Food Assistance, Per Capita Assistance as well as maintenance and repair for both TABIKA and TASKA.

104. To alleviate the cost of living for the urban B40 groups especially working parents, the Government will establish Community Centers as transit centres for children to attend after school. With an allocation of 20 million ringgit, the Community Centre in collaboration with NGOs will be equipped with self-care facilities, tuition classes, libraries and mentor guidance programmes.

Measure 5: Enhancing Rural Infrastructure

Datuk Speaker Sir,

105. The Government will continue to focus on reducing the urban and rural development gap. For this purpose, 2.7 billion ringgit will be channelled to implement various rural infrastructure improvement programmes and projects as follows:

First: 1.3 billion ringgit to implement rural and inter-village road projects spanning 920 kilometres that benefits more than 290 thousand people;
Second: 632 million ringgit allocated for rural and alternative water supply with a target of 4,800 houses;
Third : 250 million ringgit provided for rural electricity supply with a target of 1,100 houses;
Fourth 55 million ringgit for the Home Assistance Programme to the poor which is building new houses and repairing homes with a target of 15 thousand houses; and
Fifth: 121 million ringgit to install 27 thousand units of lamps as well as to cover operational and maintenance costs of 500 thousand units of street lights in villages.

106. In addition, the Government will broaden mobile banking services in Sabah and Sarawak, modelling after the initiative by the Sarawak State Government. This measure can help communities that have difficulties to access basic banking services such as fund transfer, bill payments and facilities to withdraw Government assistances such as BPR.

107. The Government is committed to ensuring that road facilities in all states are optimally maintained. Accordingly, the eligibility limit for the use of funds under the Malaysian Road Records Information System or MARRIS has been increased to 20 per cent or 50 million ringgit, whichever is lower to finance road maintenance work that is beyond the usual scope of MARRIS.

Measure 6: Youth and Sports Development

Datuk Speaker Sir,

108. Youth are the catalyst for the future of the country. To provide employment exposure to youths, the Government will provide an incentive of 1,000 ringgit per month for up to 3 months to private employers for each new graduate who participates in the apprenticeship program. In addition, employers can also claim a grant of up to 4,000 ringgit for training programs for the apprentices. The program is expected to benefit up to 50 thousand new graduates with an allocation of 250 million ringgit.

109. Youths play an important role as pioneers and consumers in adopting the latest technology. Towards embracing a cashless society, the Government will credit a one-off 50 ringgit into e-wallet accounts for those aged 18 to 20 years via the eBelia Programme. With an allocation of 75 million ringgit, this initiative is expected to benefit more than 1.5 million youths.

110. The Government will allocate 19 million ringgit to implement the Malaysia National Healthy Agenda aimed at strengthening healthy lifestyle to reduce the risk of diabetes, hypertension and obesity. A total of 28 million ringgit is also provided to implement the MyFit Programme, National Sports Day and Inspire Programme for the disabled community.

111. The Government will also provide 103 million ringgit to build, upgrade and maintain sports facilities nationwide. For the development of high-performance sports, the Government will provide 55 million ringgit for the development of hockey, rugby, badminton, cycling, development of women athletes, including 15 million ringgit allocation to e-Sports development.

112. To assist sports industry operators, 20 million ringgit is provided as a soft loan through the TEKUN Sports scheme to ensure continuity of sports facility operators.

113. In addition, the tax relief limit for lifestyle is increased from 2,500 ringgit to 3,000 ringgit where the additional 500 ringgit is specifically provided for expenditure related to sports including participating fee for sports competitions. The scope of relief is also expanded to include subscription of electronic newspapers.

Strategy 5: Ensuring the Well Being of the Rakyat

Datuk Speaker Sir,

114. Strategy five is to guarantee the well-being of the rakyat. The Malaysian Well-Being Index which measures the development of the rakyat’s well-being from social component has increased at a slower pace compared to the economic dimension. Under the social dimension, there is still room for improvement especially under the health, family and environmental components. The Government will ensure a more balanced development and a more prosperous life for the people through the improvement of various social amenities.

Measure 1: Digital Connectivity

115. The government recognizes the need for telecommunication networks as a third utility. In the new norm, virtual services are becoming more common. The development of infrastructure and upgrading of basic telecommunications networks is necessary to meet the needs of a digital lifestyle.

116. Therefore, the Government will allocate 500 million ringgit to implement the National Digital Network initiative, JENDELA to ensure the connectivity of 430 schools throughout Malaysia covering all states. At the same time, Malaysian Communications and Multimedia Commission (MCMC) will allocate 7.4 billion ringgit for year 2021 and 2022 to build and upgrade broadband services.

117. In this new norm, online education has become a way of life. In this respect I would like to announce that the GLCs and GLICs will contribute 150 million ringgit into the Tabung CERDIK to provide laptops to 150 thousand students in 500 schools as a pilot project. This project will be supervised by Yayasan Hasanah.

Measure 2: Access to Quality Education

Datuk Speaker Sir,

118. Education is the most important investment in ensuring a better quality of life for future generations. Therefore, the Ministry of Education continues to receive the largest allocation of 50.4 billion ringgit or 15.6 percent of the total Government expenditure.

119. To ensure that students from low-income families get daily nutritional content for healthy physical and mental growth, the Government will improve the Supplementary Meal Plan by providing milk supply daily compared to twice a week currently. An allocation of 420 million ringgit will be provided and part of the procurement will be reserved for local milk producers.

120. To ensure a conducive learning environment, a total of 800 million ringgit will be provided for the maintenance and repair of Government Schools and Government Aided Schools. This allocation also includes the work of upgrading and building open halls or covered structures for students to assemble in a comfortable and safe place in Government Schools.

121. In addition, an additional cost of 725 million ringgit will be allocated to upgrade buildings and infrastructure in 50 dilapidated schools. For schools in rural Sabah and Sarawak, the Government will implement 184 construction projects and install tube well water supply with a total project cost of 120 million ringgit.

122. In addition, special needs children in schools will also be given attention by the Government. Therefore, to better provide for the special needs stream, 45 million ringgit will be provided for this purpose.

123. For higher education, a total of 14.4 billion ringgit will be allocated to the Ministry of Higher Education. This includes, 50 million ringgit for infrastructure and equipment replacement in public universities.

124. To ensure internet connectivity in institutions of higher learning, the Government has allocated 50 million ringgit to upgrade the Malaysian Research & Education Network or MYREN access line to 500Mbps to 10Gbps.

125. Furthermore, to ensure that PTPTN loan holders from institutions of higher learning are able to continue their learning online, Government, working with BSN will provide 100 million ringgit to finance the BSN MyRinggit-i COMSIS Scheme which is a laptop loan scheme.

126. To further encourage parents to save for financing tertiary education of their children, tax relief up to 8,000 ringgit on net annual savings in Skim Simpanan Pendidikan Nasional (SSPN) will be extended until the year of assessment 2022.

Datuk Speaker Sir,

127. The Government will continue to strengthen Technical and Vocational Education and Training or TVET. For 2021, 6 bilion ringgit has been allocated for TVET.

128. To provide loans to 24 thousand trainees to pursue TVET programs in public and private skills training institutions, 300 million ringgit is provided through the Skills Development Fund Corporation or PTPK, which is an increase of 100 million ringgit comprated to year 202.

129. To encourage more industry involvement in implementing TVET-based programs, the Government will hereby increase the National Dual Training System Plus allowance from 625 to 1,000 ringgit. This initiative involves a total allocation of 60 million ringgit and benefits 10 thousand trainees.

130. A total of 29 million ringgit will be allocated to implement TVET programmes under the Ministry of Higher Education including Islamic education and lifelong learning initiatives to 15 thousand students in tahfiz institutions and pondok schools.

Measure 3: Increasing Home Ownership

Datuk Speaker Sir,

131. To further promote home ownership, especially for first-time buyers, the Government will implement the following initiatives:

First: Full stamp duty exemption on instruments of transfer and loan agreement for first time home buyers is extended until 31 December 2025. The limit of duty stamp for first residential home is also increased up to 500 thousand ringgit. This exemption is effective for sale and purchase agreement executed from 1January 2021 to 31 December 2025; and
Second: Stamp duty exemption on loan agreements and instruments of transfer given to rescuing contractors and the original house purchasers is extended for another 5 years. This exemption is effective for loan agreements and instruments of transfer executed from 1 January 2021 to 31 December 2025 for abandoned housing projects certified by Ministry of Housing and Local Government (KPKT).

132. At the same time, the Government has a role to play in providing comfortable and quality housing, especially for the low-income group. To that end, a total of 1.2 billion ringgit is provided for the following purposes:

First: 500 million ringgit to build 14 thousand low cost housing units under the Program Perumahan Rakyat;
Second: 315 million for the construction of 3,000 units of Rumah Mesra Rakyat by Syarikat Perumahan Nasional Berhad;
Third: 125 million ringgit for the maintenance of low cost and medium-low stratified housing as well as assistance to repair dilapidated houses and those damaged by natural disasters; and
Fourth: 310 million for the Malaysia Civil Servants Housing Programme (PPAM).

133. In addition, the Government will collaborate with selected financial institutions to provide a Rent-to-Own Scheme. This program will be implemented until 2022 involving 5,000 PR1MA houses with a total value of more than 1 billion ringgit and reserved for first-time home buyers.

Measure 4: Public Transport

Datuk Speaker Sir,

134. The My30 unlimited travel pass initiative will be continued and expanded to Kuantan and Penang with a total allocation of 300 million ringgit. This initiative enables users to enjoy bus and rail services operated by Kumpulan Prasarana for as low as 30 ringgit monthly.

135. In addition, an unlimited monthly travel pass for as low as 5 ringgit will be introduced for children in year 1 to form 6 to commute to school, and for the disabled. This pass can utilised on the Klang Valley Komuter lines, northern sector komuter, Kuala Lipis and Tumpat inter-city train, and the Beaufort-Tenom line in Sabah. If on average, the fare now is at 5 ringgit per day, starting next year, the fare will only be 5 ringgit per month.

136. Currently, the Stage Bus Service Transformation Programme (SBST) is being implemented in Kangar, Seremban, Ipoh and Kuala Terengganu. This programme will be expanded to Johor Bahru, Kuching, Kota Kinabalu and Kuantan with an allocation of 150 million ringgit.

137. The Government is committed to reducing the burden of bus operators. The Government is committed to reducing the burden of bus operators. Sales tax exemption for the purchase of locally assembled bus including air conditioner will be extended for a period of two years effective from 1 January 2021 until 31 December 2022.

Measure 5: Defending the Nation’s Sovereignty and Security

Datuk Speaker Sir,

138. The government is very concerned about issues relating to national sovereignty. The government has carried out Operasi Benteng or Ops Benteng to ensure that the country's border areas are always protected and not breached. This integrated operation is coordinated under the National Security Council (MKN) involving various agencies such as armed forces, police, APMM, Immigration Department and several others.

139. Next year, the Ministry of Defense and the Ministry of Home Affairs will be allocated 16 billion ringgit and 17 billion ringgit respectively.

140. To ensure the readiness of the Malaysian Armed Forces, the Government will increase the allocation for maintenance to 2.3 billion ringgit for the year 2021 compared to 2 billion ringgit previously.

141. Cybercrime including digital transaction fraud is one of the new forms of threats to the country. In this regard, the Government has allocated 27 million ringgit to CyberSecurity Malaysia to increase the country's cyber security.

142. The government is focused on ensuring that the welfare and well-being of military personnel is not neglected. Apart from continuing to maintain the facilities of the existing Rumah Keluarga Angkatan Tentera (RKAT), the Government has also approved the construction of 1000 new units with a total cost of 500 million ringgit.

143. The Government appreciates the role of the Malaysian Volunteer Department, RELA which also helps in breaking the COVID-19 infection chain. A total of 153 million ringgit will be allocated for including upgrading facilities at the training centre to strengthen the role of RELA.

SECOND GOAL: BUSINESS CONTINUITY

Datuk Speaker Sir,

144. The business environment has now evolved. Hence under the second objective which is business continuity the focus of the Government will be to accelerate investments, strengthen strategic sectors and improve access to financing.

Strategy 1: Driving Investments

145. The first strategy is to drive investments. To help local companies face future challenges, the Government will act as a facilitator in providing access to investment funds including improving the business environment.

146. For each challenge faced, there will emerge opportunities. In the context of COVID-19, while many businesses are affected, there are sectors which continue to grow strongly such as medical devices, e-commerce and logistics in addition to education technology. This scenario coupled with the turmoil of global trade provides an opportunity for Malaysia to attract new companies, new investments and new economic opportunities. This will be the focus under the second objective.

Measure 1: Investment in Key Sectors

147. To facilitate this, 1 billion ringgit will be provided as a special incentive package for high value-added technology. Among others, this fund aims to support R&D investment in aerospace as well as electronic clusters such as in Batu Kawan, Penang and Kulim, Kedah industrial parks.

148. In addition, a High Technology Fund worth 500 million ringgit will be provided by Bank Negara Malaysia (BNM) to support high technology and innovative companies. The fund will enable Malaysia to remain competitive in the global supply chain and maint the suppy chain ecosystem and protect high skilled jobs.

149. The Government is committed to making Malaysia as a destination for high-value service activities. In relation to this, the following initiatives will be implemented:

First: Relaxation of tax incentive conditions for Principal Hub and the incentive will be extended until 31 December 2022;
Second: New tax incentive for the establishment of Global Trading Centre at a concessionary rate of 10 percent for a period of 5 years and renewable for a period of another 5 years;;concessionaryReducing
Third: Limit on the sales value for value-added and additional activities carried out in the Free Industrial Zone and Licensed Manufacturing Warehouse be increased from 10 percent to 40 percent from the total annual sales value; and
Fourth: Special income tax treatment at a flat rate of 15 percent for a period of 5 years to non-resident individuals holding key positions for strategic new investment by companies relocating their operations to Malaysia under the Pelan Jana Semula Ekonomi Negara (PENJANA) incentive package.

150. Through PENJANA, the Government has offered special tax rates to selected manufacturing companies which relocated their businesses to Malaysia and bring in new investments. I am pleased to announce that the application for the incentive will be extended for another 1 year until 31 December 2022 and the scope of tax incentives will also be extended to companies in the selected services sector which have significant multiplier effect by providing an income tax rate of 0 to 10 percent for a period of 10 years.

151. A comprehensive study of the existing tax incentive structure is underway to provide a competitive, transparent and more attractive tax incentive framework. To provide space for the study to be completed, the existing tax incentives, due to end this year, will be extended until 2022. The extension includes tax incentives for MRO activities for aerospace, building and repair of ships, Bionexus status and economic corridor developments.

Datuk Speaker Sir,

152. A National Development Scheme (NDS) valued at 1.4 billion ringgit by Bank Pembangunan Malaysia will be introduced to support the implementation and development of domestic supply chain and increase the production of local products such as medical devices.

153. In addition, the Maritime Development and Logistics Scheme; Sustainable Development Financing Scheme; Tourism Infrastructure Scheme; and Public Transport Fund will be extended until 31 December 2023 with a fund size of 3.7 billion ringgit.

154. A total of 500 million ringgit from these schemes will be designated for Bumiputera entrepreneurs to increase their involvement in the key sectors.

155. To further assist affected SMEs, the Targeted Assistance and Rehabilitation facility worth 2 billion ringgit under BNM will be introduced through loans from banking institutions.

Measure 2: Improving the Business Environment

Datuk Speaker Sir,

156. During my Budget engagement sessions to industrial areas throughout Malaysia, the main issue raised is the need to improve the infrastructure of industrial areas. To enhance the competitiveness of the industry, I am pleased to announce the following initiatives:

First: 100 million ringgit for the maintenance of ithe infrastructure of industrial parks;
Second: 42 million ringgit under JENDELA to improve internet connectivity in 25 industrial parks;
Third: Development of a water treatment plant in Kubang Pasu district to support the investment needs of the Kota Perdana Special Boundary Economic Zone project in Bukit Kayu Hitam, Kedah and residents in the area; and
Fourth : Allocation of 45 million ringgit to meet the water supply needs for the petrochemical sector concentrated in the Gebeng Industrial Zone.

157. The Government will