The Federation of Malaysian Manufacturers (FMM) welcomes the directions of the 2010 national budget and the various initiatives identified to ensure the continued growth of the economy.
We congratulate the government on the success of its two stimulus packages that have stimulated growth and welcome the projected growth of 2-3% in 2010.
2. We note, however, that private investment remains low and no specific incentives have been identified to further encourage growth in private investment.
FMM supports the government’s decision to reduce its involvement in economic activities, particularly in areas where it competes with the private sector so as not to crowd out the private sector in economic activities consistent with the government’s role as a facilitator.
In privatising government agencies and assets, FMM would like to stress that the process is made transparent so that the government gets the best value for assets disposed and re-developed.
3. We share the government’s ambition to move from a middle-income to a high-income economy. However, there is need for clearer direction and strategies to chart the path and set the milestones towards attaining this objective.
The move by the government to give PR status to knowledge-workers and spouses of such Malaysians is a move in the right direction. We would have liked to see bolder and more aggressive measures to increase the number of knowledge-workers.
The personal tax rate of 15% for knowledge-workers in the Iskandar Development Region could have been extended to a larger number of workers on a nationwide basis.
4. In addition to the availability of knowledge-workers, FMM sees an urgent need for new and bold strategies to restructure and reform the education system to provide quality manpower that would enhance productivity, efficiency and innovation thereby contributing to meeting the needs of a high-income economy.
Measures to grant greater autonomy to school management and to reward principals and head teachers to improve education should also include efforts to improve the curriculum and the standard of English in schools to meet the demand of a competitive global economy.
5. The initiatives to strengthen SMEs are appropriate since SMEs are the backbone in both the manufacturing and services sectors. Similarly, the measures to promote green technology, particularly the fund of RM1.5 billion and the tax incentive to promote the green building index would ensure that development is sustainable in the long term.
Government development projects should also use green building materials, which would also contribute to the growth of the construction building materials sector.
6. Although we welcome the reduction in the top bracket of personal and cooperative taxes, the FMM is disappointed that the tax brackets have not been broadened. FMM welcomes the decision not to implement the Goods and Services Tax (GST).
7. Given the importance of eliminating corruption, the announcement to establish 14 special Corruption Sessions Courts and four special Corruption Appeal High Courts is commendable. We would also like to congratulate the government on the recent establishment of commercial courts.
8. Given the challenging global environment, FMM would have appreciated new measures and greater allocation in the promotion of exports as well as assistance to develop and expand new markets.