Prime Minister Najib Abdul Razak, in unveiling the 2010 budget today, has for the first time introduced a retirement scheme for the self-employed and those without fixed income.

Called the 1Malaysia retirement scheme, Najib said it would cater for taxi drivers, hawkers, farmers and fishermen who retire without pensions or contributing to the Employees Provident Fund.

"For this group, the government will establish the 1Malaysia retirement scheme to be administered by the EPF. Through this scheme, they will be able to contribute voluntarily according to their affordability."

NONE "For every RM100 contribution, the government will contribute five percent subject to a maximum of RM60 per annum. This is in addition to the existing dividends paid by EPF," he said.

Najib said the government's contribution was however only for a period of five years and contributors may withdraw their savings upon attaining the age of 55.

Giving an example, the prime minister said a 35 year-old fisherman making a RM100 monthly contribution, would have an accumulated savings of RM40,000 at the age of 55.

Najib also proposed the voluntary raising of the EPF contribution of workers following the expected economic recovery next year from eight percent to 11 percent.

Reduction in income tax

Najib also announced additional goodies for tax payers where the maximum individual income tax rate is now reduced from 27 percent to 26 percent, while personal relief will be increased from RM8,000 to RM9,000.

income tax form 310306 "This means that each individual tax payer will enjoy an increase of RM1,000 in disposable income. This relief will be effective for the year of assessment 2010."

As part of the income tax measures, Najib also announced a raise in personal tax relief for personal EPF contributions and life insurance premiums by an additional RM1,000 from the existing RM6,000.

To encourage and intensify the development in Iskandar Malaysia, Najib has proposed that income tax on employment income for local and foreign workers to be fixed at 15 percent, compared to a maximum of 26 percent for the rest of the country.

He said those eligible for this would be those engaged in green technology, biotechnology, education services, healthcare, the creative industry, financial advisory, and consultancy services including logistic and tourism.

"This incentive will be available to those who apply for and commence work in Iskandar Malaysia before the end of 2015 and they will enjoy this incentive indefinitely," he said.

Eradicating urban poverty, expanding public health

The government has also proposed to allocate RM48 million to implement urban poverty eradication programmes, including welfare assistance and house rental problems in view of the expanding urbanisation with 63 percent of the population staying in urban areas.

Najib also announced that the government has allocated more than 44,000 low cost houses to be sold at RM21,500 and RM35,000 a unit by Kuala Lumpur City Hall and the National Housing Department.

He also announced the National Housing Department will also provide 74,000 low cost houses to be rented in 2010.

He also said the government has allocated RM14.8 billion to manage, build and upgrade hospitals and clinics that includes the construction and upgrading hospitals at Kluang, Bera, Shah Alam, Alor Gajah and Tampoi.

Helping the disabled

The government is not abandoning the plight of the disabled as it continues to assist them and also senior citizens, single mothers and children in need of welfare assistance.

damai disabled people pc 230309 05 Najib said the proposals include allocating a sum of RM224 million for the disabled in the Rehabilitation in the Community Programme, as well as an additional RM174 million for senior citizens including the upgrading and construction of two Rumah Seri Kenangan.

In addition, Najib also proposed that the government increase the allowance rate from RM50 to RM150 a month for every disabled child enrolled in NGOs organised special schools.

This will benefit almost 4,000 disabled children.

Sabah, Sarawak get huge allocation

The government has also agreed to allocate RM2.3 billion to construct and upgrade infrastructure in rural areas. The bulk or RM857 million will be for Sarawak and Sabah.

Furthermore, another allocation of RM530 million has been set aside to provide water supply to 16,000 homes and RM825 million for electricity supply for 30,000 houses.

In addition, a provision of RM8 million has been set aside for social amenity projects such as rural clinics, community halls and public recreational areas.

The prime minister also announced that the government proposed to allocate RM1 billion to improve the services of the police and reduce crime.

The measures include providing mobile petrol stations in 50 hot spots in high crime prone areas.

Najib, a former defence minister, also announced an allocation of RM1.9 billion for the armed forces in addition to another RM622 million to the Malaysian Maritime Enforcement Agency.