LIVE| BUDGET 2019 | Finance Minister Lim Guan Eng is tabling the Pakatan Harapan government's inaugural budget in the Dewan Rakyat.
This is the first budget to be tabled by a new government since the nation's independence in 1957 following BN's defeat in the May 9 general election.
Previously, Lim said this will be a budget of sacrifice, but not one of austerity.
At a glance:
Total budget for 2019: RM314.55 billion (excludes RM2 billion contingency fund), up 10.25%.
Operational expenditure: RM259.85 billion, up 10.93%.
Development expenditure: RM54.7 billion, up 18.91%.
Projected deficit for 2019: 3.4%
Revised deficit for 2018: 3.7%, up from 2.8% projected by the BN administration for Budget 2018.
Malaysiakini reports on the Budget speech live:
Lim: Malaysia is now clean again
6.20pm: Lim ends his 130-minute speech by highlighting the US Department of Justice's charges against fugitive financier Jho Low and former Goldman Sachs executives Tim Leissner and Roger Ng.
"For the crooks who have stolen the people's money, return the money and be prepared to face justice.
"Those who continue to support these crooks, apologise and resign from public office," he adds to cheers from government lawmakers.
He says Malaysia is now "clean" again and urges those who have lost their way to return to the right path.
After the speaker ends the session, BN lawmakers stand up and wave their Economic Initiative document at Harapan lawmakers.
Government lawmakers retort by saying their document is "too small" and they should "print better placards".
Someone from the opposition bench then shouts "Nobita, Nobita" in reference to the Japanese cartoon character of Doraemon fame, whom some critics have likened Lim to.
BN MP: Budget is 'copy and paste'
6.18pm: Noraini Ahmad (BN-Parit Sulong) heckles Lim, saying Harapan's budget is mostly a rebranding exercise, "with a lot of copy-pasting."
Dewan Rakyat Speaker Mohamad Ariff Md Yusoff chides the House, saying "a lot of tigers are roaring today."
Tiger of Asia - MPs respond with growls
6.16pm: Lim promises that as long as the Harapan administration is clean, prioritises the people and implements reforms, Malaysia's fiscal position will be restored in three years.
"To borrow from what the prime minister said: 'Malaysia is like an Asian Tiger that has been sleeping and now has been awakened'," he says.
MPs respond with an enthusiastic bout of growling.
'Samurai bonds' to help Putrajaya slash debt
6.15pm: Japan Bank of International Cooperation is expected to guarantee JPY200 billion (approximately RM7.4 billion) in a special security known as the "Samurai bond" that is scheduled to be issued by Putrajaya before March 2019.
The coupon rate is set at 0.65%.
Lim credits Prime Minister Dr Mahathir Mohamad for convincing Japan to undertake this arrangement.
"We wish to thank the government of Japan for offering to guarantee the issuance of the Samurai bond," he says.
Handouts for uniformed units
6.11pm: Putrajaya will pay a special RM500 cash handout to police, military, fire and rescue department as well as customs department staff who are Grade 54 and below.
As for all government pensioners, a RM250 payment will be made.
"Unlike the previous administration which normally makes such payments the following year, the Harapan administration will be making the payments by the end of 2018," says Lim.
MACC gets big bump in funds
6.10pm: MACC's funding will be increased by 18.5% to RM242.1 million because the graftbusting agency need to recruit an additional 100 people.
"MACC needs enough human resources to fight graft and money laundering in the public and private sector, as well as to recover assets," says Lim.
6.03pm: Based on a recent Khazanah Research Institute report, a 30% increase of women’s participation in the workforce will increase the Gross National Income by up to between 7% and 12%.
The government therefore announces an RM10 million allocation to build 50 new childcare centres (Taska) at government offices.
It will also continue to provide incentives for the private sector to provide equal employment opportunities for women.
Allocations for equitable development
5.55pm: The government has allocated the following for equitable development:
For Felda settlements, the government has allocated:
Lim says the government has also allocated RM5 billion for development in Sabah, and RM4.3 billion to develop Sarawak.
Pangkor Island goes 'duty-free'
5.51pm: Lim says Pangkor Island will be made a duty-free island to realise its real potential as one of the country's main tourism destinations.
However, he adds, it will be bound by certain conditions.
Ensuring healthy competition
5.54pm: The Finance Ministry will establish a special team to review statutory bodies owned by Finance Minister Incorporated to ensure that government-owned companies do not compete with the private sector in non-strategic sectors.
Lim says this is to avoid crowding out private companies and creating healthy competition.
"The government will focus on investing in strategic sectors which the market and private sector are not interested in or are unable to fulfil the needs of the people," he adds.
'Buy Malaysian Products' campaign returns
5.45pm: The government will launch a "Buy Malaysian Products" campaign.
Lim says RM20 million has been allocated for the programme, which was previously carried out during Prime Minister Dr Mahahtir Mohamad's first stint in office.
The programme will give local manufacturers and service providers access to hypermarkets, shopping warehouses, and trade expos.
PTPTN initiatives announced
5.40pm: To ensure sustainability of the National Higher Education Fund (PTPTN), the government announces several initiatives, including payment through deductions of between 2% and 15% from the borrower's salary, based on their monthly income rate. This system is only applicable to borrowers earning more than RM1,000 a month.
Lim says a tax break will be given to companies that assist its staffs to settle their loans by the year ending 2019.
Individual income tax breaks for the National Education Saving Scheme has been increased from RM6,000 to RM8,000.
At the same time, the government also announces that all remaining loans for borrowers aged above 60 and earning less than RM4,000 a month have been waived, benefiting 350 borrowers with a cost of RM4.2 million.
Broadband connectivity outside urban centres
5:35pm: The government wishes to see 30Mbps broadband connectivity outside urban centres within five years under the National Fiberisation and Connectivity Plan.
Lim says this is part of Putrajaya's commitment towards the digitalisation of Malaysia's economy.
Largest allocation goes to Education Ministry
5.30pm: The Education Ministry will receive the largest allocation next year with RM60.2 billion or 19.1% of the total amount.
Lim says among the initiatives that will be executed using the budget are:
- RM2.9 billion education assistance for the poor through food supply, textbooks and cash aid
- RM652million to upgrade and repair all schools, as follows:
5.25pm: Lim announces that the government has allocated RM10 million to encourage and develop e-sports.
RM3.8b scholarships allocated
5.20pm: RM3.8 billion has been allocated for government scholarships, out of which RM2 billion are for bumiputera scholars sponsored by Mara.
RM400 million has also been allocated for university research.
Additionally, RM210 million has been allocated to empower bumiputeras through education and human capital development programmes.
Freezes intra-city toll rate hikes
5.20pm: The government announces a freeze on all intra-city toll rate hikes, involving an allocation of RM700 million.
Aside from that, the government will also abolish tolls for motorcycles on the two bridges linking Penang island to the mainland, as well as the Johor Second Link, with an estimated annual allocation of RM20 million beginning Jan 1, 2019.
Peer-to-Peer Lending Scheme
5.10pm: Putrajaya will allow the private sector to engage in a new "peer-to-peer lending scheme" that will allow first-time home buyers to adopt the "property crowdfunding" model.
Lim says this will likely be a world first and will be regulated by the Securities Commission (SC).
As an example, Lim says a buyer can purchase a home worth RM250,000 by paying only RM50,000 while the balance is financed by investors through the peer-to-peer scheme.
He expects the scheme to be launched in Q1 2019 after getting the SC's clearance.
5.15pm: Public transportation users can buy RM100 monthly passes for unlimited trips on RapidKL rail or bus services starting from January 2019.
There is also a RM50 monthly pass for those who only use RapidKL busses.
This scheme will be expanded to other bus companies in stages.
Smoke-free nation by 2025
5.15pm: Lim says the Health Ministry targets for Malaysia to become a smoke-free nation by 2045.
He adds that the ministry will impose non-smoking zones on all restaurants and eateries, which will be gazetted starting Jan 1, 2019.
RM1 billion fund to facilitate home ownership for B40, M40
5.10pm: The government plans to reduce transportation cost and increase the ability to own homes for B40 and M40 households.
RM1.5 billion has been allocated to further the government's affordable home programmes.
Lim says Bank Negara will set up a RM1 billion fund to facilitate those earning below RM2,300 to own homes below RM150,000.
The loans can be obtained at Ambank, CIMB, Maybank, RHB, and BSJ.
First time house buyers, buying houses valued up to RM500,000, will be exempted from stamp duties until the first RM300,000 for the transfer of deeds and loan agreements for two years until December 2020.
The government has allocated RM25 million to Cagamas Berhad to provide mortgages for first time home buyers earning below RM5,000.
Unrecorded leave to perform religious obligations
4.57pm: The government has approved a one-off unrecorded leave of seven days for Muslim civil servants to perform Umrah during their term of service.
Lim says the same is also accorded to non-Muslim civil servants to perform their respective religious obligations.
Excise duty for sugary drinks
5.05pm: The government will be imposing an excise duty or sugary drinks tax of 40 sen per litre for sugary drinks.
This excise duty applies to:
Health protection fund for B40
5.10pm: The government through cooperation with a private insurance provider will introduce a National Health Protection Fund for families in the B40 category.
Effective Jan 1, 2019, the scheme will offer free protection for four main types of critical diseases, at a rate of up to RM8,000 for treatment and a maximum of 14 days daily income replacement during treatment in hospital, at a rate of RM50 a day or equivalent to RM700 a year.
Minimum wage to be increased to RM1,100
4.50pm: To encourage the hiring of those above the age of 60 who want to work, the government proposes that their mandatory EPF contributions be reduced from 6% to 4%.
Lim says this group will also not have their income deducted for EPF contributions to increase the money available to them.
There will also be tax incentives for companies that hire senior citizens, with a salary limit of RM4,000 a month.
Meanwhile, the minimum wage will be increased RM1,100 starting Jan 1, 2019.
RM500 for pensioners
4.55pm: The government will give a one-off RM500 payment to eligible pensioners.
He says the government is concerned over the plight of retired civil servants, especially those whose pension is below RM1,000 a month.
4.56pm: The government has allocated RM10 million annually to extend medical benefits to parents of contractual civil servants.
Lim says contractual civil servants whose children have infectious diseases will be eligible for quarantine leave.
Fuel subsidy for single car, motorcycle owners
4.53pm: As part of Harapan's targeted subsidy initiative, Lim says the government will subsidise fuel for single car owners with an engine capacity below 1,500cc or motorcycle with an engine capacity below 125cc.
Through the mechanism, the government will provide a subsidy of 30 sen per litre for RON95, limited to 100 litres per month for a car and 40 litres for a motorcycle.
This new mechanism with an allocation of RM2 billion is expected to start in the second quarter of 2019, and will benefit four million car owners and 2.6 million motorcycle owners.
The government will once again float the price of RON95 based on the Automatic Price Mechanism.
4.52pm: Lim says the government will top up RM40 per month to the EPF accounts of housewives, whose husbands make a minimum deposit of RM5 per month. RM45 million has been allocated for this.
Financial aid for low-income group
4.50pm: Starting Jan 1, 2019, households earning below RM2,000 will get RM1,000 in Bantuan Sara Hidup (BSH), the Harapan government's version of BR1M.
Households earning between RM2,001 and RM3,000 will get RM700 in aid, while those earning between RM3,001 and RM4,000 will get RM500 in aid.
The government will also top-up RM120 in BSH for each child under 18, limited to four children, not including disabled children who have no age limit.
Lim gave an example, that a household earning below RM2,000, who have four kids, will receive RM1,480 in BSH, which is more than the RM1,200 given under BR1M.
The government has allocated RM5 billion for BSH.
Casino license fees increases, special draws decreases
4.50pm: Government announces that casino license fee has been increased from RM120 million to RM150 million. Casino duties also increased by up to 35% of the gross income.
For dealer machine licenses, the annual license fee is increased from RM10,00 to RM50,000. The duty fee, meanwhile, is increased from 20% to 30% of the gross income.
On top of that, the number of special draws has been reduced by 50%.
Special voluntary disclosure programme
4.47pm: The government will commence a "special voluntary disclosure" programme for parties with previously undeclared incomes.
For declarations made from tomorrow until March 31, Lim says taxpayers will only have to pay a 10% penalty from the total undeclared income.
Declarations made from April 1 to June 30 will incur a 15% penalty, while those made after the programme ends on June 30 will be slapped with a penalty of between 80% to 300% as provided for under the law.
Real Property Gains Tax
4.45pm: Real Property Gains Tax (RPGT) will be raised for locals from 0% to 5%. However, exceptions will be made for low-cost homes below RM200,000.
Lim says RPGT for companies and foreigners, who are not permanent residents, will be raised from 5% to 10%.
Stamp duty for properties exceeding RM1 million will be raised from 3% to 4%.
Overseas travel tax
4.43pm: The government will propose a levy on all overseas flights going out from Malaysia, to be implemented from Jun 1, 2019. The aim is to encourage domestic travel.
There will be two categories - RM20 for passengers flying to Asean countries, and RM40 for passengers flying to other countries.
Lim says this rate is consistent or not more than the rate imposed by other countries, including Thailand (US$20), Hong Kong (US$15) and Japan (US$10).
Opposition chants 'bungalow'
4.42pm: Lim says the Inland Revenue Board will investigate all excessive wealth through ownership of luxury items such as jewellery, watches, handbags, expensive cars and properties.
BN lawmakers heckle the finance minister, asking him if bungalows will be investigated as well.
Customs Department to scrutinise online services
4.40pm: Starting Jan 1, 2019, the government will tax imported services to ensure that local service providers such as architects, graphic designers, software developers can compete more competitively.
Lim says online services imported by users will also be required to register with the Customs Department. This includes software, music, videos, or any digital advertising.
4.32pm: Lim says the government's strategies to increase revenue will involve liquidation of its interest in non-strategic companies.
Another strategy is selling land through open tender under the public-private partnership scheme.
SST exemptions for some services
4.35pm: Effective Jan 1, 2019, the government will grant SST exemptions to specific services provided by registered businesses to other registered businesses.
The finance minister says the government will also introduce a tax credit system for small manufacturers who purchase source materials from importers and not registered factories.
Putrajaya will no longer pay IPIC and Aabar
4.30pm: The government and 1MDB will not pay the remaining US$4.32 billion debt to IPIC and Aabar but will instead demand the US$1.46 billion that had been paid to the company.
Lim says the government will also work with foreign governments to retrieve the money which belongs to 1MDB, which have been seized.
Harapan MPs thump their tables in support.
4.25pm: Lim says the government will create a Debt Management Office that will review and manage the government's debts.
It will also monitor debts issued by the government, statutory bodies, and special purpose vehicles.
Deficit will drop in the future
4.21pm: For the next three years, Harapan aims to lower the fiscal deficit to 3.4% in 2019, 3% in 2020, and 2.8% by 2021.
4.20pm: Lim says the government's budget deficit does not reflect the true deficit amount, as many expenses were off the balance sheet.
He says despite the government's best efforts, it is not realistic to achieve a deficit of 2.8% for 2018.
As such, he adds that the fiscal deficit for 2018 is expected to hit 3.7%.
He blames the previous government for not making provisions to pay off RM1 billion in 1MDB debts; RM1.3 billion for the takeover of the Eastern Dispersal Link (EDL), RM1 billion for Prasrana; RM1.4 billion for rail projects under the Transport Ministry; and RM3.9 billion for GST refunds.
Fiscal Responsibility Act to be tabled
4.16pm: The government will table a Fiscal Responsibility Act by 2021 to prevent uncontrolled spending which creates mega debts.
Lim says the government will also table a Government Procurement Act next year to ensure transparency and open competition in procurement, while also introducing punitive punishments on abuse of power, negligence, and corruption.
'Investors believe in Harapan'
4.15pm: The finance minister says the Malaysian ringgit is performing better than the Indian rupee, Indonesian rupiah, Filipino peso, China renminbi and Singaporean dollar.
Lim states that KLCI is doing better than the MSCI Emerging Market Index, Singapore, Hong Kong, South Korea, Philippines, Indonesia and Thailand.
"This shows that domestic and foreign investors are confident of the new Harapan government," he adds.
4.08pm: BN lawmakers jeer when Lim starts his speech by thanking Malaysians for saving the nation from a kleptocratic government.
Referring to the previous BN-led administration, Lim says the rakyat showed courage in replacing the old government with a new, clean and democratic administration.
When opposition MPs respond with boos, Dewan Rakyat Speaker Mohamad Ariff Md Yusof tells them to calm down.
4.05pm: According to the economic outlook report, the Harapan government is set to boost spending with a total budget of RM314.55 billion, excluding an RM2 billion contingency fund.
This is higher than the RM282.3 billion tabled by the previous BN government in 2018.
However, the expansionary budget will also see a spike in the country's deficit to 3.7%.
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