Quick Refresher on Budget 2021



On Friday 6th November 2020, Finance Minister Tengku Zafrul Aziz gave out the planned budget for the year 2021, which is a first for the Perikatan National government ever since they took up power in March this year.

According to sources, a total of RM 322.5 billion has been allocated for the year 2021 with RM7.8 billion more than what was worth from the 2020 budget.


RM236.5 billion is allocated for operational expenditures, RM 69 billion for development and RM 17 for Covid-19 funds.


Here are the list of all the allocated budgets for the year 2021 :



Operational


Emoluments – RM 84.5 billion

Debt Repayment – RM 39 billion

Services and Supply – RM 32.8 billion

Pensions – RM 27.7 billion

State Government – RM 7.7 billion

Subsidies – RM 18.7 billion

Others – RM 25.8 billion


Development


Economy – RM 39 billion

Social – RM 18.3 billion

Security – RM 7.7 billion

General Administration – RM 3.8 billion

Covid-19 fund – RM 17 billion


And for the top three budgets for year 2021 are:

· Welfare and citizens

· Business continuity

· Economic resilience


Civil Service

  1. Increase allowance for 1900 volunteer firefighters from RM 6 to RM 8 an hour

  2. One of payment for 40000 recipients of the Pingat Jasa Pahlawan Negara with RM 500 each

  3. RM 600 for civil servants grade 56 and below

  4. Retired civil servants and veterans without pension will be given RM 300 special aid by the government


Environment


  1. RM 50 million for river cleaning

  2. RM 40 million to increase enforcement and monitoring activities

  3. RM 10 million for waste management projects in Terengganu and Johor

  4. RM 400 million to preserve natural resource through TAHAP initiative

  5. RM 20 million for the hiring of 500 former soldiers and police, also Orang Asli to patrol forests

  6. Government to build an urban transformation center in Lembah Pantai with the help of private sector


Job Creation and Social Issues


  1. RM 100 million for NGOs that is involved with job creation, addressing social issues and environmental protection

  2. RM 2 billion to continue Green Technology Financing Scheme 3.0

  3. Appointment of 100 new MACC officers

  4. Sabah and Sarawak

  5. RM 5.1 billion and RM 4.5 billion to improve infrastructure, health and education facilities in Sabah and Sarawak respectively.

  6. Economic Corridors

  7. RM 780 million for development projects in economic corridors for Johor, Kelantan, Kedah, Sarawak and Sabah

  8. Extension of tax incentives for economic corridors until 2022

  9. RM 150 million for the supply of raw water to Melaka

  10. EPF to proceed with RM 50 million Kwasa Damansara development


Development


  1. RM 15 million allocated for Transport Infrastructure projects including Pan Borneo Highway, Gemas-Johor Bahru project and Klang Valley Double Track Project

  2. Continuation of projects including the Rapid Transit System between Johor Bahru and Singapore and the MRT3 in the Klang Valley

  3. Government to proceed with High Speed Rail project, subject to discussions with Singapore

  4. RM3.8 billion for infrastructure projects including the construction of bridges and roads in several states

  5. Sin Tax

  6. Freeze on new import license for cigarettes

  7. Tightening of renewal of import licenses for cigarettes

  8. Restriction of transhipment of cigarettes to selected ports only

  9. Imposing of tax on the importation of cigarettes with drawback facilities for re-export

  10. Barring of all transhipment and re-export by small boats

  11. Imposing tax on cigarette and tobacco products in all duty-free islands

  12. 10% excise duty on e-cigarettes and non-electronic cigarettes, including vape


Digital Transformation


  1. RM1 billion for Industrial Digital Transformation Scheme

  2. RM150 million in grants for the digitalisation and automisation of small- and medium-sized enterprises (SMEs)

  3. Nearly RM1.2 billion for microcredit schemes

  4. RM10 billion for Syarikat Jaminan Pembiayaan Perniagaan Bhd

  5. RM2.5 billion for G1 to G4 contractors for small and medium projects nationwide

  6. MARA to provide RM50 million in funding scheme for Bumiputera contractors



Tourism

  1. RM50 million for retraining programmes for 8,000 airline staff

  2. 500 jobs for Orang Asli and local communities to become tour guides in all national parks

  3. RM50 million for the maintenance and restoration of tourism facilities nationwide

  4. RM35 million for the Malaysia Healthcare Travel Council

  5. Special RM1,000 grant for traders, taxi drivers, e-hailing drivers and tour guides in Sabah

  6. Human Resource Development Fund levy exemptions for companies in the tourism sector and those still affected by Covid-19 for six months

  7. Commodities

  8. RM20 million for sustainable palm oil certification programmes

  9. RM16 million for latex production incentives

  10. Government to open a furniture industrial park to create jobs in Pagoh


Agriculture


  1. RM50 million for organic agriculture project benefitting 1,000 communities

  2. RM150 million for modernisation of fishermen vessels

  3. RM60 million for modernisation programmes in the supply chain

  4. RM100 million for impactful and high-value agriculture and livestock

  5. Development of local products

  6. RM150 million for training programmes and assistance for 100,000 entrepreneurs

  7. RM150 million for the Shop Malaysia Online initiative

  8. RM35 million to promote Malaysia-made products

  9. Tax incentives for companies producing Covid-19 vaccines to invest in Malaysia


Science, Technology and Innovation


  1. RM400 million for selected ministries and agencies to carry out research and development (R&D)

  2. RM100 million for research into diseases, including vaccine development

  3. Investments in primary sectors

  4. RM1 billion to encourage investments in technology, including R&D for the electronic and aerospace industries, among others

  5. RM500 million to support companies involved in advanced technology and innovation

  6. Tax incentives for certain industries will be extended to 2022

  7. RM1.4 billion to support the development of the domestic supply chain and increase the development of local products including medical devices

  8. RM3.7 billion to extend several schemes for maritime and logistics development, sustainable development, tourism infrastructure and public transportation sectors

  9. RM2 billion in targeted aid for SMEs


National defense


  1. RM16 billion allocated to defence ministry

  2. RM17 billion to home ministry

  3. RM2.3 billion to maintain military assets

  4. RM27 million to improve the country’s cybersecurity

  5. RM500 million for the construction of 1,000 homes for families of military personnel

  6. RM153 million for RELA


Transport


  1. RM300 million to expand the My30 unlimited travel pass to Penang and Kuantan, Pahang

  2. Government to introduce unlimited monthly travel passes at RM5 for students and the disabled. This includes train services in the Klang Valley as well as other parts of the country

  3. Tax exemption for the purchase of locally assembled buses extended


Housing


  1. tamp duty exemption for first homes up to RM500,000

  2. RM1.2 billion for the provision of homes for low-income house buyers

  3. RM500 million for 14,000 PPR units

  4. RM315 million for 3,000 Rumah Mesra Rakyat

  5. RM125 million to repair dilapidated low-cost homes

  6. RM310 million for civil service homes

  7. Government to work with selected financial institutions for a rent-to-own scheme involving 5,000 PR1MA homes

Education


  1. RM50.4 billion for the education ministry accounting for 15.6% of the budget

  2. RM420 million for the Supplementary Food Programme for students

  3. RM725 million for dilapidated schools

  4. RM45 million for special needs education

  5. RM14.4 billion for the higher education ministry

  6. RM50 million to improve facilities and infrastructure at public universities

  7. RM50 million to upgrade internet connectivity in universities from 500Mbps to 10Gbps

  8. RM6 billion for technical and vocational education and training (TVET)

  9. RM300 million for loans for 24,000 students to pursue TVET programmes

  10. RM29 million for TVET programmes under the Ministry of Higher Education


Digital connectivity


  1. RM1.5 billion to ensure internet connectivity for the B40 group in the form of credit of RM180 per person. This will benefit eight million people

  2. Telcos to provide RM1.5 billion worth of benefits such as free data

  3. RM500 million for Jendela initiative, to boost internet connectivity in schools

  4. RM7.4 billion for MCMC to increase broadband service in 2021 and 2022

  5. GLCs to contribute RM150 million to the Cerdik fund for the purchase of laptops for 150,000 students in 500 schools


Youth and sports


  1. RM1,000 per month for three months for employers who hire fresh graduates for apprenticeship programmes

  2. One-off RM50 e-wallet credit for those aged between 18 to 20 years old. This will benefit 1.5 million youths

  3. RM19 million for national health programmes to encourage healthier lifestyles

  4. RM103 million to build, upgrade and maintain all sporting facilities nationwide

  5. Tax exemption for sporting expenditure increased from RM2,500 to RM3,000


Rural development

RM2.7 billion for rural infrastructure projects. This includes:

  1. RM1.3 billion for roads

  2. RM632 million for water supply

  3. RM250 million for electricity supply

  4. RM355 million to build new houses and repair dilapidated houses

  5. RM121 million to construct 27,000 lamp posts


Tax exemption and essentials goods


  1. 1% decrease in income tax for those earning between RM50,001 to RM70,000 per year

  2. RM20 million to establish B40 community centers for children to be looked after when school session ends

  3. RM170 million for early childhood education under KEMAS

  4. Further tax exemption for companies who hire senior citizens

  5. Tax exemption for disabled spouse increased from RM3,500 to RM5,000

  6. RM158 million for social and development programmes for the Orang Asli community, including the establishment of 14 new kindergartens.

  7. Extension of tax exemptions for companies who hire former convicts and drug addicts

  8. RM50 million for repair and maintenance of houses of worship under local councils

  9. RM100 million to empower the Indian community’s socio-economic development

  10. RM177 million to the Chinese community for education facilities and new villages

  11. RM30 million to establish childcare centers in government buildings especially hospitals

  12. RM21 million to set up social support centers

  13. RM95 million allocated to microcredit financing for women entrepreneurs

  14. RM500 one-off payment to religious teachers and leaders (takmir), expected to benefit nearly 70,000 people

  15. RM1.4 billion allocated to the Prime Minister’s Department for Islamic affairs

  16. RM4.6 billion allocated to empower Bumiputera entrepreneurs

  17. RM6.5 billion to provide access to quality education to Bumiputera institutions

  18. RM1 billion allocated for reskilling and upskilling programmes

  19. Government allocates RM2 billion to continue PenjanaKerjaya programme under Socso

  20. Government to allocate RM1.5 billion to extend wage subsidy programmes for another three months, particularly in the tourism sector

  21. RM3.7 billion for Skim Jaminan Penjanaan Pekerjaan (JanaKerja) to create jobs and improve skills

  22. RM400 million to abolish Felda settlers’ interest debts

  23. Fishermen’s allowance to increase from RM250 to RM300 a month

  24. RM200 million allocated for distribution of essential goods


EPF contribution for employees reduced from 11% to 9% for 12 months beginning January 2021


  1. RM24 billion for Socso’s employment injury scheme. Delivery riders will also be included in this scheme

  2. RM3,000 tax exemptions for contributors to private retirement schemes

  3. EPF to allow contributors to withdraw from Account 2 to purchase insurance

  4. Government to allow contributors to withdraw RM500 a month from their EPF Account 1 for 12 months from January 2021

  5. RM150 million allocated to extend Socso’s job search allowance for three months


Covid-19

The Covid-10 funds has been raised to RM 65 billion
RM1 billion to curb Covid-19 in the following ways:

  1. RM475 million for equipment and supplies for the health ministry

  2. RM318 million for frontliners’ PPEs and hand sanitisers

  3. RM150 million for the National Disaster Management Agency

  4. RM50 million to purchase equipment, laboratory supplies and medicine in university hospitals

  5. One-off payments of RM500 to frontliners


Public health


  1. RM24 million for mental health programmes

  2. Tax exemption of up to RM1,000 for medical treatment expenses involving vaccination

  3. Tax exemption for treatment of serious diseases increased from RM5,000 to RM8,000

  4. Tax exemption for health screenings from RM500 to RM1,000

  5. Tax exemption for medical treatment, special needs and care for parents increased from RM5,000 to RM8,000

  6. MySalam and Perlindungan Tenang voucher programme for the B40 to be expanded.

  7. RM90 million for pneumococcal immunisation programme for children.

  8. Aid for OKU increased from RM250 to RM300 monthly

  9. Aid for OKU carers, senior citizens and chronically ill patients from RM350 to RM500 monthly

  10. Incentive allowance for disabled workers increased from RM400 to RM450 monthly

  11. In total, RM2.2 billion allocated for monthly welfare aid, which will benefit over 400,000 people

  12. Bantuan Sara Hidup

  13. To be renamed Bantuan Prihatin Rakyat, with RM6 billion allocated to benefit 8.1 million people

  14. Households earning less than RM2,500 will receive RM1,200 to RM1,800, depending on the number of children they have

  15. Households earning between RM2,501 to RM4,000 will receive between RM800 to RM1,200, depending on the number of children they have

  16. Households earning between RM4,001 to RM5,000 will receive between RM500 to RM750, depending on the number of children they have

  17. Single individuals earning RM2,500 and below will receive RM350. Age limit for this is also lowered to 21 years


This sums up the National Budget of Malaysia for the year 2021. This budget will impact most either positively or negatively depending on the status of the individuals.


By Areez Jufri | 17 November 2020

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