Budget 2015: Live updates

Prime Minister Datuk Seri Najib Razak is today unveiling the Budget 2015.

Najib hinted yesterday the Budget would be "pro-Rakyat" and would address the people's concerns over the rising cost of living and employment issues.

Here is an outline of what has been announced so far with regards to employment, cost of living and, individual income tax, sustainability and SMEs.

More information to come. Most recent news on top.

Information about the fifth strategy: Upholding the role of women

"Indeed women are special. Their uniqueness not only adds grace to the family but they also play a crucial role in addressing life’s challenges. The Government recognises that women have a pivotal role in national development and in nurturing future generations.

"Presently, women represent only 38% of the total workforce in the country. To enhance the contribution of women in national development, the Government will continue to focus on efforts to intensify the involvement of women in the job market and entrepreneurial activities."

The Ministry of Women, Family and Community Development is allocated RM2.26 billion for development and operating expenditure. This includes:

Strengthening Women Directors Programme to achieve the 30% participation of women in decision-making positions. In 2015, the Government plans to train 125 potential women directors to fill the position as members of the board of Government-linked companies and the private sector.

Improving opportunities for women to return to the job market through the 1Malaysia Support for Housewife programme which emphasises skills training and incentives for housewives.

Talent Corp will set up the Women Career Comeback Programme for professional women returning to the job market based on professional qualifications.

A sum of RM30 million will also be allocated through Amanah Ikhtiar Malaysia (AIM) to inculcate the spirit of entrepreneurship among Indian women.

For civil servants, the Government will improve the Child Care Leave eligibility by revising the conditions so that the eligibility is not tied to the duration of maternity leave, effective 1 January 2015. The leave is limited to children until they reach one year and is extended to female personnel with step children, legally adopted children, foster children and children with disabilities.

The existing guidelines on childcare facilities in businesses will be reviewed. From January 2015, the Government will allow employers to set up child care centres beyond the second floor subject to conditions set by the local authorities.

Information about the third strategy: Developing Human Capital and Entrepreneurship

"Currently, human resource is among the key factors contributing to prosperity of a nation. Wealth creation is no longer solely dependent on resources such as petroleum, oil palm or minerals but also includes ideas, creativity and innovation as well as people’s skills including invention of new products which are capable of driving economic growth and nurturing new entrepeneurs.

• Strengthening Teaching Professionalism and School Performance: The Government will allocate RM56 billion to the Ministry of Education for various teaching and learning programmes. Emphasis will be given towards strengthening schools which require guidance and special assistance.
• Empowering Trust Schools and Building New Schools: The government will expand the Trust Schools programme which started in 2011.
• Mainstreaming Technical and Vocational Education: By 2020, at least 46% of jobs will require technical and vocational qualifications. For this, the Government will increase the student intake in vocational and community colleges through the Vocational and Technical Transformation programme and upgrade colleges. For this purpose, the Government allocates RM1.2 billion.
• Enhancing Graduate Employability: "To date, it is estimated that 53,000 graduates remain unemployed after six months of graduating."

To enhance graduates' employability, the Government proposes that the curriculum and skill training programmes at public skill training institutions as well as institutions of higher learning be reviewed. For this, Talent Corp will provide RM30 million for Industry Academia Collaboration programme where universities, Government entities and industries will collaborate to develop the curriculum for the internship programmes and industrial training.

In addition, graduates’ self-confidence and English proficiency skills will be enhanced. Currently, students need to have a minimum of Band 1 in Malaysian University English Test for entry into public institutions of higher learning (IPTA).

In the second quarter of 2014, there were a total of 13.5 million jobs, an increase of around 1.6 million jobs compared to 2010. To safeguard the welfare of workers:

(i) The Employment Act 1955 and related labour acts will be reviewed, including better terms and conditions of employment, appointment and dismissal, flexible working arrangements and termination benefits;

(ii) The JobsMalaysia portal will be improved to meet the needs of an increasingly dynamic labour market;

(iii) The Government will introduce an Employment Insurance System aimed at assisting retrenched workers by giving temporary financial assistance as well as providing opportunities for reskilling and upskilling; and

(iv) Providing technical training and education assistance to Indian youth, particularly those from low-income families with an allocation of RM30 million.

• Globally Recognised Industry and Professional Certification Programme: To intensify upskilling and reskilling programmes, the Government will introduce a new programme, namely Globally Recognised Industry and Professional Certification Programme or 1MalaysiaGRIP with an allocation of RM300 million in matching grants between the Government and the Human Resources Development Fund to train 30,000 workers.
• Promoting Startups: The Government aspires to position Malaysia as a choice location for startups in the region. Among the efforts is the establishment of MaGIC which aims to create a more conducive ecosystem to facilitate the Startups to commence operations. To attract more expatriate entrepreneurs establish Startups in Malaysia, the paid-up capital for Startups is set at RM75,000. Eligible expatriate Startup entrepreneurs will be given Work Pass for one year.

Seven main strategies

The 2015 Budget is formulated with focus on the people’s economy and outlines seven main strategies:

First Strategy: Strengthening Economic Growth;
Second Strategy:Enhancing Fiscal Governance;
Third Strategy: Developing Human Capital and Entrepreneurship;
Fourth Strategy: Advancing Bumiputera Agenda;
Fifth Strategy: Upholding Role of Women;
Sixth Strategy: Developing National Youth Transformation Programme; and
Seventh Strategy: Prioritising Well-Being of the Rakyat.

The People's Economy

Najib said the Budget 2015 will balance between a focus on capital economy and the “People economy”.

“When we refer to the People’s Economy, it is an economy that is rakyat-orientated covering  priorities and interests of the rakyat such as cost of living, household income, education  opportunities, employment and business, quality of life, skills training, entrepreneurship as well as security and safety. In brief, it refers to an economy based on the daily lives of the rakyat  which I call the People’s Economy."

Economic performance, unemployment and Budget allocation

Inflation is expected to be at 3.4% in 2014, which is higher than 2.1% in 2013. The unemployment stays steady at 3.1% for 2014.

RM273.9 billion is allocated under Budget 2015, which is RM9.8 billion more than the previous budget. Of the amount, RM223.4 billion is for operating expenditure while RM50.5 billion for development expenditure.

For 2015, economic growth is expected to remain strong between 5% and 6% while the fiscal deficit is projected to further decline to 3% of GDP.

The 11th Malaysia Plan (11MP)

In May 2015, the 11th Malaysia Plan (11MP) will be launched. At the same time, a new approach known as the Malaysian National Development Strategy (MyNDS) is being formulated. This means Budget 2016 will be the trigger to the final five years of Malaysia’s progress to a high-income advanced economy by 2020.

"Many countries such as Korea, Germany, Japan, Taiwan and China began their economic progress based on agriculture and have since moved to an economy that emphasises high level of knowledge, skills, innovation and expertise," he said.

"To put it simply, economic planning and policies of a country need to be adjusted according to the developments and challenges in the domestic and external environment. Hence, to remain resilient and competitive, Malaysia must move to an economy based on knowledge, high skills, expertise, creativity and innovation."

Background

Najib begins his Budget 2015 speech by saying that Malaysia has, over the years, formulated various short, medium and long-term plans in its efforts to achieve prosperity, which is why the country has reached its present level of success.

"Nevertheless, many people are not aware that the process to develop and prosper the nation has not been easy. It takes hard work, comprehensive plans as well as painful and unpopular decisions. However, all these have to be undertaken by a responsible and accountable Government that always prioritises the interests of the rakyat."

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