PHOTO - Malaysian Prime Minister Datuk Seri Najib Tun Razak.
Early ICT industry reactions have generally welcomed the Budget 2013 proposals tabled by the Malaysia prime minister Datuk Seri Najib Tun Razak on Friday 28 September 2012, which included RM3 billion (US$979 million) in direct cash payments, tax cuts and bonuses of 1.5 month's salary for 1.3 million civil servants.
Themed 'Prospering the Nation, enhancing well-being of the Rakyat (People): a promise fulfilled,' Najib, who is also the finance minister, said that the allocation for next year's budget is RM251.6 billion (US$82 billion).
"The government remains committed to ensuring the nation's economic growth continues to flourish despite uncertainties and challenges in the global economy," he said.
"The nation's strong economic fundamentals, supported by an accommodative monetary policy have placed the economy on the right path," said Najib. "In the first half of 2012, the economy expanded 5.1 percent mainly supported by robust private investment and consumption. In tandem with improved investor confidence in Malaysia as a major investment destination, net inflows of foreign direct investment [FDI] amounted to RM13.6 billion [US$4.45 billion]."
"For 2012, despite moderate global economic growth and trade, the Malaysian economy is estimated to expand strongly between 4.5 and 5 percent," said Najib. "Growth will be driven by private investment at 11.7 percent to RM127.9 billion [US$41.82 billion]. The performance far exceeds the total investment in 2009 at RM81 billion."
"[This] trend reflects the growing vibrancy in domestic investment, particularly with the implementation off projects under the Economic Transformation Programme [ETP]. This will support the construction sector to surge 15.5 percent in 2012 from 4.6 percent in 2011," he said.
The prime minister also said personal income tax would be cut by one percentage point for those earning up to RM50,000 [US$16,348] in chargeable income per year and RM2 billion [US$654 million] to support sustainable green projects. "The measure will remove 170,000 taxpayers from paying tax as well as provide savings on their tax payment."
"The 2013 budget will focus on improving the quality of life of the people, ensuring sustainable growth, spending prudently and reducing the fiscal deficit with the overall objective of prioritising the well being of the people," said Najib.
The government will reintroduce foreign company acquisition incentives and tax incentives for local service providers, he said during his speech, including RM350 million [US$114.4 million] for all entrepreneurs, including RM50 million [US$16 million] for Indian entrepreneurs, as part of a continued balanced support for different groups in the country.
To cultivate a higher quality of education, Najib allocated RM38.7 billion [US$16.34 billion] with an additional RM500 million [US$162.91 million] to training teachers in the core subjects of English, Bahasa Malaysia, Science and Maths.
Sign up for CIO Asia eNewsletters.