National budget of Malaysia for 2019 (Budget 2019) that is tabled on 2nd November 2018 can be perceived as a budget for the people. It carefully covers most of the people’s expenditure, including transportation, healthcare, food and housing. It also takes care of the B40 (the bottom 40% of household with monthly income of RM3,900 and below), senior citizens and women specifically.
Insurance
In government’s effort to make insurance more accessible to all, stamp duty will be waived for 2 years for all insurance products introduced by Bank Negara Malaysia that is under “Perlindungang Tenang”. This will take effect on 1st January 2019.
Income tax relief for life insurance and EPF contribution will be calculated separately as one of the other effort of Malaysian government to encourage higher insurance take up rate. Tax relief for EPF will be RM4,000 and takaful or life insurance premiums is RM3,000.
Government will also implement the Employment Insurance System (EIS) and SOCSO to compensate those who lost their jobs.
Housing/Properties
From Budget 2019, the government will allocate RM1 billion to help those earning below RM2,300 to own their first house. They will get a reduced financing rate as low as 3.5% per annum.
First-time house buyers will be exempted of stamp duty up to RM300,000 when they buy properties up to RM500,000. Mortgage is guaranteed for first-time buyers with household income lower than RM5,000.
Besides, the Real Estate Housing Developers Association (REDHA) also pledged a 10% reduction on house prices. There will also be a minimum 10% discount by developers and stamp duty waiver for unsold properties priced between RM300,001 to RM1 million.
A new idea that is mentioned is the Property Crowdfunding platform as an alternative financing to help those first-time house buyers. This will be discussed further in part 3 of this blog series, which will be on the new things suggested in Budget 2019.
Healthcare and small entrepreneurs
Government will allocate RM50 million to treat patients with rare diseases, haemodialysis treatment and hepatitis C.
Small local entrepreneurs and cottage industries will be receiving a helping hand from the government with an allocation of RM100 million to TEKUN National Foundation. A SME financing fund of RM4.5 billion by commercial financing institutions with 60% guaranteed by Syarikat Jaminan Pembiayaan Perniagaan Bhd will also be implemented.
Tax rates for some of the SME will be reduced as well. To know more on how Budget 2019 deals with taxes, you can visit the third part of this blog series.
Transportation
In terms of transportation, Budget 2019 tabled to freeze toll hikes for all intra-city tolls in Malaysia.
Good news for motorcyclist is that tolls for motorcycles on Second Link in Johor and Penang Bridges will be abolished starting from 1st January 2019.
Budget 2019 also suggested a fuel subsidy for 6.6 million vehicle owners. There will be a subsidy on RON 95 of 30sen per litres for cars with engine capacity less than 1,500cc and motorcycles with engine capacity less than 125cc. Car owners will receive up to 100 litres subsidized fuel and motorcyclist up to 40 litres.
There will RM100 monthly unlimited RapidKL rail and bus network pass and RM50 monthly unlimited RapidKL bus services available for all. This will not only reduce the cost of RapidKL users but also encourage more users to use rail and bus services in KL.
B40 households
B40 household group refers to the bottom 40% household with monthly income of RM3,900 and below. Budget 2019 shows that government understands the struggles of B40 groups with the increasing cost of living.
The government continued the Bantuan Sara Hidup financial aid from previous budgets. A grant of RM1,000, RM750 and RM500 will be provided to B40 households depending on their household income.
800,000 people aged 50 and above from B40 group will benefit from the healthcare protection scheme with health screening pilot project (PEKA). The government will allocate RM100 mil for this group of people.
Budget 2019 has also tabled a Health Protection Fund to provide free protection against 4 critical illnesses to B40 groups. The fund provides income cover up to RM8,000 and 14 days of hospitalization.
Senior citizens
To encourage employment of retirees, Budget 2019 will reduce employer’s contribution from 6% to 4% and a tax deduction to employers who employ retirees (age 60 and above).
There will also be a one-off RM500 cash assistance to pensioners who receives less than RM1,000 pensions. Debts balance of borrowers with ages above 60 years and have less than RM4,000 monthly income will be written off at a cost of RM4.2 million.
Women
In terms of taking care of women in the country, Budget 2019 allocated RM10 million to set up 50 childcare facilities in government buildings throughout Malaysia.
There is also an allocation of RM20 million to provide free health checks for 7,000 women.
The government also set up the EPF i-SURI, a special government incentive for housewives who are registered in e-Kasih programme. This means that housewives who are registered for the eKasih system as at 20th June 2018 and contribute a minimum of RM5 monthly to their Employment Provident Fund (EPF), will be eligible to receive a RM40 government incentive per month. Housewives will be able to benefit from THE Malaysia’s premier retirement savings fund as well.
In general, the budget is people-centric with good coverage on the people’s need.
Next blog, we will be looking at how innovative Budget 2019 is with several new plans and ideas proposed.
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