2019 BUDGET SPEECH BY YB TUAN LIM GUAN ENG MINISTER OF FINANCE (Part 2)
Link to the original post: The 2019 Budget Speech
ONE: We will set up a Debt Management Office responsible
for reviewing and managing the government and its agencies’
current and future debt and liabilities. The Office shall have
oversight over debt issuance by the Federal Government, statutory
bodies and Special Purpose Vehicles. The government intends to
avoid higher debt service charges because of poor coordination of
debt issuance. The Office will also streamline Government funding
sources as a whole, centralising management of funds such that
statutory bodies with surplus can help meet the funding
requirements of other agencies at a more competitive cost.TWO: In order to rationalise our debts, we must not only
review our existing debts, we must also review our future debt
commitments that include recurring operational leases amounting
to tens of billions of ringgit. Therefore, the Government has taken
the decision to cancel the RM15 billion Multi-Product Pipeline and
Trans-Sabah Pipeline projects. The construction of the RM81
billion East Coast Rail Link (ECRL) is suspended, and is pending
renegotiation of the cost of the project.We have cancelled the RM60 billion MRT3 project for now,
pending the completion of MRT2. We have also postponed the
implementation of the Kuala Lumpur – Singapore High-Speed Rail
which would have cost us at least RM110 billion.The Government has decided to proceed with several
infrastructure projects which will be able to deliver high economic
multiplier effects after carrying out renegotiations with the
respective vendors. For the 37km LRT3 project carried out by
Prasarana Malaysia Bhd, we were able to reduce the overall cost of
the project from RM31.6 billion to RM16.6 billion. This represents
a savings of 47% or RM15 billion. For the MRT2 project managed
by MRT Corp, we have successfully reduced the cost of the
construction contract by RM8.8 billion from RM39.3 billion to
RM30.5 billion, representing a savings of 22.4%.The Klang Valley Double-Tracking 2 project which was
awarded via direct negotiations just before the last general election
for RM5.2 billion, has been terminated. The project will be retendered
via an open tender exercise and is expected to realise a
substantial reduction in cost. In addition, various Government
agencies are in the process of renegotiating contracts entered into
by the previous government amounting to RM19 billion. These
RM19 billion contracts were awarded via direct negotiations or
limited tenders. The government has left it to the Ministries to
decide whether to proceed with these contracts. These projects can
continue provided that there is a 10% reduction on the
construction cost. The Government expects to save RM1.9 billion
from this exercise. The billions of ringgit saved from these projects
significantly reduced our future debt burden.THREE: The Government will take all necessary actions to
recover funds lost and stolen from 1MDB. On 30 October 2018, we
have applied to the Courts of England for an order to set aside a
Consent Award recorded on 9th May 2017 by an Arbitration
Tribunal sitting in London between International Petroleum
Company (IPIC) with Aabar Investments PJS, and 1MDB with our
Minister of Finance Inc. Malaysia is using fraud as a reason not
to pay the balance of the US$4.32 billion to IPIC or Aabar under
the Consent Award, and recover the US$1.46 billion already paid.The Government is also working hand-in-hand with foreign
governments to recover seized cash and assets related to 1MDB.
We have successful seized a billion-ringgit luxury yacht,
Equanimity, and will commence its 1-month international auction
on 5 November 2018.FOUR: The Federal Government will track and publish not
only the direct Federal Government debt ratios, but also provide
the necessary transparency to disclose our total debt and liabilities.
The direct federal government debt of RM687 billion stood as 50.7%
of the GDP as at 31 December 2017. The direct federal government
debt has increased to RM725 billion as at 30 June 2018, but
maintained at 50.7% of the GDP.Once committed contingent liabilities and leased payments
are taken into account, our overall liabilities to GDP stands at 80.3%
in 2017 and is expected to reduce to 74.6% at the end of 2018.
Going forward for 2019, we expect our direct Federal Government
debt to GDP ratio to be 51.8% while our total liabilities to reduce
to 73.5%.
Strategy 3: Raising Government Revenue
Mr Speaker Sir,
- To achieve the above objective, we will first, leverage on
Government assets and second, review our taxation policies. The
measures to leverage on Government assets are:
Leveraging Assets
ONE: Where the opportunity arises and when the
Government is able to realise the full value of our non-core assets,
we will seek to reduce our stake in these non-strategic companies
and utilise the proceeds to pare down debt.TWO: The real Public Private Partnership (PPP) model for
public projects based on land swap transactions would be
implemented using an open tender mechanism and not direct
negotiations. Previously, through the direct negotiation model, the
real value of the government land is invariably under-priced while
the cost of the public works project is over-priced.The real PPP model based on open tenders will enable the
government to achieve the highest revenue for the asset disposed
while receiving the best value for the project to be awarded. Based
on this new model, twenty-four PPP projects such as schools, army
camps, police and fire stations as well as affordable housing, worth
RM5.2 billion will be implemented and the Government expects to
gain an excess of RM800 million over the cost of the public works
from the land sales.THREE: We will plan scheduled and staggered land sales via
auction to the highest bidders, based on conditions imposed on
the land, to maximise revenue for the Government.FOUR: To privatise infrastructure assets, the Government
intends to set up the world’s first “Airport Real Estate Investment
Trust (REIT)”. The investors of the Airport REIT will receive income
arising from user fees collected from Malaysia Airports Holdings
Bhd (MAHB) which has the concession to operate these airports.
The Government hopes to raise RM4 billion from selling a 30%
stake of the REIT to private investing institutions, while these
investors will gain an invaluable opportunity to invest in top
quality infrastructure assets. This REIT exercise will only be
carried out after the new Regulated Asset Base and user fees
structure has been negotiated and finalised.Going forward, the Airport REIT will have the opportunity to
raise funds publicly either by issuing new REIT units or via
borrowings in order to fund the improvement and expansion of
airports, especially those facing over-capacity. This financial
structure will significantly reduce the debt burden of the
Government to fund all of these projects on its own, while
maintaining MAHB as an asset light operator not bogged down by
heavy capital investments and debt. Other projects could also
benefit from similar funding and investment structures, such as
hospitals, or rail infrastructure.
Reviewing Taxation
Mr Speaker Sir,
As promised in our Harapan Manifesto, we have Zero-Rated
the GST as at 1 June 2018 and replaced the GST Act with the Sales
and Services Tax (SST) on 1 September 2018. Under the GST, only
545 items are zero-rated whereas under the SST, almost 10 times
the number of items are exempted. Perhaps the biggest impact is
to businesses, where 472,000 companies were previously required
to collect GST. In contrast, only around 100,000 companies are
required to collect the SST, greatly relieving the burden from many
small and medium enterprises. According to an initial study by
the Ministry of Domestic Trade and Consumer Affairs, 70% or 291
items from 417 inspected goods and services are found to have a
reduction in prices in September 2018 when compared against the
prices during the GST regime in May 2018.Nearly all operational issues and teething problems
associated with the SST have been resolved by the Customs
Department and the Ministry of Finance through public
interactions involving 50,000 people and tens of thousands of
questions. I have personally attended 18 SST dialogues with more
than 15,000 business people nationwide.To further improve the efficiency and effectiveness of the SST,
starting 1 January 2019, the Government will grant exemptions
for specific business-to-business Service Tax for registered Service
Tax entities. This will prevent the increase in the cost of doing
business as a result of compounded taxation and protect the
competitiveness of our local service industry.To assist the problems faced by small manufacturers who
purchase their products from importers instead of other registered
manufacturers, the Government will introduce a credit system for
Sales Tax deduction starting 1 January 2019. Again, this will
prevent compounded taxation and in turn will decrease the cost of
doing business.On top of the above, the Tax Reform Committee was set up in
September 2018 to identify and propose improvements and
additional measures to create a more progressive and effective
taxation system. Amongst the tax reforms proposed are:ONE: Imported services will be subjected to Service Tax so as
to ensure that our local service providers such as architecture,
graphic design, Information Technologies (IT) and engineering
design services are not unfairly disadvantaged against their foreign
competitors starting 1 January 2019.TWO: For online services imported by consumers, the foreign
service providers will be required to be registered with the Royal
Malaysian Customs, charge and remit the relevant Service Tax on
the transactions with effect from 1 January 2020. Examples of
these services will include, but are not limited to downloaded
software, music, video or digital advertising.The above measures will neutralise the cost disadvantage
faced by physical retailers against their virtual storefront
counterparts, especially those operated by foreign entities.
Mr. Speaker sir,
THREE: The Government will launch a Special Voluntary
Disclosure Program to offer an opportunity for taxpayers to
voluntarily declare any unreported income for Malaysian tax
purposes, including that which is in offshore accounts.During this year, Malaysia is now a participant of the
Organisation for Economic and Co-Operation and Development
(OECD) Common Reporting Standards, where we will receive
automatic exchange of financial account information (of nonresident
persons) with the tax authorities of a person's country of
residence.The Special Voluntary Disclosure Program will be offered
from 3 November 2018 until 30 June 2019 where taxpayers will
receive reduced penalty rates. If disclosure of unreported income
is made from 3 November 2018 until 31 March 2019, the penalty
will be 10% of the tax-payable. If disclosure is made from 1 April
2019 until 30 June 2019, the penalty will be 15% of the taxpayable.
After the program ends on 30 June 2019, the penalty
rates will range from 80% to the maximum of 300% as provided
for in the existing tax laws. With a clean and transparent
government, Malaysians will be more than willing to pay their
taxes because they know that the leaders of this Government will
not cheat and steal their money.FOUR: IRB will scrutinise and investigate unexplained
extraordinary wealth displayed by possession of luxury goods,
jewellery, handbags or property. The IRB will use all necessary
measures permitted by the law to recover such monies, whether in
the form of additional taxes, penalties or fines.FIVE: The Government will also be reviewing the existing
reliefs and incentives under the various tax acts to make them
relevant and cut down leakages. The Government will also now
place a time limit on the carrying forward of losses and allowances
for tax reliefs to a maximum of 7 years. This would apply to
unutilised business losses, capital allowances, reinvestment
allowance, investment tax allowance and pioneer losses.SIX: We will also carry out a thorough review of the over-130
types of fiscal schemes to support investments, administered by
32 approving authorities with the intention to expire incentives
which are no longer relevant or are duplicitous.SEVEN: The Royal Malaysian Customs after having
successfully launched the SST system, will step up enforcement
against cigarette smuggling. Currently, the Government collects
less revenue due to the widespread availability of much cheaper
contraband alternatives or even illicit products packaged with fake
custom duty labels. The Government hopes to recover at least RM1
billion in tax losses as a result of clamping down on smuggling and
fraudulent activities.EIGHT: To encourage domestic tourism, the Government
proposes to impose a departure levy for all outbound travellers by
air starting 1 June 2019. The proposed rate is 2-tiered, RM20 for
outbound travellers to ASEAN countries and RM40 to countries
other than ASEAN. The rate proposed is consistent or not more
than what many other countries are charging, including Thailand
at USD20, Hong Kong SAR at USD15 and Japan at USD10.NINE: The Real Property Gains Tax rates will be revised for
disposals of properties or shares in property holding companies
after the fifth year as follows:
• for companies and foreigners, the rate shall be increased
from 5% to 10%; and
• for Malaysian individuals, the rate shall be increased from
0% to 5%. However, low cost, low-medium cost and
affordable housing with prices below RM200,000 will be
exempted.TEN: The stamp duty on the transfer of property valued at
more than RM1,000,000 will increase from 3% to 4%.ELEVEN: Since 1999, tax exemption for interest earned on
wholesale money market funds was granted to develop the unit
trust industry. In Malaysia, the growth of these funds has been
substantial, at 24% annually since 2010 to achieve a total fund
size of RM42.9 billion as at December 2017. Hence the tax
exemption granted for these funds will cease beginning 1 JanuaryTWELVE: The Labuan International Business and Financial
Centre was set up as an offshore and mid-shore services centre to
provide a wide range of business and investment structures
facilitating cross-border transactions, business dealings and
wealth management needs. The Government will continue to
enhance Labuan’s competitiveness by removing restrictions on
trade in Malaysian Ringgit, transactions between Labuan and
Malaysian residents as well as maintaining the current tax rate of
3%. However, the tax ceiling of RM20,000 under the Labuan
Business Activity Tax Act 1990 will be removed.THIRTEEN: The taxes, fees and levy on the Gaming Industry
which have not been increased since 2005 are increased as follows:
• casino license to be increased from RM120 million to
RM150 million per annum;
• casino duties to be increased up to 35% on gross collection;
• machine dealer’s license to be increased from RM10,000
to RM50,000 per annum; and
• gaming machine duties to be increased from 20% to 30%
on gross collection.
However, the number of special draws will be reduced by half.Overall, for 2019, the Federal Government is expecting to
receive revenue of RM261.8 billion. This includes a one-off special
dividend of RM30 billion from Petronas which will go towards
repaying the GST and income tax refunds of RM37 billion. We are
grateful that Petronas, as a company has been run in an extremely
prudent fashion and has been able to accumulate the above
reserves which can be shared with the Government, without
jeopardising its ability to invest for its future growth.
FOCUS 2: TO ENSURE THE SOCIO-ECONOMIC WELL-BEING
OF MALAYSIANS
Mr Speaker Sir,
- Improving the socio-economic well-being of the rakyat will be
the key performance indicator of whether this new government is
successful. We will seek to meet this objective by ensuring welfare
and quality of life, improving employment and employability,
enhancing wealth and social welfare protection, raising real
disposable income and education for a better future.
Strategy 4: Ensuring Welfare and Quality of Life
ONE: We will continue the Government support for the B40
households via the “Bantuan Sara Hidup” (BSH) cash grants.
However, the program will be targeted to those in need, and
enhanced according to the size of the family. Starting January
2019:
• every household with a monthly income of RM2,000 and
below will receive the sum of RM1,000;
• households with a monthly income between RM2,001 and
RM3,000 will receive RM750;
22
• while those earning between RM3,001 to RM4,000
monthly will receive RM500.However, for every child 18 years old and below or is disabled
in the family (hence, with no age limit), there will be an additional
top-up of RM120 per child of up to a maximum of four children.
Therefore, in a family of four children with a monthly household
income of less than RM2,000, the household will receive a total
RM1,480 annually. This is more than the existing RM1,200 BR1M
payment for the same household.Hence, 4.1 million households will continue to receive
financial assistance from the Government, totalling RM5 billion.TWO: For housewives under the e-Kasih programme, we
have put in place an EPF i-SURI contribution scheme where we
incentivise caring husbands to contribute for their wives’
retirement savings with an allocation of RM45 million. For the eKasih
beneficiaries whose husbands contribute at least RM5
monthly into their wives’ accounts, the Government will contribute
RM40 a month.THREE: The Pakatan Harapan Manifesto has promised to
provide targeted fuel subsidy to individual car owners with engine
capacity of 1,300cc or less and motorcycle owners of 125cc or less.
However, the Government has decided to improve on our promise
by expanding the scheme to vehicle owners of 1,500cc and below.
Owners with multiple cars will not receive this benefit. The
Government has decided that each car and motorcycle owner will
enjoy up to 100 litres and 40 litres of RON95 petrol per month with
a subsidy of at least RM0.30 per litre, depending on the market
price of petrol. As many as 4 million car owners and 2.6 million
motorcycle owners will benefit from this targeted subsidy which
will cost the Government the sum of RM2 billion for 2019. Nonsubsidised
vehicles will have to pay pump prices for fuel
determined on a weekly basis based on the Automatic Price
Mechanism (APM). This scheme is expected to commence in the
second quarter of next year. This new scheme will also ensure that
leakages arising from fuel price arbitrage and cross-border
smuggling will be stopped.FOUR: To minimise the price differences between urban and
rural areas in Peninsula Malaysia, as well as in Sabah and
Sarawak, the Government will allocate RM150 million to equalise
prices of critical goods. They are wheat flour, processed sugar and
cooking oil in 1kg packs, local rice with 15% broken grains in 10kg
packs, and for RON95 petrol, diesel and liquid petroleum gas (LPG).FIVE: The Government is also adopting the latest technology
and techniques to be more efficient and effective in price
monitoring. Instead of hiring thousands of “price-checkers”, we
call upon all consumers to download the Price Catcher mobile
application and be part of a vigilant crowdsourcing effort to collect
information on the prices of goods and services. This service will
benefit not only all consumers in knowing the best prices in town,
it will help the authorities monitor against unlawful pricing
practices. The Government will allocate RM20 million towards
better enforcement.SIX: Currently, all households which consume RM20 or less
of electricity usage per month are fully subsidised by the
Government. The Government intends to make this policy more
targeted where only the poor and hardcore poor registered with eKasih
will qualify. In doing so, the Government is able to increase
the subsidy to RM40 per month benefiting 185,000 accounts, with
the allocation of RM80 million.SEVEN: The Government will identify and collaborate with
NGOs and social enterprises to support their efforts in uplifting the
underprivileged and marginalised communities. Examples of such
partnerships will include the Government procurement of
envelopes from Persatuan Pemulihan Orang Kurang Upaya. The
government will allocate RM10 million for this initiative.EIGHT: Income tax deductions will be provided for
contributions from any parties to any social enterprise subject to
a maximum of 10% of aggregate income of a company or 7% of
aggregate income for a person other than a company.
Strategy 5: Improving Employment and Employability
Mr Speaker Sir,With an unemployment rate of only 3.4%, Malaysia is
considered to be enjoying full employment. However, there are
structural problems causing long-term unemployment especially
among the youth. We will tackle these problems by:ONE: The Human Resource Development Fund (HRDF) will
launch 2 new programmes, “Apprenticeship” and “Graduate
Enhancement Programme for Employability” (GENERATE) to
provide skills to school-leavers as well as to increase the
marketability of our graduates from the institutions of higherlearning.
HRDF will allocate RM20 million in matching grants for
these programmes which will benefit at least 4,000 youths.TWO: The government will introduce policies to encourage
the employment of those past the retirement age of 60. By 2020,
there will be an estimated 1 million Malaysians aged between 61
and 65 years old who will still be active and productive. We propose
that the employer portion of EPF contributions be cut to 4% from
the current 6% effective 1 January 2019. To boost the disposable
income of working retirees, it is also proposed that the current
mandatory employee contribution for this group be zeroed. We also
propose to provide additional tax deduction to employers who
employ this group up to a monthly salary of RM4,000. This
provides an incentive for employers to hire or retain retirees,
particularly among the B40.THREE: To ensure that ex-convicts are not left behind as the
country moves forward and are able to contribute to economic
growth, the Government will provide an additional tax deduction
for companies who employ ex-convicts up to a monthly salary of
RM4,000 each. I wish to thank those who shared their inputs and
suggestions, including this measure, through the Budget 2019
portal.FOUR: Amongst the elderly, we also have many government
pensioners who are receiving pensions of less than RM1,000 per
month. We hear their appeals for assistance. Hence the
Government will provide a one-off RM500 assistance to the
qualified recipients.FIVE: Amidst those working with the Government and
serving the nation, there are nearly 30,000 ‘contract of service’
officers who do not enjoy most of the benefits extended to the civil
service. As such the Government will allocate RM10 million per
annum to make available healthcare service for the parents of
these ‘contract of service’ officers. In addition, these officers may
apply for ‘Quarantine Leave’ when their children suffer from
infectious diseases commencing 12 November 2018.SIX: The Government currently approves Unrecorded Leave
for Muslim officers to perform their umrah for up to 7 days for the
entire duration of service. To appreciate the fact that we have
201,600 non-Muslims in the service, the Government has agreed
to similarly allow for up to 7 days of Unrecorded Leave throughout
the duration of service for the purposes of performing their
religious pilgrimage and functions.SEVEN: The Government is also cognizant of the need and
importance of a living wage in an environment of rising costs. As
a first step, the minimum wage shall be raised to RM1,100 per
month for the whole of Malaysia starting 1 January 2019.EIGHT: To reduce wage disparity, regulations will be
implemented requiring public-listed companies in Malaysia to
publicly disclose key pay metrics each year in their annual report.
This will include ‘the lowest wage paid’, ‘average wage per worker’,
the ‘highest and lowest wage ratio’ as well as a statement by the
company of how they intend to improve their employees' average
pay.NINE: The Government will review our labour laws to improve
the labour market, workers welfare and ban discriminatory
practices by employers. We will also expedite the resolution of
industrial disputes between employers and employees by setting
up Industrial Appeals Court.
Strategy 6: Enhancing Health & Social Welfare Protection
Mr Speaker Sir,ONE: The Government also wants to assist those who have
lost employment with the full implementation of the Employment
Insurance System (EIS) starting 1 January 2019. The Social
Security Organisation (SOCSO) will pay compensation to those
who have lost their jobs, including employment-seeking and skills
training allowance. The EIS would also provide advice and help
these workers find new jobs at the fifty-four SOCSO offices around
the country.TWO: The Government is committed to helping Malaysian
households become more financially resilient through insurance
and takaful protection. Financial emergencies such as a critical
illness in the family can cause severe financial stress. Insurance
and takaful can act as a safety net by providing financial support
and enabling households to get back on their feet especially for the
lower income groups. In partnership with the private insurance
industry, the Government will pilot a national B40 Health
Protection Fund to provide free protection against top 4 critical
illness for up to RM8,000 and up to 14 days of hospitalisation
income cover at RM50 per day starting 1 January 2019. In other
words, hospitalisation income of RM700 per annum is available.
We are grateful to Great Eastern Life Insurance for agreeing to
contribute the initial seed funding of RM2 billion to this Fund to
be managed by Bank Negara Malaysia. We are expecting the fund
size to grow with more partnership and contributions with other
insurance companies. This is a big step for Malaysia because for
the very first time, together with the Employees Provident Fund
and the Social Security Organisation, we are starting a more
comprehensive social welfare protection coverage, particularly for
the middle- and lower-income groups.THREE: It is also our wish and intent that as the B40
households learn the benefit of insurance and takaful, they will
over time acquire their own protection policies. For this purpose,
Bank Negara Malaysia has launched ‘Perlindungan Tenang’ in
2017 to make available affordable, accessible and simple
insurance and takaful products for Malaysians costing as little as
less than a packet of cigarettes a month. The Government proposes
to waive stamp duty for all Tenang Insurance products for two
years beginning 1 January 2019.FOUR: To encourage higher insurance take up rate, the
combined tax relief for EPF contribution and life insurance or
takaful deduction will be separated into RM4,000 for EPF
contribution and RM3,000 for takaful or life insurance premiums.
For civil servants under the pension scheme, the tax deduction will
be up to RM7,000.FIVE: The Government will be allocating nearly RM29 billion
for Ministry of Health, which is an increase of 7.8% compared to
the previous year. This includes an allocation of RM10.8 billion to
provide medicine, to upgrade and improve the quality of health
services at our clinics and hospitals.SIX: The Health Ministry will pilot a nationwide health
screening programme, Skim Perlindungan Kesihatan (PEKA) for
800,000 individuals aged 50 and above in B40 households at a
cost of RM100 million.SEVEN: To protect women’s health, we are allocating RM20
million to provide free mammogram screening, PVHPV vaccination
as well as pap smear tests for 70,000 women.EIGHT: The Government will also allocate RM50 million for
the specific purpose of treating rare diseases, Hepatitis C virus,
stunted growth among children, providing more haemodialysis
treatments and Enhanced Primary Healthcare (EnPHC).
30NINE: The Government will widen the Public-Private
Partnership programs where the Government will invest in the
healthcare facilities while the private sector will also invest to
deliver the best quality of service to the people. The examples of
such partnerships include Pusat Katarak Majlis Agama Islam
Wilayah Persekutuan (MAIWP), Selayang.TEN: Statistics from the Ministry of Health showed that
nearly one out of two Malaysians were overweight or obese.
Therefore, the Government has decided to add as a start, ‘sugar
sweetened beverages’ to the list of manufactured goods subject to
excise duty in an effort to help address this issue. The duty
proposed will be at RM0.40 per litre to be implemented on 1 April
2019:
• for non-alcoholic beverages containing added sugars of more
than 5gm per 100ml drink; and
• for fruit or vegetable juice containing added sugars of more
than 12gm per 100ml drink.ELEVEN: The Ministry of Health has also set 2045 as the
year to achieve our goal to be a “Smoke-free Malaysia”. As such,
the Ministry will expand the number of locations where smoking
will be disallowed starting 1 January 2019.We can only enjoy the fruits of economic growth and the
country’s prosperity if we are safe and secure. The Government will
strengthen our national security by allocating development
expenditure of RM5.9 billion to the Ministry of Defence and
Ministry of Home Affairs.
Strategy 7: Raising Real Disposable Income
Mr Speaker Sir,
Based on the study by Khazanah Research Institute, in 2016,
households with income below RM2,000 spent 95% of their
incomes in consumption respectively. The income remaining after
accounting for inflation is only RM76 in 2016, as compared to
RM124 in 2014. The two largest expenditure components other
than food, is housing and transport. Therefore, besides attempting
to increase real disposable income of ordinary households with the
measures mentioned earlier, this Government wants to specifically
address the cost and affordability of housing and transport for
Malaysians for both the B40s and M40s.
Housing for AllWe will continue to support the construction and completion
of affordable homes with an allocation of nearly RM1.5 billion for
Program Perumahan Rakyat, Perumahan Penjawat Awam
Malaysia, PR1MA and Syarikat Perumahan Nasional Bhd to
ensure the availability of supply.However, without the necessary availability and accessibility
of loans from financial institutions, the supply of these affordable
homes will fail to meet the pent-up demand for housing. To assist
the lower income group earning not more than RM2,300 per month
to own a house for the first-time, a fund amounting to RM1 billion
will be established by Bank Negara Malaysia, to help them to
purchase affordable homes priced up to RM150,000. The fund will
be made available from 1 January 2019 at participating financial
institutions, namely AmBank, CIMB, Maybank, RHB and BSN
through a concessionary financing rate as low as only 3.5% per
annum. This will significantly reduce the monthly financing
instalment of borrowers to own a house, and make it easier to
qualify for the required financing. The RM1 billion fund is available
for two years or until the allocation is exhausted.For first-time home-buyers purchasing residential properties
priced up to RM500,000, the Government will exempt stamp duty
up to RM300,000 on sale and purchase agreements as well as loan
agreements for a period of two years until December 2020. For
first-time home-buyers with household income of RM5,000 or less,
the Government will allocate RM25 million to Cagamas Berhad to
provide mortgage guarantees to enable borrowers to obtain higher
financing from financial institutions, inclusive of down payment
support. These measures are expected to give between 7% and 11%
cost savings to the house buyers, before taking into consideration
any promotional discounts which may be offered by the property
developers.