Malaysian 2014 Budget: Highlights

The theme of the 2014 Budget is "Strengthening Economic Resilience, Accelerating Transformation and Fulfilling Promises". Below are the highlights of the national budget for the year 2014, as tabled by Prime Minister Dato' Sri Najib Tun Razak on Friday, October 25 2013.

1. A total of RM264.2 billion allocated in 2014 Budget for the implementation of programmes and projects for the well-being of the rakyat and national development.
2. RM 217.7 billion is for operating expenditure while RM46.5 billion for development expenditure.
3. RM63.6 billion allocated for emoluments and RM36.6 billion for supplies and services.
4. RM29 billion allocated to the economic sector.
5. RM10.5 billion allocated to the social sector for education, training, health, welfare, housing and community development.
6. RM3.9 billion allocated to the security sector, RM1.1 billion for general administration, RM2 billion for contingencies.
7. In 2014, Federal Government revenue collection is estimated at RM224.1 billion, up RM4 billion from 2013.
8. Federal Government fiscal deficit expected to further decline from 4% of GDP in 2013 to 3.5% in 2014.
9. RM1.2 billion allocated for operating and development expenditure in 2013 and 2014 to implement Visit Malaysia Year 2014 programmes, targeting 28 million tourists.
10. 2015 announced as the Year of Festivals.
11. The domestic economy is projected to grow at a stronger pace of between 5.0 per cent to 5.5 per cent.
12. The unemployment rate is estimated at 3.1 per cent while the inflation rate will remain low at between 2 per cent and 3 per cent.
13. Goods exports are expected to grow 2.5 per cent due to improving external demand while on the supply side, the construction sector is expected to grow 9.6 per cent.
14. The per capita income for 2014 is expected to reach RM34,126 compared with RM24,879 in 2009, an increase of 37 per cent over six years.
15. It is even possible that Malaysia will achieve developed nation status much earlier than 2020.
16. The 2014 Budget allocates a total of RM264.2 billion to implement programmes and projects.
17. Of this amount, RM217.7 billion is for operating expenditure and RM46.5 billion for development expenditure.
18. In 2014, the Federal government revenue collection is estimated at RM224.1 billion, an increase of RM4 billion from 2013.
19. The Federal government's fiscal deficit will further decline from 4 per cent of GDP in 2013 to 3.5 per cent in 2014.
20. Private investment is expected to increase further to RM189 billion or 17.9 per cent of GDP, particularly in oil and gas, textile industry, transport equipment and real estate development.
21. Public investment is estimated to reach RM106 billion.
22. Projects to be implemented include 316-kilometre West Coast Expressway from Banting to Taiping as well as double-tracking projects from Ipoh to Padang Besar and later from Gemas to Johor Baharu.
23. Projects undertaken by Petronas include Sabah Ammonia Urea Project in Sipitang; integrated oil and gas production development project, Kebabangan; regasification plant project, Lahad Datu; and RAPID, Pengerang.
24. The Government allocates RM1.6 billion for development in the five regional corridors.
25. Agropolitan project and oil palm-based industries to be implemented in Sabah Development Corridor, Samalaju Industrial Park and Halal hub in Sarawak Regional Corridor.
26. Services Sector Blueprint to be launched next year.
27. Logistics
    • Logistics Sector Master Plan and National Aviation Policy to be formulated.
    • RM3 billion in soft loans under the Maritime Development Fund through Bank Pembangunan Malaysia.
28. Aviation
    • To replace existing air traffic control and management system in Subang, a new air traffic management centre costing RM700 million will be built at KLIA.
    • Kota Kinabalu, Sandakan, Miri, Sibu and Mukah airports to be upgraded with RM312 million allocation.
    • Passenger terminals in Langkawi International Airport and Kuantan Airport to be upgraded.
29. Expanding internet access 
    • Second phase of High Speed Broadband (HSBB) project to be implemented in collaboration with private sector involving RM1.8 billion investment.
    • Internet speed to be increased to 10 Mbps.
    • To increase Internet coverage in rural areas, 1,000 telecommunications transmission towers to be built over next 3 years, with a RM1.5 billion investment.
    • To increase Internet access in Sabah and Sarawak, new underwater cables will be laid within 3 years, at a cost of RM850 million.
30. Strengthening of the financial market
    • Bank Negara Malaysia to lead in formulating the Netting Act to protect enforcement rights of close-out netting under the financial contract.
    • Environmental, Social and Governance Index (ESG) to be introduced.
    • Securities Commission to introduce Framework of Socially Responsible Sukuk Instrument.
    • To establish a SRI Fund to be invested in listed companies.
    • Valuecap to allocate RM1 billion to invest in companies that score high on the Environmental, Social and Governance Index Index.
31. National Entrepreneur Development Office to be established to plan and coordinate all activities related to entrepreneurship.
32. RM50 million allocation for Malaysian Global Innovation and Creativity Centre (MaGIC).
33. Committed 1Malaysia Entrepreneurs (1MeT) to be given further guidance at MaGIC.
34. Government targets 5,000 young entrepreneurs to be trained yearly.
35. Malaysia to host 5th Global Social Business Summit on Nov 7-9, 2013.
36. RM50 million to reduce graduate unemployment under Graduate Entrepreneurship Fund to be managed by SME Bank.
37. The Fund will provide soft loans of up to RM500,000 at interest rate of 4 per cent.
38. RM120 million for an integrated package to increase innovation and productivity of SMEs.
39. Some incentives under Green Lane Policy programme to be extended until Dec 31, 2017.
40. Difference in minimum wages paid by employers for the period of Jan 1, 2014 to Dec 31, 2014 to be given further tax deduction.
41. RM100 million to create Night Market Traders Entrepreneur Scheme under Bank Simpanan Nasional.
42. Ministry of Health, Ministry of International Trade and Industry, and Ministry of Finance to undergo performance evaluation based on Outcome-Based Budgeting (OBB).
43. To conduct audit on projects valued at more than RM100 million.
44. Monthly Tax Deduction as Final Tax, effective from 2014 assessment year.
45. To set up Implementation and Coordination Unit, with JPM to lead the initiative to avoid duplication in welfare assistance provision.
46. Introduction of Goods and Services Tax (GST)
    • Sales tax and service tax to be abolished, to be replaced by Goods and Services Tax (GST) effective April 1, 2015.
    • GST rate is fixed at 6 per cent.
    • GST will not be imposed on piped water and first 200 units of electricity per month for domestic consumers.
    • Transportation services such as bus, train, LRT, taxi, ferry, boat, highway tolls as well as education and health services are exempted from GST.

Source: BERNAMA