KUALA LUMPUR, Oct 30 — The federal government has announced its biggest Budget yet, with RM332.1 billion allocated for 2021 compared to RM322.5 billion for next year.

Through public consultation as well as other major stakeholders, the government’s Budget is based upon three key pillars namely Strengthening Recovery, Building Resilience and Driving Reforms.

This year the government had allocated RM233.5 billion for operational cost, RM75.6 billion for development and RM23 billion for Covid-19 fund while another RM2 billion is allocated as emergency funds.

However, ahead of the federal government Budget, the federal Opposition coalition Pakatan Harapan (PH) had also announced its shadow Budget, with an emphasis of an immediate injection of funds of RM45 billion, to address the impact of the Covid-19 pandemic, where RM30 billion should be spent on financial grant and subsidies for the economic sector, RM6 billion injected in work hiring incentives under the Malaysia@Work programme, RM5 billion for households, which include one-off payment and RM4 billion injected for the Health Ministry.

Malay Mail will chart the differences in major expenditure between the two Budgets.

Job growth

In terms of job growth, the government has allocated RM4.8 billion to create some 600,000 jobs compared to RM6 billion as suggested by PH to create between 250,000 to 300,000 private jobs.

The federal government announced several initiatives including expanding the JaminKerja programme under the Social Security Organisation (Socso) where RM2 billion was allocated to encourage some 300,000 people to return to work.

For further context, the initiative includes offering a wage incentive to employers of up to 20 per cent up for the first six months of employment and 30 per cent for the subsequent six months to encourage people to return to work. The incentive is to be increased to 30 and 40 per cent respectively for both six-month periods for targeted groups such as single mothers or housewives who have not worked more than a year, the disabled and the indigenous community.

Under the PH Budget, the coalition offered a similar solution where citizens are offered a RM500 incentive while employers are offered RM300. They also suggest that the programme should run for five years but each person is eligible to enrol under the programme for two years.

Overall, the government will also continue other initiatives such as Malaysia Short-term Employment Programme or MySTEP with 80,000 contractual jobs, with 50,000 in the public sector and 30,000 under government linked agencies will be open starting January 2022. 

PH also presented a solution of resuming efforts of upskilling and training employees such as programmes under MySkills.

The government had offered a similar solution under the Global Online Workforce (Glow) by the Malaysia Digital Economy Corporation (MDEC).

Overall, the government aims to reduce unemployment down to four per cent.

Household assistance

PH also proposed to increase the direct cash aid amount received by households under the Pakej Perlindungan Rakyat Dan Pemulihan Ekonomi or simply known as Pemulih.

Their proposed increased payments include RM2,500 for hardcore poor households followed by RM1,900 for the B40 and RM1,100 for the M40 households.

PH also proposed for the government to take into account households headed by mothers as woman-headed households only earn a median income of RM1,300.

They also proposed an RM100 monthly payment made to children under the age of 12 to help parents badly affected by the pandemic. This will also make the cash payment programme proportionate to the family size.

In comparison, the government had announced a new direct cash aid incentive dubbed the Bantuan Keluarga Malaysia (BKM) scheme.

Under the scheme, families with up to three children will get RM2,000, while single parents or households earning below RM5,000 monthly will get RM500, while childless families will get RM1,000 while those with two children are eligible for RM1,500.

A one-off payment of RM300 will also be given to the elderly.

Overall, the scheme will help 9.6 million recipients with a Budget of RM8.2 billion.

Economic recovery

PH had maintained the need for a loan moratorium interest waiver for B40 households whose gross income is less than RM5,880 per month while another RM2 billion channelled towards low-interest small business loans up to RM50,000 per loan for micro, small and medium enterprises via BSN with an easy and flexible application process.

PH also suggested the government put aside RM100 million into a Restart Matching Grant, with up to RM20,000 per grant for businesses that were forced to close due to the pandemic.

In comparison, the government has announced the Semarak Niaga Keluarga Malaysia or SemarakNiaga where the government has allocated some RM40 billion to provide a direct loan, financing and equity injection with the aim to benefit all segments of businesses.

This includes micro loan of RM1.8 billion provided under TEKUN, Agrobank, BSN, Bank Rakyat and Bank Negara Malaysia (BNM).

BSN and Agrobank would also provide microloans up to RM75,000 interest-free for the first six months.

The government also announced a RM1 billion fund under the RESET (Rehabilitation and Support Through Equity) Scheme to help firms with gearing or leverage issues.

While for tourism, PH suggests that the government explore the implementation of a government-backed Covid-19 travel insurance programme to boost confidence in domestic tourism.

The government announced key initiatives such as targeted wage subsidies for employers in the tourism subsidies who have seen their income reduced by at least 30 per cent.

A special RM85 million special assistance will also be distributed to some 20,000 tour operators affected by the pandemic.

Another RM38 million grant will also be made available to 738 hotels and inns registered under the Ministry of Tourism, Arts and Culture (Motac) for upgrading work on their premises, as announced by the government, among other measures. 

Another badly hit sector is the sports segment where the PH budget had suggested that the government convert the Sports Industry Financing Scheme into an interest-free easy payment loan with a six-month automatic moratorium and increase the fund size to RM100 million.

Other measures also include a rental subsidy of 50 per cent or up to RM5,000, a RM10,000 digitalisation grant, as well as RM1,000 monthly aid for six months for sports employees affected by the government’s movement restriction.

For this economic sector, the government had announced income tax exemptions including sports competition, international-level recreational activities and cultural activities until 2025.

Expenditure for public healthcare and Covid-19 fund

The Ministry of Health has been allocated RM32.4 billion for operational and development costs for next year as announced in the budget, the second-highest budget expenditure behind the Ministry of Education’s RM52.6 billion for the coming year.

The government has also allocated an additional RM4 billion specifically to combat Covid-19 with RM2 billion will be spent on vaccination programmes while another RM2 billion will be used to increase capacity in public health facilities and purchasing medical supplies such as personal protection equipment and health kits.

In comparison, PH had also suggested a similar figure of at least RM4 billion to be channelled to the Ministry of Health to increase its capacity in terms of patient care, manpower, the capacity of contact tracing, subsidising Covid-19 test kits and enhancing quarantine, among other measures.

In this regard, both budgets had addressed the urgent need to reinforce the public health care system after nearly two years of bracing the pandemic.

As an added measure to promote healthy living, the government also announced excise duty on liquid, gel-based vaping e-liquids that contained nicotine and sugary drinks in premix form based on chocolate or cocoa, malt, coffee and tea.

Green initiatives

PH had also suggested that the government scale up the Green Technology Financing Scheme (GTFS) 3.0 to spur government and private green projects.

This includes increasing the size of the GTFS to RM10 billion for the next two years (2022-2023), with RM200 million green interest subsidies borne by the government annually. 

PH also suggested that the government earmark 1,000 suitable government buildings and premises to undergo retrofitting energy efficiency and renewable energy projects.

In contrast, the government announced the Voluntary Carbon Market (VCM) programme under BNM to encourage sustainable practices where RM1 billion has been allocated.