Malaysia is on track to become a developed, high-income nation by 2020. Although our economy continues to grow bringing new jobs and new opportunities for Malaysians, I know the rakyat feels pressure from rising costs. One of the Government’s key objectives is to manage the cost of living and keep inflation low. We are listening to your concerns and are constantly working to address them by drawing up inclusive, balanced and fiscally responsible budgets.
Feedback from the Rakyat on #Bajet2014
During the #Bajet2014 online discussion, one of the main concerns raised by the rakyat was the availability of affordable housing. In response, we allocated RM1 billion for PR1MA to build 80,000 houses at 20% below market prices, and injected funds to provide 26,122 affordable houses.
Another prominent concern was car prices. So in #Bajet2014, the Government introduced the National Automotive Policy (NAP), aimed at gradually reducing car prices by 20-30% over the next five years.
One of the things we can do is make it easier to get around without a car. As Malaysia’s economy grows, so too does the density of our cities. To avoid total gridlock, it’s crucial to find long-term solutions to ease traffic congestion and improve public transportation, in Kuala Lumpur and beyond. The Klang Valley Mass Rapid Transit (KVMRT) does just that by extending public transportation coverage by 51 km.
Each train serving the line will have four coaches with a maximum capacity of 1,200 passengers. The KVMRT is expected to ease road congestion by providing public transportation for up to 400,000 passengers daily. In addition to that, the Government will extend the existing Light Rail Transit (LRT) coverage by lengthening the Kelana Jaya and Ampang lines to Putra Heights. To further fulfil our objective to increase clean public transportation, the proposed Electrified Double Tracking Project (EDTP) from Ipoh to Padang Besar will provide ease of travel for residents in the northern states of Perak, Kedah, Penang and Perlis.
Goods and Services Tax, Income Tax reductions and BR1M
Although spending to increase standards of living is important, we also need to look at strengthening our finances. The GST is a 6% tax on goods and services which will replace the existing service and sales tax – not add to it – in April 2015. Many essential goods and services will be exempt – including basic foods like rice, flour, and oil; and essential services like household water supplies and public transport. Out of 193 countries in the world, 160 have a GST. We need this new and more equitable tax, because only 1 in 10 Malaysians pay tax. We need to broaden our revenue stream, continue to reduce our deficit and invest in the future. The GST will allow us to do this.
Along with strengthening our nation’s finances by introducing the GST, the Government will increase the disposable income of the rakyat by reducing a range of income taxes. Individual income tax rates will be reduced by between 1-3% for all taxpayers. With this measure, 300,000 current taxpayers will be tax-exempted. Our corporate income tax rate will also be reduced by 1%. Income tax rates for Small and Medium companies will be reduced by 1% from 2016 onwards. Finally, cooperative income tax rates will be reduced by 1-2% from 2015.
Helping those that need it the most is important to the Government. That is why over the next five years, the government will increase BR1M to 1,200 ringgit per year, to help alleviate rising living costs. BR1M is another measure used to help Malaysians with a rising cost of living. It is a targeted subsidy provided on the basis of need alone.
I was encouraged by all the responses from the rakyat during #Bajet2014 – sentiments focused on everything from housing to culture.
Starting today, you can express your ideas, concerns, and needs – all of which will be considered into #Bajet2015 in a dedicated microsite and through my Facebook page. I am looking forward to your contributions.
To achieve our Vision 2020, we need a fiscally responsible budget that takes account of the rakyat’s needs. I believe that with your help, #Bajet2015 will continue to spur growth, improve our fiscal position, and raise living standards for the rakyat. Malaysia is on the brink of developed nation status. Committed as one, we can achieve this goal. Let us continue what we have started together.