The budget will focus on four key strategies on reinvigorating private investments; intensifying human capital development; enhancing the quality of life of the people; and strengthening public services delivery.
Of the allocation, RM162.8 billion is for operating expenditure and RM49.2 billion for development expenditure.
For 2011, the deficit is expected to further decline to 5.4% of GDP compared with 5.6% in 2010. The government revenue collection is estimated to increase 2.3% to RM165.8 billion in 2011.
Najib said the budget will emphasise efforts to transform the nation into a developed and high-income economy with inclusive and sustainable development spearheaded by the private sector while focusing on the well-being of the people.
With the private sector set to resume its role as the engine of growth, private investments in 2011 is estimated to expand 12.5% to RM86 billion. The implementation of the 12 NKEAs is expected to generate investment exceeding RM1.3 trillion and create 3.3 million jobs opportunities. The private sector will finance 92% of the NKEAs and the remaining by the government.
The government has also revised growth to 7% from the previous forecast of 6% for this year. Next year, growth will be supported by private investments, expanding 10.2%, private consumption 6.3% and exports 6.7%, with the manufacturing sector continuing to lead growth, growing by 6.7% and services 5.3% in 2011.
In intensifying human capital development, a sum of RM29.3 billion is allocated to the Education Ministry, RM10.2 billion for the Higher Education Ministry and RM627 million for Human Resource Ministry.
Among the highlights of the 2011 Budget are:
* RM1 billion allocation from the Facilitation Fund for public-private partnership initiatives.
* Permodalan Nasional Berhad developing Warisan Merdeka, expected to be completed by 2020. Comprising a 100-storey tower, the tallest in Malaysia, it will retain Stadium Merdeka and Stadium Negara as national heritage. The total project cost is RM5 billion, with the tower expected to be completed by 2015.
* The Securities Commission will offer three new stock broking licences to local, foreign or joint-venture companies, and an increase in the number of Proprietary Day Traders.
* Entrepreneurship Enhancement Training Programme to train 500 new technopreneurs and attract more angel investors to be managed by Cradle Fund Sdn Bhd, an MOF Inc.
* RM50 million allocation for Skim Pembiayaan Perumahan Kos Rendah, managed by Bank Simpanan Nasional, to assist estate workers to own houses with a maximum amount of RM60,000 at 4% interest rate and a repayment period up to 40 years extending to the second generation.
* Govt will introduce Skim Rumah Pertamaku through Cagamas Bhd which will provide a guarantee on down payment of 10% for houses below RM220,000 to first-time house buyers with household income less than RM3,000 per month. House buyers can now obtain a 100% loan.
* First-time house buyers will also be given stamp duty exemption of 50% on instruments of transfer on a house price not exceeding RM350,000. Stamp duty exemption of 50% to be given on loan agreement instruments to finance such first-time purchase of houses.
* A RM100 million start-up fund for Malaysian Technology Development Corporation (MTDC) to provide soft loans which allow loan repayments only after the companies generate income.
* The Bumiputera Property Trust Foundation (BPTF) to be set up to provide opportunities for bumiputra ownership of prime commercial properties in major towns. A RM1 billion Bumiputera Property Trust Scheme to be launched this year to enable bumiputra ownership of prime commercial properties in the Klang Valley, through a group ownership scheme.
* A private pension fund to be launched in 2011. The existing income tax relief of up to RM6,000 for employee's contributions to the EPF will be extended to the contributions made to the fund, including the self-employed. Employers will also be given tax deduction on contributions made.
* RM857 million for local companies to invest in electrical and electronics (E&E) high value-added activities, particularly in Penang and the Kulim High-Tech Park in Kedah.
* Incentives for green technology including pioneer status and investment tax allowance for the generation of energy from renewable sources and energy efficiency activities be extended until end-2015; extension of import duty and sales tax exemption on equipment until end-2012; and full import duty and 50% excise duty exemption to franchise holders of hybrid cars, and hybrid and electric motorcycles up to end-2010.
To further encourage ownership of hybrid cars, import duty and excise duty exemption will be extended until Dec 2011 with excise duty to be given full exemption.
* Implementation of programme on blending of biofuels with petroleum diesel (B5 Programme) on a mandatory basis beginning in Putrajaya, Kuala Lumpur, Selangor, Negri Sembilan and Malacca in June 2011.
* Allowing electricity generated from renewable energy by individuals and independent providers to be sold to electricity utility companies.
* RM3.8 billion allocated to increase productivity and generate higher returns in the agriculture sector.
* RM85 million infrastructure facilities for hotels and resorts in remote areas with the potential to attract tourists. RM50 million to build shaded walkways in the KLCC-Bukit Bintang vicinity.
* To promote Malaysia as a shopping haven in Asia, import duty on 300 goods preferred by tourists and locals, at 5% to 30% be abolished. Such goods includes apparel, handbags, shoes, shampoo and suits.
* For palm oil industry, a RM297 million fund to enhance productivity by encouraging replanting activity using high quality new clones. RM127 million to support domestic oleo derivatives companies, and RM23.3 million to expand downstream palm oil industries including production of vitamins.
* For ICT, MY Creative Content Programme to be implemented with a RM19 million allocation to encourage the development of local content creation, hosting local content and unlocking new channels for content.
Investment allowance period extended for the last mile broadband service providers. Import duty and sales tax exemption on broadband equipment extended for two years until 2012
* 10% sales tax be exempted on all types of mobile phones.
* RM850 million for infrastructure support for corridor and regional development.
* Research, development and commercialisation (R&D&C) activities allocated RM411 million. A one-stop centre, Special Innovation Unit (UNIK), under the Prime Minister's Department with a RM71 million allocation to formulate policies and strategies for a conducive ecosystem to drive innovation. To commercialise R&D findings by universities and research institutions.
* New Insolvency Act to consolidate the Bankruptcy Act 1967 and Part 10 of the Companies Act 1965, including introduction of provision relating to relief mechanism for companies and individuals with financial problems. The review will also involve amending the minimum bankruptcy limit of RM30,000.
* RM200 million allocated to purchase creative products such as high quality locally-produced films, dramas and documentaries.
* Service tax be increased to 6% from 5%. Service tax be imposed on paid television broadcasting
* Talent Corporation to be set up under the Prime Minister's Office in early 2011. It will formulate a National Talent Blueprint and develop an expert workforce database as well as collaborate closely with talent networks globally.
* RM6.4 billion for development expenditure to build and upgrade schools, hostels, facilities and equipment, as well as uphold the status of the teaching profession.
* RM213 million allocated to reward high-performance schools as well as for the remuneration of principals, head teachers and excellent teachers
* RM250 million for development expenditure to religious schools, Chinese-type schools, Tamil national schools, missionary schools and government-assisted schools
* A RM500 million allocation for 1Malaysia Training Programme, which will commence in January 2011, for upskilling and reskilling of workforce.
* RM200 million from the Human Resource Development Fund for companies to fund specific training programmes for their employees. Human Resource Ministry to provide RM100 million for employees to enhance skills in various technical fields.
* The basic salary of postmen was raised to RM710 on July 1, 2010 from RM610 per month. With this adjustment, the monthly salary of postmen including fixed allowances increased to RM1,285 from RM1,035.
* Basic minimum wages for security guards set at between RM500 and RM700 a month depending on location, compared with RM300 and RM400 currently. With this increase, security guards will now enjoy a monthly salary including allowances exceeding RM1,000. The increase is effective January 2011.
* Toll rates in four highways owned by PLUS Expressway Bhd will not be raised for the next five years, effective immediately.
* RM350 million to combat crime, including burglary, motorcycle and car thefts as well as promoting safe townships and Voluntary Patrol Scheme in high-risk areas. An additional 25 special courts to be established to expedite prosecution.
* 10 Trust Schools to be managed more professionally to ensure students obtain quality education.
* To assist children, particularly those from the low-income group excel academically, the 1MDB will provide multi-vitamins for primary school students. 1MDB to provide RM20 million to the 1Malaysia Youth Fund to instil the 1Malaysia spirit. 1MDB to implement 1Malaysia Mobile Clinics with four buses as mobile clinics in collaboration with the Ministry of Health.
