With the theme "Transformation Towards a Developed and High-Income Nation", the 2011 Budget will centre on the following four key strategies:
1. Reinvigorating private Investment;
2. Intensifying human capital development;
3. Enhancing quality of life of Malaysians; and
4. Strengthening public service delivery
1. Reinvigorating private investment;
Privafe-public partnerships
* In 2011, private investment is estimated to expand 12.5% to RM86 billion
* The implementation of the 12 National Key Economic Areas (NKEA) to generate investment exceeding RM1.3 trillion and create 3.3 million jobs
* The private sector will finance 92% of the NKEA and the remaining by the government
* Several PPP projects identified under the 10MP will be implemented in 2011 through private investment of RM12.5 billion
* The government to allocate RM1 billion from the Facilitation Fund.
* Construction of highways such as the Ampang-Cheras-Pandan Elevated Highway, Guthrie-Damansara Expressway, Damansara-Petaling Jaya Highway, Pantai Barat-Banting-Taiping Highway, Sungai Dua-Juru Highway and Paroi-Senawang-KLIA Highway;
* Construction of a 300-megawatt combined-cycle gas power plant in Kimanis, Sabah to increase electricity generation capacity to meet rising demand; and
* Development of projects such as the International Islamic University Malaysia Teaching Hospital in Kuantan, Pahang, the Women and Children's Hospital as well as the Integrated Health Research Institute Complex in Kuala Lumpur.
* The Academic Medical Centre, a joint venture between Academic Medical Centre Sdn Bhd and Johns Hopkins Medicine International as well as Royal College of Surgeons Ireland. This project involves private investment of RM2 billion.
* 1Malaysia Development Berhad (1MDB) in collaboration with Mubadala Development Company, an investment arm of the Government of Abu Dhabi, to develop the Kuala Lumpur International Financial District (KLIFD) valued at RM26 billion, commencing in 2011.
* The Mass Rapid Transit (MRT) in Greater KL (Klang Valley) will be implemented beginning 2011. This project, with an estimated private investment of RM40 billion, is expected to be fully completed by 2020.
Upon completion, the utilisation rate of public transport is expected to increase to at least 40%.
* The Malaysian Rubber Board land in Sungai Buloh of 2,680 acres (1,085ha) will be developed at RM10 billion and is expected to be completed by 2025. The Employees Provident Fund (EPF) will undertake mixed development comprising affordable houses as well as commercial, industrial and infrastructure facilities.
* Another landmark development is by Permodalan Nasional Berhad — 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.
Capital markets
* The Securities Commission (SC) will offer three new stock broking licences to eligible local, foreign or joint-venture companies to increase retail market participation.
* The SC will increase the number of Proprietary Day Traders operating in the market.
* 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.
* Malaysian Technology Development Corporation (MTDC) will be provided a start-up fund of RM100 million 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 bumiputera ownership of prime commercial properties in major towns. A Bumiputera Property Trust Scheme to be launched this year with a size of RM1 billion to enable bumiputera 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 allocated 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.
* RM146 million allocated to support oil and gas (O&G) sector. Among the projects to be implemented are the oil field services and equipment centre in Johor with private investment of RM6 billion over 10 years. To meet the increase in gas demand by industries, Petronas to implement regasification project with RM3 billion investment in Malacca, which will be operational in 2012.
Green technology
* Several incentives to promote green technology
-- Pioneer status and investment tax allowance for the generation of energy from renewable sources and energy efficiency activities be extended until Dec 31, 2015
-- Import duty and sales tax exemption on equipment for the generation of energy from renewable sources and energy efficiency be extended until Dec 31, 2012
-- Tax exemption on the income derived from trading of Certified Emission Reductions certificate be extended until year of assessment 2012
-- Full import duty and 50% excise duty exemption was granted to franchise holders of hybrid cars as well as hybrid an electric motorcycles up to Dec 31 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.
Agriculture
* Govt to implement 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.
* Govt to also implement Feed in Tariff (FiT) mechanism under the Renewable Energy (RE) Act, to allow electricity generated from RE by individuals and independent providers to be sold to electricity utility companies.
* Govt allocates RM3.8 billion in 2011 to increase productivity and generate higher returns in the agriculture sector. For this, the following measures will be taken:
-- Develop large-scale integrated aquaculture zones in Pitas, Sungai Telaga and Sungai Padas in Sabah as well as Batang Ai and Tanjung Manis in Sarawak that meet standards as well as produce high quality products, with RM25 million allocation
-- Upgrade drainage and irrigation system as well as use high-quality paddy seeds to enhance productivity in Muda Agricultural Development Area (MADA), Kedah and other areas – RM235 million allocated
-- Encourage farmers participation in high-value agriculture activities such as swiftlet nests, aquaculture, seaweeds, ornamental fish herbs and spices with RM135 million allocation for basic infrastructure
-- Foster partnership between small-scale fruit and vegetable farmers with anchor companies through RM80 million allocation
-- Improve the Agriculture College in Kubang Pasu, Kedah by constructing a diagnostic lab with RM70 million allocation
-- Build an International Centre for Crops of the Future in Semenyih, Selangor with RM157 million allocation
-- Extend income tax deduction incentive for investors and income tax exemption for companies undertaking food production activities for another 5 years until 2015
Tourism
* Provide infrastructure facilities with RM85 million allocation for hotels and resorts in remote areas with the potential to attract tourists
* Construct several shaded walkways in the KLCC-Bukit Bintang vicinity with RM50 million allocation
* Restructure the Department of Civil Aviation to Civil Aviation Authority
* Nexus Karambunai of Sabah to develop RM3 billion integrated eco-nature resort, the first in the world, starting next year. To support the tourism industry, the government will allocate RM100 million
* 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 are apparel, handbags, shoes, shampoo, suits, children's apparel, wallets, hair colourants, golf balls, imitation jewellery, talcum powder, curtains, table cloth, blankets, bed sheets, shirt, undergarments, lingerie, nightwear, perfumes and mosquito netting
Palm oil industry
* Enhance productivity by encouraging replanting activity using high quality new clones, through a fund of RM297 million
* RM127 million allocated to support domestic oleo derivatives companies as well as RM23.3 million to expand downstream palm oil industries including production of vitamins
ICT
* MY Creative Content Programme to be implemented to encourage the development of local content creation, hosting local content and unlocking new channels for content. Allocation: RM119 million
* Govt to extend the investment allowance period 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.
Business services industry
* The Sultan Abdul Aziz Shah Airport, Subang will be developed as a centre for maintenance and overhaul of aircrafts as well as provide specific training to develop experts in this field
* Govt to allocate RM91 million for capacity building in the maintenance, repair and overhaul (MRO) services industry, aerospace and aeronautical engineering training programmes as well as promotion of business outsourcing services
Corridor and regional development
* Govt allocates RM850 million for infrastructure support for corridor and regional development
* For Iskandar Malaysia, RM339 million allocated, including for the construction of highways, development of housing areas as well as providing and improving public transportation services. The amount of investment committed by the private sector as at June 2010 was RM62 billion, surpassing the targeted RM47 billion. Total actual investment up to June 2010 was RM25 billion. The Newcastle University Medicine Malaysia and Chelsea Factory Outlet are expected to be completed in 2011 while Legoland and Marlborough College in 2012.
* The Northern Corridor Economic Region (NCER) is allocated RM133 million, which includes the development of an Agricultural Products Processing Centre, Tourism Infrastructure and a Biotechnology Incubator Centre.
* The East Coast Economic Region (ECER) is allocated RM178 million for projects, including Industrial Parks, Water Treatment Plants, development of tourist areas as well as redevelopment of former Pahang Tenggara Development Authority and Jengka Region Development Authority areas.
* For Sarawak Corridor of Renewable Energy (SCORE), RM93 million allocated for facilities, including telecommunication, water supplies, airport and roads as well as halal food industrial parks.
* For the Sabah Development Corridor, RM110 million allocated, among others, for palm oil industry cluster projects, agro-industrial precinct and integrated farming centre.
Promoting RDC
* Research, development and commercialisation (R&D&C) activities allocated RM411 million in 2011
* Special Innovation Unit (UNIK) under the Prime Minister's Department as a one-stop centre to formulate policies and strategies for a conducive ecosystem to drive innovation.
* An Act will be formulated to enable UNIK to commercialise R&D findings by universities and research institutions. For 2011, a sum of RM71 million is allocated for UNIK.
Reforming Insolvency Law
* New Insolvency Act will 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.
Advancing creative industry
* RM200 million allocated to purchase creative products such as high quality locally-produced films, dramas and documentaries.
Service tax
* Service tax be increased to 6% from 5%. Service tax be imposed on paid television broadcasting
2. Intensifying human capital development
* RM29.3 billion allocated for Ministry of Education, RM10.2 billion for Ministry of Higher Education and RM627 million for Ministry of Human Resource to restructure and strengthen education and training
* Talent Corporation (Talent Corp) 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
Education
* RM6.4 billion allocated for Education Ministry 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
* Govt will increase pre-school enrolment rate to 72% by end-2011 through an additional 1,700 classes and appoint 800 pre-school graduate teachers.
* RM111 million for Permata programme, including the construction of the second phase of Sekolah Permata Pintar School Complex, 32 Permata Children Centres (PAPN) and financing operations of 52 completed PAPNs and continuing Permata Pintar, Seni, Insan and Remaja Programmes.
* RM250 million for development expenditure to religious schools, Chinese-type schools, Tamil national schools, missionary schools and government-assisted schools
* Primary and secondary rakyat religious schools allocated RM95 million
* RM576 million allocated in the form of scholarships for teachers and instructors wishing to further their studies.
* RM213 million allocated to enhance proficiency in Bahasa Malaysia, strengthen the English Language and streamline the Standard Curriculum for Primary Schools (KSSR). Govt to recruit 375 native-speaking teachers including from the UK and Australia to further enhance teaching of English
* Raise the number of PhD qualified academic staff to 75% in research universities and to 60% in other public institutions of higher learning with RM20 million allocation of RM20 million
* Lecturers can be considered for promotion to the highest grade of Staff III, II and I as well as conferred Premier Professors without holding administrative positions.
Training and skills programmes
* RM60 million to further intensify the Industrial Skill Enhancement Programme in State Skills Development Training Centres. This programme will enhance skills of engineering graduates and technical employees in line with market requirements.
* RM220 million allocated to ensure graduates from other fields are able to enhance their competence and employability. These include the Professional Certification Programme, Sports Development, Entrepreneurship Development and Graduate Employability Management Scheme.
* RM50 million allocated to Multimedia Development Corporation (MDeC) to train graduates in ICT to enhance their employability and to meet the demand of the ICT industry.
* RM474 million provided to enhance productivity and skills of non-graduates, including school leavers, youths and workers as there is high demand for skilled workforce in technical fields.
* 1Malaysia Training Programme, which will commence in January 2011 with RM500 million allocation for upskilling and reskilling of workforce.
* The training programme comprises three components
-- RM200 million allocated to conduct part-time training in the evenings and weekends in selected training centres nationwide. It will be conducted by Community Colleges, National Youth Training Institutes, Giat Mara Centres and Industrial Training Institutes, utilising the existing facilities. Among courses to be offered in the evenings include language classes in Bahasa Melayu, Mandarin, Tamil, English and Arabic as well as music classes. During the weekends, skills and technical courses will be conducted, including baking, tailoring, spa therapy, mechanical, electrical and welding.
-- RM200 million from the Human Resource Development Fund to be used by companies to fund specific training programmes for their employees.
-- Ministry of Human Resource to provide RM100 million to enable employees to enhance skills in various technical fields.
Enhancing productivity
* National Wage Consultation Council to be set up as the main platform for wage determination. It comprises representatives from employers, trade unions, non-unionised employees, government agencies, academia, NGOs and individuals. The Ministry of Human Resource will be the Secretariat for this Council.
* 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.
* Govt will continue to reduce the number of foreign workers by increasing in stages the levy according to sector. It is also mandatory for employers to procure health insurance for their foreign workers.
* To enhance women's participation in entrepreneurship, the govt allocates RM30 million to introduce the Single Mother Skill Incubator Programme and the Prime Entrepreneur and Women Activist Award in conjunction with Women's Day commencing 2011.
* A pioneer Small Office Home Office programme to be implemented to train disabled women in various skills for a period of three months.
* Govt to provide and re-brand 40 1Malaysia Taska, managed by the Department of Social Welfare to assist women to obtain quality childcare and early education for their children.
* Govt to allow flexibility to self-determine fully-paid maternity leave, not exceeding 90 days from the current 60 days. This facility is subject to a total of 300 days of maternity leave throughout the tenure of service.
Sports
* For sports development and management, RM365 million is allocated to the Ministry of Youth and Sports. Govt to establish a Football Academy in Pahang with an allocation of RM20 million to produce quality and highly skilled football players.
3. Enhancing quality of life of Malaysians
Assisting the less fortunate
* Govt to allocate RM1.2 billion to the Ministry of Women, Family and Community Development to carry out various welfare and community programmes:
-- Welfare assistance for senior citizens with RM166 million allocation. This group is estimated to increase to more than 15% of the total population by 2030
-- Children's assistance programme with RM121 million allocation to enable them to receive quality childcare and early education. This programme will benefit 97,000 children
-- Assistance programme to benefit 80,000 disabled individuals with RM218 million allocation
-- Excise duty exemption be increased from 50% to 100% on national vehicles purchased by the disabled
-- Construction of an intervention centre for the homeless by providing employment opportunities, housing facilities and counselling
* Govt to continue rebate on electricity bill payment for monthly consumption of below RM20 with RM150 million allocation to ease the burden of the low-income group.
* Existing tax relief of up to a maximum of RM5,000 be extended to cover other expenses such as day care centre, cost incurred to employ caretakers for parents and other daily needs such as diapers.
House ownership
* RM568 million provided to build 300 units under Projek Bantuan Perumahan Bandar, 79,000 units under Program Perumahan Rakyat and 8,000 units under Projek Bantuan Rumah Sewa.
* To assist estate workers to own houses, the Government will provide Skim Pembiayaan Perumahan Kos Rendah with RM50 million allocation, managed by Bank Simpanan Nasional. The scheme is open to all Malaysian permanent estate workers to assist them to obtain housing loans with a maximum of RM60,000 for the purchase of low-cost houses 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 Berhad 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. In other words, the house buyers will obtain a 100% loan without having to pay the 10% down payment.
* 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.
Rural population
* RM6.9 billion allocated to implement basic infrastructure such as water and electricity supply as well as rural roads. Among the main projects to be implemented are:
-- Build and upgrade rural roads in Sabah and Sarawak with RM2.1 billion allocation and RM696 million in Peninsular Malaysia
-- Provide water and electricity supply in rural areas of Sabah with RM1.5 billion allocation, Sarawak RM1.2 billion and Peninsular Malaysia RM556 million
-- Provide comfortable houses for the poor and hardcore poor in rural areas with RM300 million allocation. This programme will involve the construction and repair of 12,000 houses nationwide, particularly in Sabah and Sarawak
-- Provide Unit Khas Bergerak Jabatan Pendaftaran Negara to facilitate rakyat in the interiors of Sabah, Sarawak and Peninsular, to register for citizenship
Easing consumers' burden
* RM974 million allocated as price subsidy for paddy, fertilisers and paddy seeds and RM230 million for production incentives and increasing paddy yield, RM170 million in incentives for fishermen and boat owners and workers.
* To standardise the prices, Distribution of Essential Goods Programme for goods such as rice, cooking oil, sugar, flour, gas, petrol and diesel in 2010 to be carried out with RM100 million allocation. For 2011, RM200 million allocated for the programme.
* "1Malaysia Smart Consumer" portal to help the rakyat keep abreast with price movements of goods in almost 7,000 business premises nationwide. Through this portal, consumers have the option to purchase goods at competitive prices. Consumers can also utilise short messaging services (SMS) to obtain latest information on prices of goods.
* Retail Shop Transformation Programme (TUKAR), Automotive Workshop and Community Market projects to upgrade and modernise facilities with an allocation of RM73 million.
* Govt to continue Projek Penyelenggaraan Aset Awam or PIA/PIAS with RM500 million allocation for repairing and upgrading of public amenities, drains, drainages, small bridges and rewiring as well as construction of agriculture and kampung roads. The implementation of these small projects will assist Class F contractors nationwide.
Community leaders
* Govt to increase the monthly allowance for the chairman of Jawatankuasa Kemajuan dan Keselamatan Kampung (JKKK) and Persekutuan (JKKP), Tok Batin, chairman of JKKK Orang Asli, chairman of Kampung Baru to RM800 from RM450.
* Allowance extended to the Ketua Kampung Baru Rangkaian and Ketua Kampung Bagan. Meeting attendance allowance to all committee members raised to RM50 from RM30.
* Effective January 2011, the monthly allowance of Imam will be increased to RM750 from RM450, while the monthly allowance for KAFA teachers to RM800 from RM500.
Orang Asli and pribumi
* RM100 million allocated to implement various programmes, including resolving Orang Asli land rights and border settlement issues as well as formulating a new development model for Orang Asli.
* Jabatan Hal Ehwal Orang Asli will be restructured and strengthened as Jabatan Kemajuan Orang Asli.
Transport, public health and security
* Toll rates in four highways owned by PLUS Expressway Berhad will not be raised for the next five years, effective immediately.
* RM15.2 billion allocated for new hospitals, increase the number of doctors and nurses, and for medicines and equipment.
* Govt to allocate 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.
Non-governmental organisations
* RM70 million for programmes and activities involving selected NGOs to strengthen family institution and addressing social ills such as baby dumping, "mat rempit" and gangsterism.
Environment
* RM1.9 billion to finance environmental preservation projects, including implementing the River of Life Programme and greening of Kuala Lumpur.
* The govt will also undertake efforts to preserve marine sources and coastal areas including Pantai Siring in Melaka, Pantai Sabak in Kelantan, Teluk Lipat in Terengganu and Rompin in Pahang.
Corporate social responsibility (CSR)
* Khazanah Nasional Berhad (Khazanah) in collaboration with the Ministry of Education, will establish 10 Trust Schools which will 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 be utilised to instil the 1Malaysia spirit.
* 1MDB to implement 1Malaysia Mobile Clinics with four buses as mobile clinics in collaboration with the Ministry of Health.
4. Strengthening public service delivery
Government agencies
* The govt will ease private sector dealings with its agencies. Towards this, the MyCoID Gateway initiative utilising the Companies Commission of Malaysia's single reference number has been implemented. This initiative will be extended to other ministries and agencies.
* A point system to facilitate applications for permanent resident status (PR) to be introduced. The application for PR may be submitted after 5 years of residence compared with 10 years previously.
* To expedite the process of property registration, the Stamp Act 1949 was amended to enable the Valuation and Property Services Department assess properties after the payment of stamp duty to the Inland Revenue Board. This improvement will reduce the property registration process from 30 days to one day.
Civil servants
* Competency Level Assessment or PTK to be abolished and replaced with a more suitable evaluation system by June 2011
* Reduce the burden of civil servants in coping with schooling expenses by providing a Special Financial Assistance amounting to RM500 to all from Grade 54 and below, including contract officers and retirees. The payment will be made in December 2010.
* Increase the rate for Funeral Arrangement Assistance to RM3,000 from the current RM1,000. This assistance is also extended to retired civil servants
* Extend the services of Pegawai Khidmat Singkat (PKS) for an additional one year from December 2010. However, ministries and agencies are not allowed to increase the number of PKS.
* Housing loans for civil servants allowed for the purchase of properties from parents, children and siblings
* Housing loan amoung raised to RM20,000 from RM10,000 for additional works on low-cost houses for Support Group II.
* Maximum loan eligibility raised to RM450,000 from RM360,000 currently.
* Improvements to housing loans to be effective Jan 1, 2011.
2011 Budget allocation
* Allocation of RM212 billion for the 2011 Budget is 2.8% higher than the allocation for 2010. Of this, RM162.8 billion is for operating expenditure and RM49.2 billion for development expenditure.
* Under operating expenditure, RM45.6 billion for emoluments, RM28.2 billion for supplies and services, RM86.4 billion to fixed charges and grants, and RM1.4 billion for purchase of assets and RM1.2 billion for other expenditures.
* As for development expenditure, RM28.3 billion for the economic sector for infrastructure, industrial, agricultural and rural development.
* RM15.5 billion allocated to the social sector, including education and training, health, welfare, housing and community development.
* RM4.4 billion allocated for development of the security sector, RM955 million for general administration and RM2 billion contingencies.
* Federal government revenue collection is estimated to increase 2.3% to RM165.8 billion in 2011, compared with RM162.1 billion in 2010.
* Taking into account the estimated revenue and expenditure, the deficit for 2011 is expected to further decline to 5.4% of GDP, compared with 5.6% in 2010.
