Quarterly Market Outlook
A Budget Tailored For The People
All eyes and ears were on Budget 2020, as this was the second budget to be tabled by the new Malaysian Government. A consumer survey was conducted several weeks before and results showed that a majority of Malaysians wanted taxes to be lowered and subsidies to be increased. However, Prime Minister Tun Dr Mahathir Mohamad has cautioned Malaysians that not all the demands of the people will be met, prior to the tabling of Budget 2020.
Let us take a closer look at what was announced and how it affects us.
Healthcare
Key takeaway
This is the first time that the Government has introduced incentives for fertility treatments – a huge step up in healthcare that benefits families who planned to have children through in-vitro fertilisation. Furthermore, Malaysia now joins many developed countries in providing pneumococcal vaccination for children. Several existing healthcare policies were also upgraded, such as the MySalam Takaful scheme and the Peka B40 scheme, while additional funds have been allocated to build new Government hospitals, clinics and refurbish existing facilities.
Public Transport
Key takeaway
Malaysians who regularly commute to selected cities for work will be able to enjoy better public transportation in the near future with the acquisition of 500 electric buses, which will reduce carbon footprint in these cities and lower our dependence on fossil fuels. Travelling to Singapore will also be a more pleasant experience in the coming years, with Rapid Transit System given the go-ahead and the upgrades planned for the Causeway and the Second Link Highway.
Rural Development
Key takeaway
Lack of water, electricity and accessibility at remote housing estates have always been a problem in Sabah and Sarawak. 2020 will see a substantial portion of the budget being used to develop the rural areas, particularly in providing water supply and power supply to villages, as well as the construction of better roads.
Financial Aid
Key takeaway
Grants will be allocated to further transform the Indian and the Orang Asli communities. To address the poverty level, especially among senior citizens and the disabled, the Government will be providing financial assistance to ease their living and medical expenses. Housewives will also receive additional aid from the contributions made by their husbands.
Fuel Subsidy
i. Cars below 1,600cc
ii. Cars over 1,600cc that are over 10 years old
iii. Motorcycles below 150cc
iv. Motorcycles over 150cc that are over 7 years old
Key takeaway
The Government has spent billions on fuel subsidies over the years. In order to create a win-win situation, the price of RON95 will be floated and subsidies under the revised Petrol Subsidy Programme will only be given should the price of RON95 pass the RM2.08 mark.
Highway and Tolls
Key takeaway
Toll rates have been gradually increasing since its introduction in 1966 and the Government has identified this as a financial burden that affects the living expenses of the general public. As such, necessary steps have been taken to reduce the toll rates for all PLUS highways and the Second Penang Bridge, with additional discounts on certain hours.
Housing
Key takeaway
Property prices in recent years have escalated tremendously due to intense speculation. As a result, young adults who plan to start a family are unable to purchase their first home. The Government plans to remedy that by introducing a new home financing scheme and revise the terms on foreign ownership of property to revitalise the housing sector. In addition, 5,000 homes will made available under the Bandar Malaysia project for those who are looking to own a property at an affordable price.
Employment
Key takeaway
Several measures were taken to reduce the local unemployment rate and boost overall productivity in the workforce, with women benefiting the most from these new incentives. The minimum wage in major cities and maternity leave have been increased to modernise the labour market, while employers who hire out-of-work graduates, women and local workers will be incentivised.
Education
Key takeaway
The Education Ministry will receive a huge portion from Budget 2020, with most of the funds being used for the maintenance of schools and the upgrading of school facilities with digital technology, such as laptop computers, mobile teaching devices and Wi-Fi connectivity.
Furthermore, the allowance for KAFA teachers and vocational students will be increased to improve their standard of living, while parents who send their child to a registered nursery or kindergarten will get to enjoy an improved individual tax relief to counter the high cost of pre-schoolling.
Sports
Key takeaway
Young Malaysian women who are talented in sports will soon be able to enjoy better benefits from the Government. The rapid growth of e-Sports has astound the world and is now a worldwide sporting event, where teams of gamers compete in local and international video gaming tournaments. Seeing its huge potential in Malaysia, the Government has decided to provide additional financial support to develop e-Sports in the country, which would further encourage youths to pursue a career in this industry.
Digitisation
Key takeaway
Digital payments started out as a trend in Malaysia but is now fast becoming a norm. In-line with the nationwide ‘Digital Transformation’ initiative, the Government would like to encourage us to adopt digital payments as our primary mode of transaction. As such, a one-off e-wallet credit of RM30 will be given to everyone aged 18 and above who meet the criteria.
Summary
Malaysians can now breathe a sigh of relief, knowing that the Government has taken many other proactive measures in an attempt to lower the cost of living and ease the financial burden of the general public. The Government has clearly tailored Budget 2020 to benefit the common folk; working-class Malaysians who belong in the low-income to medium-income group. We hope that the information provided here will help you to better manage your personal finances for the upcoming year.
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