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Friday, November 1, 2013

Budgeting for people's wellbeing

Publication: NST
Date of publication: Oct 30, 2013
Section heading: Main Section
Page number: 015
Byline / Author: By Fauziah Ismail

LAST Friday, Prime Minister Datuk Seri Najib Razak tabled the 2014 Budget at Parliament. Superlatives were used to describe it. It was called a "milestone" budget by one newspaper, while another said it was a "realistic" budget. One foreign wire said Najib was "wisely cautious" in making some of the proposals, while an international ratings firm found there were "potentially constructive steps" in the 2014 Budget.

Then, there are the detractors. Those in the opposition were against some of the budget proposals, especially the six per cent goods and services tax (GST) which will be imposed on April 1, 2015. One opposition leader was said to be planning a protest against it.

There is no way the budget can please every Malaysian.

It was the poet John Lydgate who had a famous saying, later adapted by Abraham Lincoln, the 16th president of the United States: "You can please some of the people some of the time, all of the people some of the time, some of the people all of the time, but you can never please all of the people all of the time."

Some may find that there are tax reliefs that provide more money for them. Others would feel the pinch in their pockets through taxes imposed. Then there are those who do not appear to benefit at all.

But for as long as it meets the expectations of a majority of the population, then it has achieved its purpose.

Overall, the budget showed that the government put the interests and wellbeing of the people first.

Najib, who tabled his fifth budget since assuming the finance portfolio in 2009, acknowledged in his budget speech that "there may be some weaknesses in our administration in the past. However, we have always placed the rakyat's interest above all else. With the solid support of the rakyat, we will continue to improve".

The budget casts a wider net of beneficiaries, especially for the low- and middle-income groups.

The budget was formulated to "ensure the economy continues to expand at a strong pace and to reduce the fiscal deficit, with the overall objective of prospering the nation and promoting the wellbeing of the rakyat".

Najib's approach is to first, invigorate economic activities; second, strengthen fiscal management; third, inculcate human capital excellence; fourth, intensify urban and rural development; and, fifth, ensure the wellbeing of the rakyat. But one pertinent point of the budget that many overlooked was that the government also listens to the rakyat. Najib had incorporated in his 52-page speech some of the suggestions that the public gave through his 1Malaysia blog. He had, sometime at the end of August to early September, asked the public to send in suggestions for the budget.

Some of the proposals on 1Malaysia People's Aid (BR1M) came from the rakyat, especially on extending it to households with a monthly income of RM4,000. Najib proposed that they be given BR1M assistance of RM450 to alleviate the rising cost of living.

They will also enjoy the RM50 contribution to Group Takaful Rakyat 1Malaysia (i-BR1M), which will provide protection of up to RM30,000 in the event of death or permanent disability.

He also listened to the plight of middle-income earners with regards to house ownership and announced a slew of strategies, including the Private Affordable Ownership Housing Scheme (MyHome) to encourage the private sector to build more low- and medium-cost houses. The scheme provides a subsidy of RM30,000 to private developers for each unit built.

There were also suggestions on healthcare, one of which was on dialysis. To this, Najib announced the provision of free treatment kits, called Continuous Ambulatory Peritoneal Dialysis, where 1,000 patients can be treated in their own homes. There was also a call for abolishing the sugar subsidy, which Najib also incorporated in the budget. With immediate effect, the government will abolish the sugar subsidy of 34 sen.

According to the Domestic Trade, Cooperatives and Consumer Ministry, the government can save RM324 million next year from this move.

On the public's suggestion for a Bantuan 1Malaysia scheme for small businesses, Najib announced the creation of a Night Market Traders Entrepreneur Scheme, with an allocation of RM100 million under Bank Simpanan Nasional. The soft loan carries a four per cent interest rate, with maximum loans of up to RM30,000. The facility is to cover business costs, such as revolving capital, site rental, raw materials and business equipment.

As for middle-income earners who felt that they had been left out of past budgets, Najib proposed tax relief, especially for those earning less than RM8,000.

They form the largest number of taxpayers who are burdened by increasing cost of living. There are other income tax reliefs for the group, too.

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