Malaysia Budget 2012

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Malaysia Budget 2012

Malaysia Prime Minister Datuk Seri Najib Tun Razak will deliver the nation’s budget spending plan for 2012 on 7 October 2011 4pm.

The following are the areas where the Malaysian government intends to spend on for national growth and development:

  1. Budget Allocation
    1. RM232.8 billion in total to be used for spending by the Government, where it is split into RM181.6 billion for management and RM51.2 billion for development.
    2. RM29.8 billion will be invested into infrastructure, industrial and rural development.
    3. RM13.6 billion has been planned for the education and training, welfare, housing and community development.
    4. RM978 million will be spent to encourage growth in five regional sectors.
  2. Infrastructure
    1. RM98.4 billion will be allocated evenly between 2012 & 2013.
    2. Government will embark on major projects such as the East Coast Highway from Jabor to Terrenganu and road upgrades from Kota Marudu to Ranau.
  3. Finance
    1. Non-ringgit sukuk issuance and transactions will continue to be exempted from income tax for another 3 years.
    2. A RM2 billion shariah-compliant SME Financing Fund will be created and managed by selected Islamic banks.
    3. Maximum of RM1 million loans will be available for entrepreneurs via a RM100mil SME Revitalisation Fund.
  4. Property
    1. Properties purchased and then sold after 5 years will not be subjected to real property gains tax.
    2. Residential property price limit for first-time buyers earning less than RM3,000 per month is raised from RM220,000 to RM400,000.
    3. PR1MA will be the sole agency to develop affordable quality housing for the middle-income group.
  5. Education
    1. Primary and secondary school education fees will be abolished.
    2. RM200 book voucher to be handed out to Malaysian students in all private and public institutions of higher learning.
    3. Government to spend RM50.2 billion in the education sector to develop creative and innovative people.
    4. RM1 billion will be used for construction, improvement and maintenance of schools.
    5. Private schools registered with the Education Ministry will be given incentives, such as the Investment Tax Allowance.
    6. To reward innovative student inventions, RM100 million will be provided for the C1PTA 1Malaysia Award.
  6. Businesses and Industries
    1. Of the RM20 billion PPP Facilitation Fund, RM18 billion will be used for high impact projects, and the remaining RM2 billion for bumiputera entrepreneurs.
    2. As part of the National Agro-Food Policy 2011-2020, RM1.1 billion will be spent on the development of the agriculture sector.
    3. A Commercialisation Innovation Fund worth RM500 million will be used to help SMEs commercialize research products.
  7. Transport
    1. Hybrid and electric cars will continue to enjoy import duty and excise exemption until 2013.
    2. Government will identify areas around MRT, LRT and other public transport systems that will be have housing projects developed by PR1MA.
  8. Civil Service
    1. Government pensioners will receive an additional 0.5 month salary bonus subject to a minimum of RM500 and assistance sum of RM500, both of which will commence in December 2011.
    2. Civil servants’ compulsory retirement age will be raised from 58 years old to 60.
  9. Tax Exemptions
    1. Individuals in private sector earning RM5000 and below will have their employers’ EPF contribution increased from 12% to 13%.
    2. Contributions made to educational institutions and all places of worship will tax exempt.
    3. Families with monthly household income of RM3,000 or less will be given RM500 once.
  10. Rural Development
    1. Government will allocated RM5 billion to develop rural infrastructure, such as the RM1.8 billion Rural Road Programme & Village-Link Road Project.
    2. The Orang Asli will be provided RM90 million of basic necessities, including the clean water supply project. Orang Asli affected by the landslides at Sungai Ruil will be given RM20 million to relocate their homes.
    3. RM500 million will be spent to supply clean water to the rural community in Sabah.
    4. Felda GVH will be listed on Bursa Malaysia by mid-2012 for the company to become a global conglomerate. Felda settlers will benefit from the financial liberation.
  11. Healthcare
    1. Government will spend RM15 billion for operating expenses and RM1.8 bllion on development expenses.
    2. Free Human Papilloma Virus immunisation will be launched nationwide to fight cervical cancer.
    3. Government will upgrade and build more hospitals, upgrade 81 rural health clinics, and build 50 more 1Malaysia clinics.
  12. Tourism
    1. The Langkawi Five Year Tourism Development Master Plan worth RM420 million will be launched.

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Maxis Communications To Relist on the KLCI

After two years of privatization since July 2007, Malaysia’s leading mobile telecommunications corporation Maxis Communications Berhad has announced that it will relist on the local stock exchange and launch an IPO with an offering of 2.25 billion shares.

The announcement was made after market trading hours on Friday 18 September 2009, which also indicated that 175M shares will be offered to the public.

The company and its various subsidiaries recorded a total revenue of RM6.75B for FY06, RM7.69B for FY07, RMRM8.45B for FY08, and RM4.24B for H109. Mobile subscriptions have grown from 8.1M by end of 2006 to 11.4M by June 2009, representing a compound annual growth rate (CAGR) of 18%.

Non-voice revenue, which included services such as SMS, content downloads and wireless broadband, increased from RM1.51B in 2006 to RM2.28 in 2008 at CGAR of 23%. Wireless broadband subscriptions increased 35 times to 140K by end of 2008.

Source: Maxis to offer 2.25b shares under IPO


Refinance Your Home Loan Regularly in Malaysia

If you’re a home owner with a bank loan in your property in Malaysia, have you checked if your current rate is still competitive? The loan market in Malaysia has been very healthy and changes quite significantly every six months.

Although the base lending rate (BLR) has steadily increased over the past few quarters, banks are coming up with new packages that are even attractive to current loaners. Some offer 1 to 3 percent interest rates for the first 1 to 5 years, while others continue to promote consistently lower than BLR rates, as low as BLR -2 percent.

Refinance Your Home LoanRefinancing a home loan is even tangible for those that are less than the agreed period, typically five years, where termination comes with a monetary penalty. Competition has resulted in competing banks offering positive savings even after paying the penalty to your current bank.

A newer trend in home loans or mortgage loans is in attaching a cash deposit account that is linked to the loan. This encourages you to deposit your savings and income to the account, which is then used by the bank as collateral to reduce the daily interest charged on the balance of your home loan. As long as you maintain and/or add more funds into the account, the home loan interest is significantly reduced on a daily basis. In the end, you can effectively reduce your loan tenure by a few years! By the way, you also have the flexibility to withdraw from the account, just like your standard expenses account.

Review and refinance your home loan every few years because such products from the banks change often. Just like the credit business, debts are big dollar business for banks and financial institutions.

My current bank was not particularly keen on keeping customers when I called to enquire if I can enjoy the better terms on newer loan packages that it was offering. When they said they could not help me at all, I decided to look elsewhere for better rates. Another lesson I learnt is that the international banks are more aggressive in their offerings compared to the local banks, a good sign and wake-up call for the laggard banks here.

A good site to learn more on how you can save interests on home loans and consolidate debts to be more financially free, I recommend The site offers tips and links to loan products that may just save you years of interest, the number one enemy (and sometimes friend) to your personal wealth.

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