RM60 billion stimulus for next two years

[quote=“Bernama”]KUALA LUMPUR, March 10 (Bernama) – The government today unveiled its second economic stimulus package totalling RM60 billion, comprising initiatives and ideas to invigorate vital sectors to maintain the people’s welfare and prosperity in the face of the global economic downturn.

Deputy Prime Minister and Finance Minister Datuk Seri Najib Tun Razak, when tabling the package in the Dewan Rakyat, said it would be implemented over two years – 2009 and 2010 – and would have four thrusts.

These were reducing unemployment and increasing employment opportunities; easing the burden of the people, in particular the vulnerable groups; assisting the private sector in facing the crisis; and building capacity for the future, he said.

Najib said the government would continue to implement appropriate measures to strengthen the confidence of the people and ease the burden, particularly of the vulnerable groups.

"In view of the deteriorating global economy, the Second Stimulus Package is significantly larger and more comprehensive, encompassing various economic sectors and target groups.

“This includes workers, consumers, investors, small and medium businesses, exporters and unemployed graduates,” he said.

Najib, while being open about the severity of the global economic prospects, said he was confident that Malaysia would be able to face this difficult and challenging environment with the spirit of unity among the people, just as the country had successfully overcome several crises in the past.

He said Malaysia could not depend on orthodox economic recovery policies, but must be bold in formulating innovative approaches to deal with the crisis.

"There have been increasing calls by the people for the government and the opposition to set aside political differences and focus on the economy.

“I personally acknowledge these calls and, therefore, urge all parties, from the government and opposition to focus on the economy and the people,” he said, inviting the opposition to work together in the effort.

“There are high hopes, when faced with an economic storm, for us to always work together and think of doing the best for the people,” he said.

Najib announced the package, regarded as a mini budget, when tabling the Supplementary Supply Bill 2009 for second reading in the Dewan Rakyat.

On Nov 4 last year, the government announced the First Stimulus Package totalling RM7 billion which, according to Najib, was being actively implemented and RM6.5 billion of which had been channelled to projects.

The second package also gives special focus to the people of Sabah and Sarawak, particularly in the provision of infrastructure for which RM1.2 billion is to be allocated to increase economic activities.

Projects and programmes to be implemented in Sarawak include the expansion of the Sibu Airport, deepening works at Miri Port, repair and improvement of infrastructure damaged by floods and upgrading of schools.

In Sabah, the main programmes and projects to be implemented include the Kota Kinabalu Electricity Transmission System, upgrading of schools, roads and bridges, and resolving issues related to health services at the Queen Elizabeth Hospital.

In his speech of an hour and 15 minutes, Najib acknowledged that Malaysia now faced an extremely challenging economic environment in the context of the difficult global economic scenario, and said that the country’s Gross Domestic Product (GDP) was expected to be in the range of negative one per cent to one per cent for 2009.

Najib said that though developed countries had announced large economic stimulus packages exceeding US$3 trillion, including substantial amounts to bail out their financial institutions and large corporations, these measures had yet to restore consumer and investor confidence.

He said the United States, the world’s largest economy and trading nation, was expected to experience a contraction of 1.6 per cent, the United Kingdom 2.8 per cent, Japan 2.6 per cent, South Korea negative two per cent, Taiwan negative four per cent and Singapore negative 4.9 per cent.

“In fact, Singapore’s Minister Mentor (Lee Kuan Yew) envisaged that Singapore’s economy might contract 10 per cent this year,” he said.

Najib said Malaysia had to accept the fact that as a highly open economy it was likely to be impacted through declining exports in line with deteriorating world demand; sharp decline in the prices of commodity exports; decline in Foreign Direct Investment (FDI) in line with the global recession; and significant decline in Bursa Malaysia due to the global meltdown in equity markets.

To handle the unemployment situation, allocation would be channelled towards creating 163,000 training and placement opportunities in the public and private sectors, sponsoring the cost of Masters and doctorate studies as well as providing tax incentives to employers who engage retrenched workers.

Najib said the government would recruit 63,000 staff to fill vacancies, including 13,000 jobs for contract officers.

Other employment opportunities were recruitment of 4,000 officers on short-term service; 1,000 graduates as contract school teachers; 800 contract workers to strengthen the implementation of “Program Cari” under the Ministry of Women, Family and Community Development; 1,000 contract public health assistants; 4,500 contract enumerators in the Statistics Department for the population census; and 1,700 nurses and health support staff.

Najib said staff on the short-term service with a minimum qualification of Sijil Pelajaran Malaysia (SPM) would receive a monthly salary of RM1,200 while contract graduate teachers would be paid RM2,000.

Under the provision of training and creation of employment opportunities, on-the-job training would be provided for 1,000 unemployed graduates in the financial sector for two years while 2,000 training opportunities and job placements would be provided in government-linked companies (GLCs), particularly in the services sector such as outsourcing, aviation, utilities, health and creative multimedia.

Private employers who employ retrenched workers between today and Dec 31 2010 would be given double tax deduction on the amount of remuneration paid. The amount of remuneration eligible for this deduction shall not exceed RM10,000 per month and would be limited to 12 months remuneration per employee.

Najib also said that the government would undertake to finance tuition fees and research grants up to RM20,000 for every student pursuing doctorates locally. For students in the Masters programme, the government would provide up to RM10,000 per student.

A total of 500 places would be provided for studies at PhD level and 10,000 at Masters level in public institutions of higher learning as well as at Universiti Tenaga Nasional, Universiti Multimedia and Universiti Teknologi Petronas, he said.

The PROSPER Graduate Programme, implemented in June 2005 to assist Bumiputera graduates in retail or distributive business with training, financing and business advisory services, would have its scope expanded to include those with skills and technical certificates, enabling an additional 400 graduates to benefit from the programme, he said.

Najib said the government would also continue to take steps to reduce the dependence on foreign workers by doubling the levy on foreign workers for all sectors except construction, plantation and for domestic maids. The levy would be paid by the employers and not by the workers.

In this connection, he said, the issuance of licences to foreign labour recruitment agencies would be frozen and the conditions for recruitment of foreign workers by existing agencies would be tightened.

Najib said the government would ensure that the vulnerable groups benefited from the Social Safety Net Scheme, besides allocating RM27.9 billion for subsidies in 2009.

He also said that the stimulus package provided for an additional allocation of RM20 million to improve the facilities of daycare centres for the elderly, strengthen the management of women shelter homes and increase facilities for childcare centres.

To assist fishermen affected by disasters at sea, he said, the government would establish a Fishermen’s Welfare Fund with an initial allocation of RM2 million, which would be managed by the Fisheries Development Authority of Malaysia.

Najib said that to reduce the burden of retrenched workers, the government proposed raising from RM6,000 to RM10,000 the existing tax exemption given on retrenchment benefits for each completed year of service.

He said banking institutions had agreed to defer the repayment of housing loans of retrenched workers for one year.

To support the initiative of the banking institutions, he added, the government agreed that the interest income related to the deferment of housing loan repayments be taxed only when such interest was received.

The package also provides for RM1.95 billion to build and improve facilities in 752 schools, particularly in rural areas as well as Sabah and Sarawak.[/quote]

Click here for full text of Datuk Seri Najib Abdul Razak’s mini-Budget speech

some people will get big commissions

[quote=“Borneo Post”]That was how Deputy Chief Minister Datuk Patinggi Tan Sri Dr George Chan responded when asked for his comments of Sarawaks share of the RM60 billion second economic stimulus package announced yesterday.

Dr Chan said Sarawak should get at least 10 per cent out of the RM60 billion because that the state is vast and still lags behind most other Malaysian states in physical infrastructure.

The amount Sarawak and Sabah receive does not account for 10 per cent of the RM60 billion. Its not enough unless each state gets 10 per cent (RM6 billion), he said yesterday.

Dr Chan lamented that the RM1.2 billion allocated for both states for infrastructure and to spur economic activities was insufficient.

Sarawaks infrast-ructure development is far behind compared to Peninsular Malaysia. If the RM1.2 billion is for the states flood mitigation project alone, that is enough but not enough for overall infrastructure development in both states, he added.

Deputy Prime Minister and Finance Minister Datuk Seri Najib Tun Razak unveiled a RM60 billion second stimulus package to insulate the economy from slipping into recession in the Dewan Rakyat yesterday.

Among others, the RM1.2 billion allocated was for providing infrastructure and increasing economic activities in Sabah and Sarawak; RM5 billion working capital guarantee scheme for SMEs as loans; and to assist businesses, the government would exempt levy payments to the Human Resource Development Fund for six months for employers in the textile, electrical and electronic industries effective Feb 1.

The government would also reduce the levy payment rate from one per cent to 0.5 per cent for all employers for two years effective April 1 which would save employers RM390 million in business costs.

Meanwhile, Second Finance Minister and also Minister of Environment and Public Health Dato Sri Wong Soon Koh was pleased that the construction of the Sibu Airport Terminal could be finally implemented.

He said the terminal project was proposed while Tun Mahathir Mohammed was prime minister and he had agreed to carry out its implementation. When the present Prime Minister Datuk Seri Abdullah Ahmad Badawi took over the premiership, the project was also brought up and discussed.

Wong said when Najib assumed the post of Finance Minister, he (Wong) together with Housing and Local Government Deputy Minister Datuk Robert Lau and Lanang MP Datuk Tiong Thai King had visited Najib twice concerning the project.

We are very grateful that Najib has included this project in the second stimulus package, he said.

Wong who is Bawang Assan assemblyman said airports in major cities and towns like Kuching, Miri and Bintulu had already been completed and in use while Sibu was the only town without an airport terminal.

He was confident that construction works for the terminal would commence soon so that the infrastructure project could help to stimulate the local economy.

But the governments plan to provide training to the unemployed was met with scepticism from Kuching Chinese General Chamber of Commerce and Industry secretary-general Lee Khim Sin.

Lee, the assemblyman for Senadin, said he strongly believed that such trainings would not necessarily guarantee a person a job.

After training, can you still get a job if there are no jobs around? he pointed out.

He said he noticed that some proposals were short-term solutions rather than long-term such as contract workers in the civil service and temporary teachers.

He said the possibility of being retrenched or unemployed remained unanswered.

After these temporary projects are completed, can they still continue working? Its not wrong for the government to have trainings and short-term projects but it would be better if these were for long-term and aimed at increasing productivity, he said.

Lee said if the government sincerely wanted to help small and medium industries (SMIs) and enterprises (SMEs), it should cut down the red tapes at bank counters.

This was because many applications for government fundings often met with a dead end because of banks tight procedures and control over funds.[/quote]

someone is going to get really hurt…

i agree with the big commission and do you think 60billion is enough to save our economy?

i dun think its enough.

i agree with the big commission and do you think 60billion is enough to save our economy?

i dun think its enough.[/quote]

its enough if it doesn’t goes inside the pockets of certain ppl. the cost for administration in the new mini budget aka the 2nd stimulus plan is RM5billion! thats 4X bigger than what they gave for development in Sarawak, is it supposed to be that much? couldn’t they administer something without bearing that much of cost? or is Najib like saying “because i gave RM60 billion to the rakyat, RM5billion is for me and my cronies, u have any problem with that? i blow u wif my C4, harharhar”

i agree with the big commission and do you think 60billion is enough to save our economy?

i dun think its enough.[/quote]

its enough if it doesn’t goes inside the pockets of certain ppl. the cost for administration in the new mini budget aka the 2nd stimulus plan is RM5billion! thats 4X bigger than what they gave for development in Sarawak, is it supposed to be that much? couldn’t they administer something without bearing that much of cost? or is Najib like saying “because i gave RM60 billion to the rakyat, RM5billion is for me and my cronies, u have any problem with that? i blow u wif my C4, harharhar”[/quote]

half of the money goes to umno i think…5 billion to sarawak to do what? give the cm? give him more contract? lol. yeah all the goverment contract got something to do with the cronies of all these politicians. not really saving the country do you think so?

Huh… only RM1.2BILLION for Sarawak & Sabah. So, is it 50:50 or…
Its not enough for the development here. Wondering how much of this amount will go into the pocket of our ever greedy and selfish CM.

half of the money goes to umno i think…5 billion to sarawak to do what? give the cm? give him more contract? lol. yeah all the goverment contract got something to do with the cronies of all these politicians. not really saving the country do you think so?

  1. rm5 bil not for sarawakians lah, its for the administration cost for the stimulus plan, why is that much, couldnt it be lower? that is what i’m saying.

  2. if we do get rm6 bil, like what Dr.Chan suggested, it would benefit a lot if allocated to the right channel and not into the pockets. it would save a lot of ppl, although the money enters pvt companies such as Shin Yang, Samling, SEB, CMS, etc2… it would help create jobs. More contracts to companies and contractors, which help create jobs. Ppl will be able to pay loans and debts to the Banks and with that money, the Banks could approve more loans and money keeps on circulating in Sarawak and in the country provided that with zero inflation and buying less imported products, our economy will be sustainable through rough times. It would be saving the country if used properly.

Published: Wednesday March 11, 2009 MYT 2:28:00 PM

[size=150]IRB clarifies housing loans, retrenchment benefits[/size]

By ROYCE CHEAH

KUALA LUMPUR: The RM10,000 tax deduction for interest on housing loans will only be applicable for one property which is not being rented out.

The incentive, which was announced in the so-called mini budget on Tuesday, applies to Malaysian citizens who will live in that house, flat, apartment or condominium.

Inland Revenue Board (IRB) chief executive officer Datuk Hasmah Abdullah said the sales and purchase agreement for the house had to be executed between March 10 2009 and Dec 31 2010.
The tax deduction is given for three consecutive years from the first year the housing loan interest is paid, and is effective from the year of assessment 2009.

Also, if there are two or more individuals who are eligible for the tax deduction on the house, each individual is allowed a deduction which is proportionate to the interest they had paid, she told a press conference Wednesday.

Hasmah said this deduction however would not exceed RM10,000 in total.

She also elaborated on the other tax incentives that were announced and said retrenched workers would now benefit from a higher tax exemption on the monies they received from voluntary or mutual separation schemes.

Such workers are now eligible for a RM10,000 exemption per year of service as compared with RM6,000 before and this takes effect from July 1 last year.

She added that those who were retrenched from July 1 last year and had received the RM6,000 exemption could file an appeal at the IRB to get the RM10,000 exemption.

Hasmah said banks have also agreed to observe a moratorium on housing loans belonging to retrenched workers from March 10 2009 to March 9 2010.

This means banks would not have to pay tax on the interest accrued for the 12 months whereas the individual who takes the loan must be a citizen and would have to be retrenched from July 1 last year.

Hasmah said businesses also stood to benefit from the introduction of carrying back losses, renovation allowances and accelerated capital allowances for machinery.

For the carrying back of losses of up to RM100,000, Hasmah said it would apply for the year of assessment 2009 and 2010 and all businesses would be eligible including sole proprietors and partnerships.

As for the renovation allowance, it is limited to RM100,000 from March 10 this year till Dec 31 2010. There are 16 categories of renovations eligible for the allowance but consultation fees, fine art or antique items are not eligible.

Hasmah said accelerated capital allowances for machinery could now be claimed within two years instead of four.

** No Luck for the Existing house owner who are still servicing the housing loan… the new incentive only applicable for newly purchased house**

Inland Revenue Board (IRB) chief executive officer Datuk Hasmah Abdullah said the sales and purchase agreement for the house had to be executed between March 10 2009 and Dec 31 2010.
The tax deduction is given for three consecutive years from the first year the housing loan interest is paid, and is effective from the year of assessment 2009.

Some bank is offering 0% for the first year. So actually the newly stimulus budget is not functioning for the first year to those new purchaser with 0% interest for the 1st year.

Yup… no luck for existing house owners… Is it only for retrenched ppl from July 1st 08 that is given tax deduction? what type of funny policy is this? this is only for specific group of ppl. plus “sales and purchase agreement for the house had to be executed between March 10 2009 and Dec 31 2010”, do you think retrenched workers are going to buy houses? very funny~! if i was recently retrenched and looking for a job, getting a house is the last thing i have on my mind.

[quote=“The Malaysian Insider”]KUALA LUMPUR, March 11 Opposition Leader Datuk Seri Anwar Ibrahim said today the RM60 billion stimulus package announced by the government yesterday would not restore the people’s confidence.

“The biggest weakness of this package is the failure of the government to understand that the issue of the confidence of the people, of the domestic and international investors is central,” he told reporters after debating the mini budget at the Dewan Rakyat.

He added that promoting accountability should have been a major component in the package.

“The government needs to change their attitude in order to get the people’s support, if not this stimulus package will only be seen as an exercise to rescue sick cronies and greedy monopolists, to reward the inefficient,” Anwar told the House.

He also painted a more gloomy picture of the economy, predicting that the economy would contract by up to five per cent this year.

He added that even if the package is implemented, the country’s growth would still be in the negative.

“The fiscal injection is only RM15 billion where RM10 billion is for 2009 and RM5 billion for 2010. The rest does not involve development expenditure which will help generate growth,” said Anwar.

“This means that for the year 2009, the fiscal injection is only RM17.1 billion. RM7.1 from the first stimulus package and RM10 billion for the second stimulus package. Theoretically, it will only contribute 3.2 per cent to the economic growth based on the GDP of RM535 billion in 2008,” he added.

“I hope the government will revise the package as the amount may be big but the impact will not be huge to the nation’s economy,” said Anwar.

He also accused the government of attempting to bail out certain companies in the stimulus package.

My concern is the allocation of RM10 billion for capital investment. Will this be used to bail out certain companies? The government had channeled RM7 billion to Valuecap where RM5 billion was borrowed from [size=150]EPF[/size]? What has happened to the investment made by Valuecap?” asked Anwar.

He also urged the government to reassess concession agreements with toll operators adding that he believed toll charges would go up after the three by-elections next month.[/quote]

DSAI is right… the money will be used indirectly to rescue those troubled companies related to certain politicians… given out new projects worth millions.
Even the Malaysian share market (KLCI) doesn’t react positively to this mini budget… the CI drop again today :roll:

How much of RM60 Billion will benefits the people and how much will it benefit the cronies?

I’m not at all feeling thrilled or stimulated by the announcement. US, being our biggest trading market has “sneeze”, everyone else get the “cold”. I think it’s a bit too late to halt the slide towards recession.

USA didn’t sneeze … haiz lazy to explain … look at this chart, use 5 years scale … then maybe you might understand a little …

http://finance.yahoo.com/echarts?s=C#ch … =undefined

[quote=“rabbitx”]USA didn’t sneeze … haiz lazy to explain … look at this chart, use 5 years scale … then maybe you might understand a little …

http://finance.yahoo.com/echarts?s=C#ch … =undefined[/quote]

slightly wee bit more than just a sneeze…
what was once 50$ a share is now 1.45$?
either lose everything or… make a killing!

makes sense for the G to be spending, but most countries are doing it on more ‘traditional’ lines, ie. on infra-structure,
primarily on: roads, some new & some just needing repair; hospitals, with similar; educational institutions, mostly needing repair/upgrades for 21st technology.

yeah, your totally rite, in other words, only Minority will BENEFIT from it. Just like the electricity bills that were RM20 and below will be exempted, how many ppl use less than that??

well that is why the fund was proposed. the true objective of this fund is to make sure that big cooperation gets support from the local government that their investment is being protected and up hold. this news about making more jobs is just surplus of what their doing and it is necessary to say so in the public so the people’s way of life (for some) can have some relief or some sort of security. it doesn’t matter where the money go, as long it is spent in malaysia. These company belong to those cronies … yeah yeah are bloody money suckers, but hey they’re the one doing the job getting things done cuz no one else can do it better eh… cuz even you were to give the contract to another contractor, he won’t have a great time cuz of the lack of connections in the people he has to deal with, which these cronies company excel at … come on lah if you have 1 million dollar to put in a bank, wouldn’t you put it in the same bank that the prime minister place his … ?? this is malaysia. learn to live here. dirty money, easy contract and doggy construction work is beauty of it.

nicely said, couldnt agree more…