As of today (October 7th, 2022), the Ministry of Finance has officially announced Budget 2023 for the upcoming year in Parliament. Unveiled under the banner of “Keluarga Malaysia, Makmur Bersama”, it was tailored to focus on four key areas, namely people, business, economy and government. Amid predictions of a potential global recession, the budget also serves to prepare Malaysians for a bleaker outlook brought on by challenges in the world economy.
Budget 2023 to come in at RM372.3 billion
A sweeping number of initiatives were introduced to address concerns surrounding rising inflation rates and cost of living, while also improving employment opportunities, enhancing the competitiveness of SMEs as well as business facilities, while simultaneously restoring the country’s still-recovering tourism sector and encouraging automation and digitisation efforts across the board.
Budget 2023 will see the federal government allocating a total of RM372.3 billion. This is an increase of RM40.2 billion over the previous year’s budget of RM332.1 billion. Of that amount, RM272.3 billion was allocated for operational expenditures, RM95 billion for development, RM5 billion for the National COVID Fund, and RM2 billion going into reserve for unexpected expenditure.
The largest recipient of this year’s budget is the Ministry of Finance at RM67.2 billion, followed by the Ministry of Education at RM55.6 billion, and the Ministry of Health at RM36.1 billion.
Health
- Public healthcare sector to receive boost of RM4.9 billion to increase capacity.
- RM25 million will go to the treatment of rare diseases, with Hospital Kuala Lumpur and Hospital Tunku Azizah acting as reference centres.
- New trust account set up for rare diseases. Contributors to receive 10% tax exemption.
- RM10 million allocated for purchase of 10 units of 3D printing machines used in public dental care to reduce appointment numbers at clinics.
- New priority for mental health services, with govt setting up a mental health centre for excellence.
- RM1.8 billion channeled towards construction of new healthcare facilities and for purchasing of new equipment.
- RM80 will go towards the SOCSO health screening initiative.
- RM15 million channeled towards Healthy Malaysia National Agenda to combat obesity.
- RM80 million channeled towards Peka B40 Health initiative, now to include screening for diabetes.
Farming, agriculture, and fisheries
- Farmers and fishermen to receive RM1.8 billion worth of subsidies.
- Padi farmers to receive RM228 million in aid, benefitting some 240,000 people.
- Cooperatives to receive RM100 million to develop agro-food sector
- RM256 million will be channeled to rubber smallholders in the form of rainy season assistance.
- AgroPenjara program involving convicts will receive RM10 million allocation.
- RM70 million channeled towards Malaysian Sustainable Palm Oil (MSPO) certification.
- RM315 million towards rubber planting initiatives.
- RM40 million in support of smallholders diversifying their crops.
Education
- RM2.3 billion will go towards ensuring schools remain a safe and conducive environment.
- 800,000 students and 7,300 canteen operators will benefit from the RM777 million towards the supplementary food programme (RMT).
- All students nationwide to receive a cash aid of RM150, regardless of their family’s income bracket.
- Discounts of up to 20% will be issued for the repayment of PTPTN loan borrowers from November 1st to April 30th, 2023.
- RM15.1 billion will go towards the Higher Education Ministry.
- Five new schools will be constructed in the states of Sabah, Sarawak, Terengganu, Cyberjaya and Selangor, at a total cost of RM430 million.
- RM1.1 billion will go to the repairing of all schools nationwide, including vernacular and religious schools.
- RM1.2 billion will go towards the repairing of school infrastructure in East Malaysia.
- Domestic JPA scholars and officers to receive increase of RM100 in their allowance.
- Public universities to receive RM10 million allocation for green campus initiative.
- RM6.7 billion will be channeled to Technical and Vocational Education and Training (TVEV)
- RM180 million will be used to fund the training of 13,000 TVEV trainees.
Welfare Aid
- RM2.5 billion has been allocated to the monthly assistance for underprivileged families through the Community Welfare Department, benefitting 450,000 households
- Single parents will receive RM3,000 in welfare assistance.
- Households earning less than RM2,500 will receive RM2,500 in welfare assistance.
- Single parents will receive RM3,000 in welfare aid.
- RM1 billion will go towards combatting poverty rates in Malaysia.
- RM8 million will be allocated towards social support centres.
Aid for the disabled
- RM10 million will go towards providing e-hailing vouchers to disabled individuals.
- RM1.2 billion channeled to helping disabled individuals become financially independent.
- RM20 million allocated for the improvement of equipment and facilities in special need schools.
- New incentives to increase number of special need taskas from 13 to 50.
Employment
- Employees who hire jobless local youths will receive incentives from SOCSO.
- RM750 million will go towards the upskilling of employees.
- MyStep initiative to create 50,000 jobs: 15,000 in public sector, 35,000 in GLCs
- RM63 million channeled towards the development of human capital
- All self-employed individuals must now contribute to SOCSO.
- Food delivery personnel, farmers, fishermen, artistes under Finas and hawkers to contribute only 20% of SOCSO, govt will bear 80%. Initiative to expand to gig economy workers and taxi drivers.
Civil servants
- Those between Grade 11 to Grade 56 to receive RM100 increment, totaling RM1.5 billion
- One-off RM700 special aid for civil servants under Grade 56, totalling RM1.3 billion
- Special leave applicable for 500,000 teachers in public service
- Aidilfitri aid to be increased to RM600
Pensioners
- RM1 billion will go towards welfare assistance for senior citizens.
- RM21 million will go towards operators of welfare homes.
- 1 million retired civil servants to receive RM350 one-off aid
Business
- RM50 million will go towards the young trader scheme under Bank Simpanan Nasional’s (BSN) purview.
- RM305 million will go towards empowering local youths to start their own businesses.
- RM20 million will go towards providing scholarships to 1,000 people outside entrepreneurship.
- RM200 million will go to the subsidising of logistic costs for essential items.
- Incentives will be provided by SOCSO to employers who hire new staff who are disabled, Orang Asli, ex-convicts, or women returning to work. The incentive will amount to between RM600-RM700 a month for three months per employee. This will cost RM150 million and benefit 70,000 people.
- RM45 billion will go to the Semarak Niaga fund for entrepreneurs.
- Micro SME operators to receive 2% tax reduction.
- MITRA to receive RM100 million for the development of entrepreneurs.
- Up to RM9 billion worth of guarantees allocated for SMEs.
- RM50 million will be channeled to support commercial property ownership by Bumiputeras.
- Tax incentives for pharmaceutical companies to continue.
- RM50 million support as well as tax incentives extended to development for aerospace components.
- Purchase of film equipment to enjoy import duties and sales tax exemptions
- RM10 million channeled towards Made in Malaysia initiative
- RM92 million channeled towards development of local halal sector
Housing
- RM3 billion will go towards housing credit guarantees.
- Stamp duty discounts of up to 75% will be applicable for houses costing between RM500,000 to RM1 million.
- RM367 million will go towards the building of new public housing (PPR), benefitting 12,400 new residents.
- Around 4,250 new housing units under the Rumah Mesra Rakyat will be built, totalling RM358mil
- The ongoing RM40 electricity bill subsidy will be continued.
Women empowerment
- RM235 million will go towards empowering female entrepreneurs.
- RM11 million will go towards subsidies for cervical cancer screenings and mammograms.
- Women who return to the workforce between the years of 2023 to 2028 will receive income tax exemptions.
- RM120 million has been allocated towards funding the Kasih Suri Keluarga program, which is set to benefit 200,000 housewives.
- RM50 million will go to the development of female contractors.
Child health & welfare
- 10 KEMAS daycare centres will be established at the cost of RM188 million.
- Parents can receive RM3,000 in tax exemptions for tadika and daycare expenditures.
- Female Bantuan Keluarga Malaysia (BKM) recepients will receive a one-off RM500 cash aid if they give birth in 2023.
Personal finance
- Those earning between RM50,001 to RM100,000 will see their personal income tax reduced by 2%, which is expected to benefit 1 million people in the M40 category.
- The voluntary EPF contribution rate will be raised from RM60,000 per annum to RM100,000 per annum.
- All individuals who are self-employed will have to contribute to SOCSO by next year.
eSports in Malaysia
- RM13 million to go to development of eSports in Malaysia.
Sports in Malaysia
- RM20 million to go towards construction of drag race circuits.
- RM154 million will go to the development of the local sports ecosystem for both professional athletes & public.
- RM145 million will go to the improvement of sporting facilities and infrastructure nationwide.
- Individuals working with non-profit organisations (NGOs) in grassroots sports development are eligible for tax exemptions.
- RM10 million channeled to Fit Malaysia and National Sports Day.
- RM5 million channeled to National Athletes Welfare Foundation (YAKEB) to assist former athletes in need.
Transportation
- My50 RapidKL monthly pass will be continued.
- RM180 million will be allocated to improve public bus services in Melaka, Kedah, Kota Kinabalu and Kuching
- All registered MSMEs and taxi drivers to receive one-off grant, totalling RM1 billion.
- RM10 million will go towards subsidising cost of obtaining Class B2 motorbike licenses under the Skim Tekun MobilePreneur initiative.
- RM180 million will go to expanding routes served by city busses in Melaka, Kota Kinabalu and Kuching by 2023.
- The government will absorb the cost of obtaining e-hailing, taxi, and motorcycle licenses for youths.
- Those holding army veteran cards and police retiree cards in Kuala Lumpur, Selangor, Pahang and Penang to enjoy 50% off public transport under Prasarana.
- MRT Phase 2 expected to be complete and operational by January 2023.
- RM1.5 billion allocated to improving current transport infrastructure in East Malaysia.
Digital technology & connectivity
- A new Internet package developed for youths costing only RM30 for three months will be introduced.
- Jendela initiative to receive RM70 million to provide digital connectivity for 47 industrial areas, 3,700 schools
- RM1.3 billion allocated to Digital Nasional Berhad (DNB) for the construction of 5G infrastructure to expand 5G coverage in highly populated regions
- RM73 million channeled towards CyberSecurity Malaysia to enhance monitoring, detection, and cyber forensics of cyber crimes.
- New platform for public to report on online scams to be created.
- National Scam Response Centre to be established, in collaboration with PDRM, BNM, NFCC and various financial institutions locally.
Infrastructure & development
- RM10 million will go towards development of ThinkCity initiative in KL.
- 85 new bridges to be built in rural regions at a total cost of RM85 million.
- RM50.2 billion to go to MRT3 construction.
- RM11.4 billion allocation towards repair and maintenance of Federal roads and government buildings.
- RM20 million will go towards the construction of new urban transformation centres.
Automation & Digitisation
- RM10 billion will be dispersed from BNM to aid SMEs in digitisation and automation efforts.
Disaster relief
- RM256 million will go towards monsoon aid.
- RM400 million will go towards NADMA.
- RM15 billion channeled to flood mitigation plans lasting until 2030. 2023 to receive RM700 million.
eWallets & eCommerce
- RM800 million will go towards providing those in the M40 category with RM100 e-wallet credit.
- RM400 million will go towards the continuation of the e-Pemula scheme, estimated to benefit 2 million youths between ages of 18 to 20.
The arts & tourism industries
- RM209 million will go to subsidising air travel to rural parts of Borneo.
- RM90 million towards the promotion of tourism activities via Geran Padanan Galakan Melancong.
- RM200 million will go towards recovery of tourism sector.
- RM10 million will go to promotion of eco-tourism sector.
- BNM to provide RM500 million in tourism financing.
- RM20 million towards Malaysia Healthcare Travel Council for the promotion of Malaysia as a medical tourism destination.
- RM10 million will be channeled to the preservation of local languages and culture.
- RM25 million channeled to discounts, vouchers and rebates of up to RM100 for domestic travel.
- RM102 million channeled to supporting local artists.
- National Film Production Fund (DEKAN) to receive RM50 million support.
- RM102 million channeled into Digital Content Fund for the marketing of new local creative works
Defence & National Security
- Ministry of Defence to receive allocation of RM17.4 billion.
- Ministry of Defence to receive RM4 billion for purchasing of new military assets.
- RM485 million will be channeled to the maintenance of boats and ships under the Malaysian Maritime Enforcement Agency.
- RM47 million channeled to construction of 2 new field hospitals in Kluang and Kota Kinabalu for emergency disaster response.
- RM431 million channeled to the police for improvement of public order via purchasing and maintenance of assets.
- RM42 million channeled to the police for the maintenance and upgrading of police quarters.
- RM28 million channeled to Prisons Department for quarters projects.
Sustainability & the environment
- RM1.5 billion will go towards sustainable developments.
- RM165 million going towards the construction of solar roofs and EV charging stations by Tenaga Nasional Berhad.
- RM3 billion channeled towards the Green Technology Financing Scheme (GTFS)
- A new carbon tax is to be introduced.
- Manufacture of electric vehicle charging parts to receive 100% tax exemption
- RM56 million towards sustainable farming initiatives.
- RM36 million channeled to conservation of local endangered species
- 100 million trees to be planted by 2025 as government ramps-up reforestation efforts
- RM216 million channeled towards river cleanup operations
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