A balanced deal during trying times

Budget 2017 has been lauded a “balanced deal”, considering the prevailing economic challenges facing the country.

Socio Economic Research Center executive director Lee Heng Guie said it addresses the needs of the people and economy without compromising the country’s financial stability.

“The Government remains on the path of fiscal consolidation without cutting too much,” the economist noted.

Tabled by Prime Minister Datuk Seri Najib Tun Razak in Parliament yesterday, Budget 2017 looked to tackle pressing issues faced by the rakyat, such as rising cost of living and affordable housing, as well as how to encourage the growth of local small and medium sized enterprises.

A lot of measures were targeted at the Bottom-40 of households earning less than RM4,000 per month.

For instance, for the lowest segment of people, the 1Malaysia People’s Aid (BR1M) payment would be increased by RM150 to RM1,200 per month.

There were a lot of measures for housing, ranging from homes priced between RM40,000 and RM50,000 per unit to be built on government land, to 10,000 homes in urban areas being put up for rent to eligible youths.

Najib also announced a special “step-up” end-financing scheme for buyers under the PR1MA programme, to facilitate financing of up to 100% of the price of the houses.

He also said that stamp duty on the transfer of real estate worth more than RM1mil will be increased by 3% to 4% effective Jan 1, 2018.

According to property consultants, the one-year grace period gives the high-end domestic housing sector some breathing space.

For the first time, Budget 2017 addressed the welfare of taxi drivers, who were reeling from competition with services such as Uber and Grabcar.

Towards this end, 12,000 qualified taxi drivers who have ended their leasing contract with taxi companies will be given a grant of up to RM5,000 to buy a new vehicle.

The Government also announced a scheme to help the lower income group in the country by enabling them to work as drivers for ride-hailing services.

In this respect, Najib announced that those entitled to the BR1M payment could use the money as downpayment to buy a Proton Iriz with a rebate of RM4,000.

A fair amount of attention was also given to the civil service, involving a one-time allowance of RM500.

On top of that, the housing loan eligibility of government servants will be increased to a maximum of RM750,000 from RM600,000 previously.

Also, civil servants whose contract of service ends this year will see an extension by another year.

To overcome the problem of doctors unable to do their housemanship, the Government will employ 2,600 of them by December on a contract basis instead.

For companies with less than RM2.5mil paid-up capital, the tax rate will be reduced from 19% to 18%; for companies with more than RM2.5mil, the tax rate reduction will range from 1% to 4%, depending on the increase in their chargeable income. At the moment these are paying 24%.

There were also various incentives for women and families who send their children to childcare centres and kindergarten.

For the first time, a tax relief was given for breast-feeding equipment and fees incurred for pre-school education.

The Prime Minister rounded off his Budget 2017 speech by announcing that the Government will hold a series of national talks with the aim of charting the nation’s future transformation.