Some views on the budget

  • Economy
  • Friday, 21 Oct 2016

AMMB Holdings Bhd Group Chief Executive Officer Datuk Sulaiman Mohd Tahir

Datuk Sulaiman Mohd Tahir
Group chief executive officer
AmBank Group

The 2017 Budget continues to focus on its commitment in ensuring the economy continues to expand at a healthy pace, and at the same time reduce the fiscal deficit and address the public debt with the overall objective of bringing prosperity to the nation and promoting the wellbeing of the rakyat.

One of the key initiatives of the Budget 2017 is on the affordable homes. The introduction of PR1MA house end-financing scheme bodes well.

In particular, it will benefit those household in the M40 category whose salary bracket falls between RM3,860 to RM8,319 per month as well as the B40 category whose salary bracket is RM3,855 and below will be the key beneficiary. This scheme will help address the first time home buyers’ in these categories who are currently experiencing difficulties to own an affordable home owing to limited supply. 

Another initiative under the Budget 2017 which will bode well for the economy is the introduction of reduction by stages based on percentage increase income for the SME sector and the tax reduction on chargeable income up to the first RM500,000 from 19% to 18% effective next year. Such incentives are expected to place the SMEs in a better footing and will enable them to contribute more significantly to the economy.  

Christian de Guzman
Vice president, senior credit officer 
Moody’s Investors Service

The budget’s focus on near-term fiscal consolidation supports Malaysia’s A3 rating. Although the Government projects that the deficit will narrow for an eighth consecutive year to 3% of GDP in 2017, we expect government debt to continue to climb.

It remains unclear how the Government’s previously stated goal of a balanced budget by 2020 can be reached, especially given the absence of major reforms to increase revenue. 

At a projected 16.6% of GDP in 2017, federal government revenue will decline for a fifth consecutive year from a recent peak of 21.4% of GDP in 2012. It will also be the lowest revenue take since 2000.
Nevertheless, fiscal consolidation has been enabled by the continued curtailment of expenditure, which has fallen faster than the decline in revenue.

Datuk Mohd Najib Abdullah
Group managing director 
Malaysian Industrial Development Finance Bhd

Budget 2017 offers an optimal mix of stimulus, incentives and safeguards required to navigate what is expected to be another challenging year ahead.

It is a well constructed budget, taking cognisant of the need to balance between the country’s aspirations to achieve a high-income nation status, and the 11th Malaysia Plan’s commitment towards economic growth which is anchored on the principle of inclusivity, equity, wellbeing and sustainability. 

The MIDF Group is of the view that the Government’s GDP growth forecast of 4.0 – 5.0% in 2017 is attainable amid the challenges posed.

The MIDF Group applauds the Government’s commitment towards fiscal probity by budgeting a deficit equivalent to 3.0% of GDP next year. Keeping the fiscal gap under control is a necessary stabiliser for the ringgit and should be positively welcomed by the markets.

The allocation of RM3bil special fund to invest in potential small and mid-cap companies will boost the trading activities in these counters and help rejuvenate liquidity and sentiment in the local stock market.

Traditionally, much focus is on the 100 top companies listed on Bursa Malaysia and this new fund will enable the investment companies to seek better capital returns and yields. This will unlock the value of small cap companies. The Small and Mid-Cap PLC Research scheme is also positive for small and mid-cap stocks because many of these companies are under-researched.

Overall, Budget 2017 is a prudent and proactive budget. The MIDF Group is confident that the various measures announced will help the country buffer the external headwinds in 2017 while continuing to enhance Malaysia’s long-term fundamentals.

Tan Sri Lodin Wok Kamaruddin
Chief executive
Lembaga Tabung Angkatan Tentera 

Lembaga Tabung Angkatan Tentera (LTAT) is heartened to note that the Government will be providing a special insurgency incentive payment to armed forces veterans amounting to RM55mil to enable those who have lost their abilities during their service in addition to disability pension.

The importance placed on the healthcare sector is evident given the total allocation of RM25bil for this sector, of this RM4bil has been allocated for the supply of drugs, consumables, vaccines and reagents to all Government hospitals and health facilities. This bodes well particularly for our pharmaceutical arm, Pharmaniaga Bhd.  

In terms of the defence sector, the Government has allocated RM15.1bil for the Ministry of Defence, of which RM1.8bil has been allocated for defence asset maintenance such as aircraft, patrol vessels, communication equipment, buildings and weaponry.  

In addition, Armed Forces will be equipped with patrol vessels. This augurs well for us given our participation in the maritime sector via Boustead Heavy Industries Corp Bhd. 

Tan Hooi Beng
International tax leader
Deloitte Malaysia

One of the objectives of The Budget 2017 is to increase the disposable income of the rakyat. The relief for fees paid to child care centres and kindergartens, and purchase of breastfeeding equipment will be helpful.

The full stamp duty exemption on first home ownership will enable the rakyat to own their first home. Meanwhile, the proposed reduction of corporate tax rate for SMES recognises the fact that SMES remain as an important element of the economy.

The proposed set-up of the Collection Intelligence Arrangement under the Ministry of Finance, it involving Inland Revenue Board, Royal Malaysian Customs and CCM simply means full compliance by taxpayers is the way forward. However, I remain hopeful that the tax agencies will continue to administer the tax law fairly and be lenient on genuine errors.

Sanjay Rohatgi
Senior vice president, Asia-Pacific and Japan
Symantec Malaysia

The Budget 2017 looks at the Government’s initiatives in accelerating growth and enhancing the wellbeing of the rakyat. The 2017 budget is reflective of Malaysia’s rapidly-transforming digital economy. 

It is encouraging to see an on-going emphasis on improving Malaysia’s quality and coverage of broadband nationwide. The allocation of RM1bil to bring up the internet speed to 20 mbps will definitely contribute to enhancing Malaysians’ involvement in the Digital Economy.

As more Malaysians embrace the Digital Economy via government initiatives such as eRezeki, eUsahawan and eCommerce, there needs to be an increased awareness on cybersecurity. 

Symantec’s Internet Security Threat Report 21 shows that cyber attackers are not slowing down. Malaysia ranks 47th globally in terms of ransomware attacks, with 5,069 attacks in 2015 alone.  

To improve Malaysia’s digital threat landscape, Malaysians need to educate themselves about security risks and best online practices. 

Symantec works regularly with governments and law enforcement partners globally to protect the world’s information. By working with our industry peers and governments across the world, we can better protect and manage the onslaught of these threats.

We look forward to playing our part in the nation’s on-going cybersecurity development as Malaysians continue to embrace the Digital Economy. 

Leon Foong
General manager
Uber Malaysia

We are delighted that the Government has recognised how Uber can positively impact the socioeconomic status of Malaysians in the B40 segment. By providing the choice to earn at the touch of a button to Malaysians from all walks of life, driver-partners can provide for themselves and their families, as well as have greater independence to pursue their dreams. 

We are also thrilled to be engaging Proton, the national car manufacturer, as a partner, and will make an announcement with more details soon. 

The initiative clearly provides tangible growth and economic empowerment. It is also a clear win for the ridesharing industry and shows forward-thinking leadership. We commend the Malaysian Government for this astute, people-centric Budget! 

Wherever we operate, Uber has positively impacted people and cities and we have positively contributed to the local economy. Ridesharing is here to stay and Uber will certainly continue to do our part in improving urban mobility in Malaysia.

Zainal Abidin Jalil
Group managing director
Dagang Nexchange Bhd

The economic growth forecast of 4%-5% next year will be able to positively drive an increase in trade volume for the country. In Malaysia, the backbone of the trade eco-system is the National Single Window (NSW) for trade facilitation, a single window system that allows vustoms-related electronic transactions and duty payments, and electronic document transfer between members of the trading community.

With such a system, the trading community can save time and cost, gain competitive edge, improve efficiency and productivity, and at the end of the day improve their bottom line. 

It is heartening to note that technological readiness or ability to leverage on technology for increase efficiency and enabling innovation of competitiveness - one of 12 pillars of measurement in the Global Competitiveness Report – has improved from the 47th position in 2015-2016 to 43rd position in the recent 2016-2017 report.

We are also hopeful that measures outlined in the 2017 Budget speech such as the development of an e-commerce eco-system and Digital Free Zone can further bring innovation in this area and contribute to ease of doing business for the country and ultimately the whole economy.

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