Budget 2023: Reactions from the financial sector


"AmBank is pleased to contribute to the Government’s continued support for the growth of small to medium enterprises (SMEs), which are a key contributor to Malaysia’s economy," said Datuk Sulaiman Mohd Tahir, group CEO, AMMB Holdings Bhd

Datuk Sulaiman Mohd Tahir, group CEO, AMMB Holdings Bhd

Budget 2023 to Spur Economic Recovery and Strengthen Fiscal Responsibility Focused on economic recovery and fiscal responsibility, the 2023 National Budget is aimed at strengthening our foundation to drive the nation’s socioeconomic development.

The Budget is indeed reflective of the Government’s commitment to the wellbeing of the Rakyat, in tandem with ensuring Malaysia’s stability amidst continued headwinds in the current economic landscape.

AmBank is pleased to contribute to the Government’s continued support for the growth of small to medium enterprises (SMEs), which are a key contributor to Malaysia’s economy.

SMEs will certainly be able to benefit from the increased allocations and incentives, namely Semarak Niaga Keluarga Malaysia 2023 to RM45bil, encompassing direct loans, alternative financing and financial guarantees.

Alongside this, creating greater access to financing for SMEs, Syarikat Jaminan Pembiayaan Perniagaan will increase the guarantee limit to up to RM9bil for SMEs, which will serve to drive further contribution to Malaysia’s economy.

In addition, the initiative to reduce taxable income for micro SMEs certainly bodes well, particularly within this challenging environment where many businesses are still recovering from the pandemic and are straddled with cash flow issues.

To continue unlocking growth potential and transform as future-ready businesses, it is vital that SMEs embrace digitalisation, while tapping into sectors with strong prospects.

In line with this, the Government’s establishment of an RM10bil fund via Bank Negara to support the automation and digitalisation of SMEs, as well as the tourism and agriculture sectors is indeed timely and necessary.

As Environmental, Social and Governance (ESG) standards continue to gain prominence in the international arena, the RM1bil allocation under the Low Carbon Transition Financing Fund for SMEs will help to strengthen business resilience and sustainability while contributing to Malaysia’s aspirations towards net zero emissions.

Datuk Khairussaleh Ramli, group president and CEO of Maybank & chairman of the Association of Banks in Malaysia (ABM)

Budget 2023 seeks to balance the need for sustained domestic growth amidst global economic headwinds while ensuring fiscal prudence given current volatility seen in financial and currency markets.

We welcome budget allocations, tax incentives and fiscal measures that support domestic economic growth and are channelled towards themes of inclusivity, equality, sustainability, security and building resilience, which applies to all segments of society and business sectors.

Such incentives and measures are demonstrated through the two percentage points reduction in personal and SME income tax rates; the enhancements in financial assistance and welfare payments to lower income and vulnerable groups; re-building of retirement and voluntary savings; strengthening of food and social security; acceleration of tourism industry recovery; making home ownership affordable; improving essential public services like healthcare and education and improving preparedness, responses and mitigations to natural disasters.

Other measures that help continue to build the nation’ and people’s resiliency include the incentivising of human capital development and job creations; prioritisation of rural areas and less developed states; continued support rendered to micro-enterprises and SMEs including for sustainability transition; and attracting high-impact and high-quality investments in areas like electronics, medical devices, aerospace, chemicals, digital infrastructure, renewable energy and green technology.

Equally important is that Budget 2023 lays the foundations for fiscal reforms, starting with the shift to targeted subsidies. This must be complemented by sustainable revenue sources to reduce dependence on volatile commodity-related incomes and one-off tax revenues as seen in 2022.

Budget 2023 also highlights the latest measures that will be adopted by the banks in Malaysia to combat financial scams as announced recently by Bank Negara Malaysia, which the banks are fully committed to. This includes the migration from SMS One Time Password to more secure authentication method for certain transactions including fund transfers and payments, change of personal information and account settings.

Banks will also have 24/7 dedicated complaint channel/hotline for customer to report incidents of scam/fraud. On top of this, a National Scam Response Centre involving PDRM, BNM, MCMC and the financial institutions will be launched soon.

We also welcome the added spend under Budget 2023 to strengthen detection and reporting of cyber threat including the building of cyber forensic capabilities.

We also support the continued emphasis to drive the ESG and climate change agenda under Budget 2023, which is a key agenda for the Malaysian financial sector.

ABM members have already agreed on a set of seven broad ESG principles for the Malaysian banking industry.

This includes the commitment to achieve Carbon Net Zero across the entire business and financed customer portfolio, incorporate ESG into governance and risk management, as well as the commitment to identify, mitigate and manage risks of modern slavery and human rights across the supply chain.

Tan Sri Teh Hong Piow, founder, chairman emeritus, director and adviser of Public Bank Bhd

In the face of an increasingly volatile global economic landscape, we applaud the Government’s vision in setting out our nation’s near and medium-term course with a well-planned Budget 2023. It strikes the right balance between on-going prioritisation of the Rakyat’s well-being while guarding against potential challenges, and also sustaining Malaysia’s post-pandemic growth.

The Public Bank Group has played its role steadfastly in actively facilitating growth through the years. Our efforts will be intensified further as Malaysia continues to transition toward becoming a high-income nation.

Budget 2023’s spirit of inclusiveness reflects the Government’s promise of leaving no one behind. The Government’s planned expenditure of a notably higher RM372.3 billion in 2023 with 37.2% allocated for programmes and projects under the social sector shows its resolve and commitment in reducing the income gap between the Rakyat and the development gap among the states.

This will help ensure Malaysia progress successfully and sustainably as a nation.

Budget 2023 adequately addresses the current needs of the B40 and M40 groups through various cash assistance programs with widened eligibility criteria, tax incentives for home ownership and extension of employment-related initiatives, amongst others.

Micro, Small and Medium-sized Enterprises (MSMEs) will also be supported through access to traditional and alternative financing options, tax incentives and extension of grants, amongst others.

Issues like food security and preparedness for natural disasters were also addressed, in addition to infrastructure spending covering healthcare and education, and digital infrastructures to address development and digital gaps.

We read, on a daily basis, of the stark realities of an environment increasingly ravaged by the negative and far-reaching effects of climate change. Much progress has been made, but more will still need to be done.

We laud the Government’s renewed focus on sustainability-based initiatives in Budget 2023, with more emphasis given toward enhancing green investments for the development of low-carbon, resilient and healthy urban environments.

To this end, the Government’s higher expenditure of RM95bil for development in 2023 will see allocations channelled to programmes and projects with high socio-economic impacts in line with the United Nation’s Sustainable Development Goals (SDG).

The Public Bank Group has already embarked on this journey and reaffirms its commitment in partnering the government and various stakeholders toward advancing these agendas.

We are fully supportive of Budget 2023 which is expansionary but necessary in current times to sustain the post-pandemic recovery of the nation. We are confident that the continued partnership of the public and private sectors will enhance the resilience of our economy and strengthen our recovery, while enhancing the well-being of the Rakyat.

Dato' Abdul Rahman AhmadDato' Abdul Rahman Ahmad

Datuk Abdul Rahman Ahmad, group CEO of CIMB Group

We are pleased to see the Malaysian Government’s focus on strengthening recovery momentum and economic resilience as well as implementing comprehensive reforms to benefit Keluarga Malaysia through Budget 2023.

As Malaysia continues to recover post-pandemic amidst challenging global macroeconomic conditions and inflationary pressures, the responsive, responsible and reformist approach taken in Budget 2023 provides an optimal balance in helping the Rakyat and businesses alike to navigate this uncertain period.

We welcome the focus on initiatives that will benefit our youths, the B40 group and those who are self-employed or in the gig economy, as well as micro, small and medium enterprises (“MSMEs”), the backbone of our economy. This includes, for example, various tax incentives, grants, and

financing opportunities, which CIMB is proud to support via programmes such as Bank Negara Malaysia’s (“BNM”) iTEKAD initiative.

We believe the initiatives announced in Budget 2023 will ultimately help to promote a more broad-based and sustainable recovery.

We also laud the increase in the Amanah Saham Bumiputera (“ASB”) and Amanah Saham Bumiputera 2 (“ASB2”) investment ceiling to RM300,000, which will increase Bumiputera equity ownership and participation and, in the long term, help to secure their financial resilience.

In view of the growing prevalence of scams and fraud, CIMB welcomes the Government’s initiatives such as the establishment of a National Scam Response Centre (“NSRC”). On the Bank’s part, we are firmly on track to fully implement the enhanced security measures against scams as announced recently by Bank Negara Malaysia (“BNM”). We will continue to work closely with the authorities in order to protect consumers against fraud.

In line with the country’s sustainability agenda, we were encouraged to see the allocation for flood mitigation, highlighting the urgency of climate change adaptation. Similarly, CIMB is also pleased to support initiatives such as BNM’s Low Carbon Transition Facility (“LCTF”) in helping SMEs to adopt lower carbon practices.

As a financial institution, CIMB plays a critical role in channelling financing and capital in ways that will support a just transition towards a net zero economy and greater social equity. We will continue to support Malaysia’s ESG agenda through our sustainable finance products and services, including through Islamic finance value-based intermediation (“VBI”).

As always, CIMB is committed to collaborate and engage with stakeholders across the private and public sectors and civil society in supporting the ambitions set out in Budget 2023 for the benefit of the Rakyat.

We are confident that together, we will be able to create a productive and resilient economy that will help us all to weather the challenging environment.

Datuk Ong Eng Bin, CEO of OCBC Bank (Malaysia) Bhd

True to the mantra it trumpets, National Budget 2023 is responsive, responsible and reformist, even if much more can and remains to be done.

It is heartening to see the needs of the lower income and marginalised groups continuing to be attended to through an emphasis on their wellbeing.

The reduction in personal income tax for those in the RM50,000 to RM100,000 income category is welcome news even as those in this group continue to face the hardships associated with the ever rising cost of living.

I am also delighted to see education continuing to be given priority through the increase in budget allocation to RM55.6bil and the numerous forward-looking initiatives contained in the related plans; the commitment to creating job opportunities for those struggling to find one; and the emphasis on woman empowerment.

We hope that these will pave the way for further responsiveness and an even more responsible posture as we attend to the underlying needs of the nation as a whole so we can renew our journey toward becoming a developed and high income nation, one where the needs of everyone regardless of social status is seen to.

Above all, the reformist agenda must be kept a top priority item. We have come through the pandemic together. Now, we must stay together.

By keeping sustainability as an integral part of the equation, including through a strong focus on youth and development at grassroots level, we believe the correct signals are being sent out for our rebuilding efforts to thrive.

Mohd Rashid Mohamad, group managing director/group CEO of RHB Banking Group

We welcome the expansionary nature of Budget 2023, which provides substantial support to ease the financial burdens of the targeted groups. This includes providing the much needed social assistance while maintaining government’s commitment in ensuring fiscal sustainability via the review of public expenditure and a plan to have a more targeted subsidy plan towards vulnerable groups.

Budget 2023 will increase the momentum for economic recovery with emphasis on structural reforms to strengthen its economic resilience, measures to support the growth of SMEs and priority sectors, as well as improve people’s well-being. Coupled with consumer spending related measures and targeted tax cuts for certain groups, this would result in multiplier effects on economic activity.

As a financial services group, RHB will continue to play a significant role in supporting the nation’s economic recovery and development, in particular the growth of SMEs, as well as promote sustainable development towards supporting the country’s transition to a low carbon economy.

Tan Sri Abdul Wahid Omar, chairman of Bursa Malaysia

In line with the theme of a Responsive, Responsible and Reformist Budget, I am glad the Finance Minister remains committed to long term financial sustainability and to build Malaysia’s resilience to face any future crisis.

The commitment to reduce fiscal deficit to 5.5% of GDP in

2023 from 5.8% in 2022 and further to an average of 4.4% for 2023-2025 must be lauded.

One huge positive factor for the Corporate sector is the absence of prosperity tax in Budget 2023 which would have potentially shaved off the FBMKLCI’s 2023 EPS forecast by 5%-6%.

Without such tax being imposed, analysts have a consensus forecast EPS growth rate of 11.5% for 2023 compared to -1.1% for 2022.

This augurs well for the capital market.

The continued commitment towards sustainable development is also most welcomed.

Overall a positive Budget 2023.

Datuk Seri Awang Adek Hussin, chairman of the Securities Commission

The Securities Commission Malaysia (SC) welcomes Budget 2023 measures, which aim to sustain Malaysia’s recovery momentum, drive inclusive growth and enhance economic competitiveness.

Furthermore, Budget 2023 enhances economic resilience by facilitating reforms and fiscal discipline, both of which are necessary for sustainable growth.

The capital market initiatives announced today re-affirm the significant role of the capital market in supporting the post-pandemic recovery.

These initiatives will complement and assist efforts to boost market confidence, encourage growth and catalyse private sector investment in the economy.

The establishment of the graduate talent programme will help to champion the building of a sustainable skilled talent pipeline for the capital market.

This will contribute to nation building and address the talent deficit.

The talent deficit is a global phenomenon that will impact the growth trajectory of economies globally. Therefore, it is apt that Budget 2023 prioritises the boosting of the talent pool across the various economic sectors.

Measures aimed at encouraging the growth of alternative financing for these companies will provide new solutions to aid in their recovery, which has been lagging behind the wider economy.

The additional RM30mil allocated to MyCIF will further support the funding needs and catalyse growth of MSMEs.

Budget 2023 will also support and strengthen the contribution of women in both the public and private sectors, with the establishment of a public-private partnership to provide a structured training programme for women talent.

Mak Joon Nien, Chief Executive Officer, Standard Chartered Malaysia

The RM327.3bil Malaysia Budget 2023 is an inclusive budget that balances modest fiscal consolidation with the need to support the economy and improving the rakyat’s wellbeing. Amid global headwinds, the Budget will strengthen the country’s resilience over the long-term with a record RM95bil being allocated for development expenditure.

The RM55bil allocations for subsidies, assistance and incentives, on top of the reduction in income tax and price control of goods and services, are a welcomed reprieve for the rakyat in helping them manage the rising cost of living. Targeted subsidies will help the most vulnerable community cope as the country accelerates its growth momentum.

The Carbon Tax and the launch of the Sustainability Framework to set the targets for a fully ESG-compliant portfolio and carbon-neutral operations align with our commitment to help our clients transition to net zero, especially with climate change being one of the greatest challenges facing the planet today.

It is encouraging to see an allocation of RM73mil to improve monitoring, detection and forensic capabilities to combat cybercrime, in addition to the five key security measures recently implemented by Bank Negara Malaysia to help protect banking customers from scams. We are committed to provide full support to the authorities for the setting up of a National Scam Response Centre as a crucial platform for victims to receive timely and needed assistance.

As the first financial institution in Malaysia to be globally certified for workplace gender equality, Standard Chartered is heartened by the women empowerment agenda in the Budget, from the allocation of RM235mil to help women build, upgrade and market their businesses to the training programmes to increase the number of women in leadership roles, and income tax exemptions to help women returning to work. Lifting and driving greater economic participation amongst women are key to putting our economy back on track.

As a strong proponent for micro, small and medium enterprises (MSMEs) to get access to financial support, the financing facilities of SemarakNiaga amounting to RM45bil and the provision of RM9bil worth of guarantee schemes by Syarikat Jaminan Pembiayaan Perniagaan (SJPP) will aid them in their recovery in the aftermath of the pandemic. The tax reduction rate in taxable income for the MSMEs to 15% will help alleviate their cash burdens in the current rising interest rates environment.

The provision of RM92mil for the development of the Halal industry will boost the country’s halal export value. We take pride in being the first international Islamic bank in Malaysia to offer Halal360 to help local halal businesses thrive within the global halal trade economic landscape.

The introduction of more efficient tax processes such as e-invoicing and Tax Identification Number (TIN) will elevate tax experience and reduce administrative burden for companies, particularly for smaller businesses. This new tax incentive framework will position Malaysia as an attractive investment destination in light of global tax developments.

As facilitators of cross-border trade, the introduction of an investment fund with an allocation of over RM1bil is timely and will enhance Malaysia’s ability to continue attracting quality investments.

We support plans to develop towns bordering our neighbours such as Thailand and Kalimantan with our international network and local market expertise as these will further cement the country’s position as a key trading hub in ASEAN.

The MYR10bil allocation provided via Bank Negara Malaysia which covers the automation and digitalisation of SMEs will act as an enabler in unlocking access to the world economy for everyone to participate in to ensure a more balanced growth and reset globalisation.

The Budget’s focus on preparing the nation for digital transformation through the development of a RM25mil digital traffic hub and alternative data centre for the Southeast Asia region, the second phase of the National Digital Network (JENDELA) and the expansion of 5G network via Digital Nasional Berhad will support Malaysia’s ambition to become a high-income nation by 2025.

Datuk Wan Razly Wan Abdullah, president and group CEO of Affin Bank Bhd

Affin Bank Bhd welcomes the expansionary, well-balanced Budget 2023 of RM372.3 billion that was unveiled by the Government earlier today, aiming towards sustaining the country’s economic recovery momentum from Covid19, against the backdrop of sluggish global economic growth and other external headwinds.

The more comprehensive and expanded direct cash assistance amounting to a total of around RM10bil under Bantuan Keluarga Malaysia and Jabatan Kebajikan Masyarakat, will enable the

targeted group to meet their most pressing needs according to their priorities, while also creating multiplier effects in the local economy.

We also applaud the RM200mil allocation by the Government, which amongst other things will be utilised to promote and market our tourism industry – especially as international travel is expected to be on the rise with borders reopening across the globe.

The growth of our tourism industry will in turn spur more demand for our local goods and services.

SMEs form the bedrock of Malaysian economy, and they are the most vulnerable to any economic challenges.

The various assistance for the SMEs, including the RM10bil fund under Bank Negara Malaysia (BNM) and guarantee limit up to RM9 billion through Syarikat Jaminan Pembiayaan Perniagaan (SJPP) announced under Budget 2023 will further boost their ongoing recovery efforts and ensure their place in the mainstream of socio-economic developments.

Affin Bank has taken unprecedented action over the last few years to support businesses and our customers. We remain confident in the resilience of the Malaysian economy to weather any challenges and will continue to play our part to help maintain a vibrant business environment that will form a foundation for a more sustainable economic growth.

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Budget 2023 , reactions

   

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