Datuk Sulaiman Mohd Tahir, Group CEO, AMMB Holdings Bhd
The National Budget is a strong start to improving the well-being of the Rakyat while improving domestic economic prospects given the higher allocation of RM97 billion for development expenditure.
In tandem, the fiscal deficit is projected to narrow to 5.0% of GDP, which most certainly demonstrates the Government’s financial prudence in managing the economy.
At AmBank, Small and Medium Enterprises (SMEs) are the bedrock of our customer base and we are encouraged by the Government’s efforts to support this crucial pillar of our economy specifically as a result of the RM10bil loan funds to be provided by Bank Negara Malaysia (BNM) to ease the financial burden of SMEs as well as Syarikat Jaminan Pembiayaan Perniagaan (SJPP) to provide guarantee of up to RM20 billion, focusing on sectors such as high technology, agriculture, and manufacturing.
This will certainly empower local SMEs.
We also laud the Government’s call to strengthen Islamic financing which will most certainly bode well for Malaysia as an Islamic financing hub.
On this note, AmIslamic looks forward to build on this momentum.
The forward thinking aspirations of the Budget, particularly with regards to ESG in the form of loan funds of up to RM2.0 billion to support sustainable technology for start-up companies and promoting SMEs towards embracing low carbon practices demonstrate the Government’s tangible commitment to ESG and we hope for SMEs and GLCs to build on this positive trajectory.
Datuk Khairussaleh Ramli, group president and CEO of Maybank and chairman of The Association of Banks in Malaysia (ABM)
At the outset, the re-tabled Budget 2023 commits to fiscal consolidation with further reduction in budget deficit to GDP ratio to 5% this year and to 3.2% by 2025.
However, we believe the government will continue to remain steadfast in addressing issues like high cost of living, better-paying jobs and adequacy of retirement savings as well as implement measures for socio-economic uplift of the poor and low-income groups, tax cut for middle-income taxpayers, empower MSMEs, promote investment, boost tourism, enhance food security, improve basic public infrastructure and essential public services.
These are balanced with redistributive and progressive tax proposals such as increases in tax rate of higher income taxpayers, luxury goods tax, capital gains tax on disposal of unlisted shares and excise duties on vape products, coupled with strengthening governance and effectiveness of public spending.
We welcome the budget initiatives that are relevant to the financial sector, including tax incentives for ACE and LEAP listings and Bankruptcy Act reform which will catalyse entrepreneurship, the renewed focus on Islamic finance and the proposed consumer credit act and monitoring authority to create a level regulatory playing field.
Equally important to note, the budget is not just about medium-term fiscal sustainability but also broader aspects of longer-term sustainability, including protecting biodiversity, preserving environment, greening the economy and addressing climate change.
Datuk Abdul Rahman Ahmad, group CEO of CIMB Group
We are pleased to see the Malaysian Government’s focus on driving sustainable economic growth through Malaysia MADANI Budget 2023.
As Malaysia’s economy continues to recover, the prudent, targeted and inclusive approach taken provides an optimal balance in helping the Rakyat and businesses alike to navigate the ongoing uncertain environment.
In driving economic recovery, we are encouraged to see financing support for start-ups as well as small and medium enterprises (SMEs).
These include, among others, RM2 billion in financing to support sustainable technology startups and to help SMEs adopt low carbon practices, as well as RM1 billion to help SMEs automate business process and digitalise their operations.
The focus on sustainability as well as digitalisation will strengthen the growth and resilience of our SMEs, and ensure our economy is future-proofed. This is also aligned with CIMB Group’s sustainability agenda and our aspiration to become an ASEAN sustainability leader, where we recognise the critical role of financial institutions in catalysing the adoption of ESG-aligned practices.
We also welcome the focus on improving the vibrancy of Malaysia’s capital market. In particular, we welcome the proposed tax cut on listing expenses for the ACE and LEAP markets through 2025 and the listing expenses of technology-based companies on the Main Market of Bursa Malaysia, in addition to the easing of the secondary listing process for private market instruments to improve liquidity as well as the efficiency of price discovery.
The introduction of dual class share listings is also an encouraging development in stimulating the listing of high-growth technology companies domestically.
Through CIMB Investment Bank, we will continue to play our part in actively promoting a more vibrant capital market.
In supporting the Government’s Islamic finance agenda, CIMB is committed to continue supporting Malaysia’s position as a leader in the global sukuk market and pioneer in this space.
We welcome the Government’s focus on driving more active market participation as well as equitable distribution of wealth among the Rakyat through value-based intermediation (VBI).
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 addressing the issue of financial scams, we welcome the Government’s RM10 million allocation to the National Scam Response Centre (NSRC).
CIMB is committed to supporting the enhanced security measures against scams as announced by Bank Negara Malaysia (“BNM”).
CIMB has already implemented a self-service ‘kill-switch’ feature in our mobile banking apps, migrated from
SMS TACs to SecureTAC authorisation for transactions of RM100 and above, and implemented single registered device for mobile banking authentication.
We are on track and committed to implement measures to further strengthen banking security, and work together with our customers to combat scams.
As a financial intermediary, CIMB remains committed to engage with stakeholders across the private and public sectors and civil society in supporting the ambitions set out in Malaysia MADANI Budget 2023 for the benefit of the Rakyat.
We are confident that together, we will be able to create an inclusive and resilient economy that will help all Malaysians to weather the challenging environment.
Tan Sri Tay Ah Lek, managing director/CEO of Public Bank Bhd
The coming year will continue to be one fraught with challenges, as stubborn inflationary pressures and consequent monetary tightening globally will lead to weaker consumption spending and slower economic activity.
To this end however, all stakeholders of the nation must stand united as we work on driving Malaysia forward in this post-pandemic era towards a more sustainable period of stronger growth.
We are most encouraged by the Government’s lead and refreshed vision in setting out a new course with this re-tabled Budget 2023 expenditure plan.
The Public Bank Group has steadfastly and actively facilitated growth of the nation through the years. We remain committed on intensifying our efforts further as Malaysia works on regaining its footing as an economic powerhouse and high-income nation within the region.
Equally important however is the nation’s future being safeguarded through the exercise of prudence over finances, and we are encouraged to note that the government is prioritising the lowering of its budget deficit on a path to sustainable growth with a lower expenditure bill of RM386.1 billion.
The Honourable Prime Minister’s MADANI policy framework encompassing the spirit of inclusiveness is evident in 35.2% or about RM136 billion allocated for programmes and projects under the social sector and 19.1% or about RM74 billion towards reshaping the economic landscape of the country.
This will continue to ensure income gap between the Rakyat and the development gap among the states are reduced further.
Government agencies’ continued provision of financing and guarantees amounting to RM40 billion for the benefit of Micro, Small and Medium-sized Enterprises (MSMEs), Bank Negara Malaysia’s RM10 billion financing facility for SMEs and guarantees of up to RM20 billion provided by Syarikat Jaminan Pembiayaan Perniagaan (SJPP) will provide much needed lifts to businesses.
The government’s allocation of RM8 billion towards Sumbangan Tunai Rahmah (STR) will help alleviate difficulties of 8.7 million people in the B40 category burdened by rising living costs.
Personal income tax cuts amounting to RM900 million will see at least 2.4 million people in the M40 category benefitting.
In a surprising but highly-compassionate move, the government will deposit RM500 into the accounts of Employee Provident Fund contributors aged between 40 and 54 with savings of less than RM10,000 in their accounts, expected to benefit 2 million members, involving an allocation of RM1 billion.
In short, Budget 2023 is broad base and adequately addresses the current needs of all strata of society.
Issues like food security and preparedness for natural disasters are also being addressed, in addition to infrastructure spending covering healthcare and education, and digital infrastructures to address development and digital gaps.
Climate change is no longer a topic reserved for conversations of scholars, activists or conservationists, its damaging effects already evident here in Malaysia in recent years with distinct changes in weather patterns and unprecedented flooding in areas never seen before, amongst others.
On this note, the Government’s continued focus on sustainability-based initiatives in Budget 2023 is lauded, with ongoing emphasis given towards enhancing green investments and projects in line with the United Nation’s Sustainable Development Goals (SDG).
The Public Bank Group reaffirms its commitment in partnering the government and various stakeholders towards advancing these agendas.
We continue to be fully supportive of the government’s initiatives as laid out in Budget 2023, a well-thought and comprehensive plan which we believe will strengthen the country’s post-pandemic recovery while also enhancing the well-being of the Rakyat.
Mohd Rashid Mohamad, group managing director/group CEO of RHB Banking Group
We welcome the expansionary nature of Budget 2023, which provides the much needed support in addressing the high cost of living, further strengthening the social safety net as well as enhancing the micro, small and medium enterprises (MSMEs) ecosystem. The government remains steadfast in balancing the need to safeguard the well-being of the people and the nation while ensuring a sound and sustainable fiscal position.
Budget 2023 will increase the momentum for economic recovery with emphasis on structural reforms to strengthen economic resilience, measures to support the growth of MSMEs and priority sectors coupled with assistance to targeted groups.
As a financial services group, RHB will continue to play a significant role in supporting the nation’s economic recovery and development, in particular vulnerable segments of the community, the growth of MSMEs, as well as promote sustainable development towards supporting the country’s transition to a low carbon economy.
Selene Ling, chief economist of OCBC Bank (M) Bhd
The Malaysian government has tabled its Budget 2023 today.
In line with market and OCBC’s expectation, Budget 2023 represents a balancing act between the need to support the Malaysian economy and the determination to continue with fiscal consolidation.
2023 Budget deficit has been planned at 5.0% of GDP, which is an improvement from the 5.6% of GDP for 2022. The improvement is to be achieved via a higher nominal GDP (a bigger-sized economy) while the fiscal deficit amount is planned to be a tad smaller than the 2022 outcome.
The spending package for 2023 is mildly smaller than the outcome for 2022 but remains generous. The decrease in expected fiscal spending is primarily due to the expiry of the COVID-19 Fund and spending optimization measures such as reducing spending wastages and shifting to a more targeted subsidy framework.
The Budget remains supportive of economic growth both on a short-term and long-term horizon. Allocation on development expenditure is planned at MYR97bn, a significant increase from the previous year.
This is expected to enhance Malaysia’ long-term growth potential via investments in infrastructure, health care facilities and educational institutions under 12MP.
For instance, Malaysia will expand the capacity of Penang and Subang airports, which is timely given the increasing international visitor arrivals, especially with China’s reopening.
Fiscal revenue is expected to fall slightly alongside slower economic growth and expected moderation of commodity prices.
The government forecast 2023 GDP growth at 4.5%, a slowdown from the impressive 8.7% in 2022. OCBC’s 2023 GDP growth forecast for the Malaysian economy is 4.4%, partly due to the high base last year as well as the global growth slowdown, especially in key markets.
There are policies to broaden the tax base and streamline tax reliefs to mitigate the impact on fiscal revenue. We believe these policies will be carried out in a calibrated manner, as the government recognises the challenge of rising cost of living particularly for vulnerable groups.
Notable budget announcements included the shift to a more progressive tax system with the personal income tax cut by 2% for those earning a taxable income of MYR35,000-100,000 to benefit 2.4 million taxpayers, whereas those earning MYR100,000-1million will see higher tax rate of 0.5-2% affecting less than 150,000 taxpayers.
In addition, Malaysia will introduce taxes for luxury goods this year, plan for excise duty on liquids and gels containing nicotine, as well as study imposing a capital gains tax.
Malaysia will also cut the corporate income tax rate for smaller firms from 17% to 15%.
Budget 2023 strikes a balance between the need to support the economy and the commitment on fiscal consolidation. The Budget can be expected to be welcomed by the market.
Mak Joon Nien, CEO of Standard Chartered Malaysia
The country’s “Developing Malaysia Madani” Budget 2023 is well curated, recognising the delicate balance of fiscal discipline and maintaining growth momentum into 2023. As the largest allocation in Malaysia's history, the MYR388.1 billion budget reinforces collective resilience to help the nation withstand external pressures and economic shocks in the long run.
We laud the gradual reduction of operating expenditure to MYR 289.1 billion to further strengthen the nation’s fiscal position.
It is heartening to note that Budget also truly reflects on the government’s commitment to protect the livelihood and wellbeing of the people.
We support the government’s commitment to ensure that ASB fund holders will receive more dividends and assistance up to MYR64 billion will be allocated for the people in the form of subsidies, cash aids and incentives to address the high cost of living and inflationary pressures.
The government’s initiative to ease the financial burdens of 8.7 million beneficiaries from the B40 community, with provisions close to MYR8 billion, is key to ensure that no one is left behind.
As part of the government’s efforts to protect the lower-income community, the M40 individual income tax will be reduced by two percentage points for those in the taxable income bracket of RM35,000-RM100,000 starting this year, in a bid to relieve the burden of rising cost of living faced by the middle 40% household income group.
At the other end of the scale, the government will take a more progressive approach to broaden its tax base by targeting those who can afford to pay by implementing luxury goods tax and mulls capital gains tax.
As facilitators of cross-border trade, we strongly support the government’s mandate of Tun Razak Exchange as an international financial hub and the designation of a special financial zone within Iskandar Malaysia to attract quality investments and skilled workers.
With our roots in trade banking in Malaysia dating back to over a century, initiatives such as the expansion of Penang International Airport and Subang Airport, development of a port in Sanglang, Perlis and construction of a main port in Carey Island will cement the country’s position as a key trading hub in ASEAN.
As a financial institution, we’re proud to align ourselves to the national agenda to transition to net zero by delivering sustainable finance solutions to where it matters most, taking the lead from Bank Negara Malaysia, which is providing up to MYR2 billion in financing facilities to support sustainable tech start-ups and help SMEs incorporate low-carbon practices.
Despite being the backbone of a nation’s economy, equitable access to financial support continues to be a main challenge for SMEs. Hence, we welcome the provision of up to MYR40 billion in financing facilities and credit guarantees, as well as Bank Negara Malaysia’s move to provide almost MYR10 billion in loans for SMEs to lighten their financial burden and support business growth.