FMM gives the thumbs-up

Tan Sri Soh Thian Lai, president of Federation of Malaysian Manufacturers (FMM).

Tan Sri Soh Thian Lai

President

Federation of Malaysian Manufacturers (FMM)

THE budget is drafted against an uncertain macro backdrop.

Growth momentum has slowed significantly worldwide, compounded by an increasingly volatile geopolitical environment.

Hence, Budget 2024, with an operating expenditure of RM303.8bil and development expenditure of RM90bil, is mildly expansionary to support the 4% to 5% growth target for next year.

The gradual reduction of the fiscal deficit to 4.3% from 5% last year will support economic growth while avoiding the consequences of drastic austerity measures.

The industry is positive about the initial allocation of RM200mil to drive the New Industrial Master Plan 2030 to elevate the sector as the country’s engine of new growth. We also welcome the focus given to high-growth high-value (HGHV) sectors and incentives such as the tiered reinvestment tax incentives.

The introduction of the Investment and Trade Coordination Action Committee is also a step in the right direction to further attract more HGHV-related investments both foreign and domestic.

FMM also appreciates the incentives and allocation given to support manufacturers’ transition towards sustainability and a low carbon economy. We believe this would facilitate companies along the supply chain including small and medium enterprises (SMEs) as they prepare to meet the requirements under the European Green Deal, which include sustainable reporting, carbon border adjustment mechanism and the European Union deforestation-free regulation.

FMM strongly supports the efforts to continue the emphasis on automation and digitalisation by providing RM900mil for the SMEs under Bank Negara to increase productivity.

FMM thinks that the interest rate should be at 2% rate or lower to assist SMEs in view of a slow economic growth environment. However, FMM is disappointed that a national automation fund with an initial fund of RM500mil to be topped up by the collection of foreign worker levies was not considered.

Overall, Budget 2024 is well-balanced, prudent and forward-thinking.