Budget 2022: How the federal budget compares to Pakatan Harapan’s shadow budget | Malaysia

Officials watch Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz speak as the 2022 budget is tabled at Dewan Rakyat on October 29, 2021. – Photo by Shafwan Zaidon

KUALA LUMPUR, October 30 – The federal government has announced its biggest budget yet, with RM 332.1 billion allocated for 2021 compared to RM 322.5 billion for next year.

Through public consultation as well as other major stakeholders, the government’s budget rests on three key pillars, namely strengthening recovery, building resilience and driving reforms.

This year, the government had allocated 233.5 billion ringgit for operational costs, 75.6 billion ringgit for development and 23 billion ringgit for the Covid-19 fund, while an additional 2 billion ringgit is allocated as funds emergency.

However, prior to the federal government budget, the federal opposition coalition Pakatan Harapan (PH) also announced its shadow budget, with emphasis on an immediate infusion of RM45 billion, to deal with the impact of the Covid-19 pandemic, where 30 billion ringgit is expected to be spent on subsidies and financial subsidies for the economic sector, 6 billion ringgit injected into hiring incentives under the [email protected] program, 5 billion ringgit for households, which includes a one-time payment and 4 billion ringgit injected for the Ministry of Health.

Malaysian courier draw up a table of the main expenditure differences between the two budgets.

Job growth

In terms of employment growth, the government has allocated 4.8 billion ringgit to create some 600,000 jobs, compared to 6 billion ringgit as suggested by PH to create between 250,000 and 300,000 private jobs.

The federal government has announced several initiatives, including the extension of the JaminKerja program under the Social Security Organization (Socso) where RM 2 billion has been allocated to encourage some 300,000 people to return to work.

For more context, the initiative includes offering a salary incentive to employers of up to 20 percent for the first six months of employment and 30 percent for the following six months to encourage people. to return to work. The incentive should be increased to 30% and 40% respectively for the two six-month periods for target groups such as single mothers or housewives who have not worked for more than a year, people with disabilities and the indigenous community.

As part of the PH budget, the coalition proposed a similar solution where citizens are offered an incentive of RM 500 while employers are offered RM 300. They also suggest that the program should last for five years, but that everyone is eligible to enroll in the program for two years.

Overall, the government will also pursue other initiatives such as the Malaysia Short Term Employment Program or MySTEP with 80,000 contract jobs, including 50,000 in the public sector and 30,000 in related agencies. in the government, will be open from January 2022.

PH also presented a resumption solution for employee development and training efforts such as programs under MySkills.

The government had proposed a similar solution under the Global Online Workforce (Glow) of the Malaysia Digital Economy Corporation (MDEC).

Overall, the government aims to reduce unemployment to four percent.

Household help

PH has also proposed to increase the amount of direct cash assistance received by households under the Pakej Perlindungan Rakyat Dan Pemulihan Ekonomi or simply known as Pemulih.

Their proposed increased payments include RM 2,500 for extremely poor households, followed by RM 1,900 for B40 and RM 1,100 for M40 households.

PH also proposed that the government take into account households headed by mothers, as households headed by women only earn a median income of RM 1,300.

They also offered a monthly payment of RM100 to children under 12 to help parents hit hard by the pandemic. It will also make the cash payment program proportional to the size of the family.

In comparison, the government announced a new incentive for direct cash aid called Bantuan Keluarga Malaysia (BKM).

Under this program, families with up to three children will receive RM 2,000, while single parents or households earning less than RM 5,000 per month will receive RM 500, while families without children will receive RM 1,000. while those with two children are entitled to RM 1,500. .

A one-time payment of RM300 will also be given to the elderly.

Overall, the program will help 9.6 million beneficiaries with a budget of 8.2 billion ringgit.

Economic recovery

PH had maintained the need for an exemption from default interest on loans for B40 households with gross income below RM 5,880 per month while another billion RM was spent on low rate loans. interest for small businesses up to RM 50,000 per loan for micro, small and medium enterprises. companies through BSN with a simple and flexible application process.

PH has also suggested that the government set aside RM100 million in a matching grant for the restart, with up to RM20,000 per grant for businesses that have been forced to shut down due to the pandemic.

In comparison, the government announced the Semarak Niaga Keluarga Malaysia or SemarakNiaga where the government allocated some 40 billion ringgit to provide direct lending, financing and equity injection with the aim of benefiting all segments of businesses. .

This includes a RM 1.8 billion micro loan from TEKUN, Agrobank, BSN, Bank Rakyat and Bank Negara Malaysia (BNM).

BSN and Agrobank would also provide microcredits up to RM 75,000 without interest for the first six months.

The government also announced a 1 billion ringgit fund under the RESET (Rehabilitation and Support Through Equity) program to help companies resolve debt or leverage issues.

While for tourism, PH suggests the government explore implementing a government-backed Covid-19 travel insurance program to build confidence in domestic tourism.

The government announced key initiatives such as targeted wage subsidies for employers in Tourism Subsidies who have seen their incomes cut by at least 30 percent.

Special special aid of RM 85 million will also be distributed to some 20,000 tour operators affected by the pandemic.

Another 38 million ringgit grant will also be made available to 738 hotels and hostels registered with the Ministry of Tourism, Arts and Culture (Motac) for works to modernize their premises, as announced by the government, among other measures.

Another hard hit sector is the sports segment where the PH budget suggested the government convert the sports industry funding program into an easy-to-pay interest-free loan with an automatic six-month moratorium and increase fund size at RM100 million.

Other measures also include a rent subsidy of 50% or up to RM 5,000, a digitization subsidy of RM 10,000, as well as monthly assistance of RM 1,000 for six months for affected sports employees. by government restriction of movement.

For this economic sector, the government had announced income tax exemptions including sports competitions, international recreational activities and cultural activities until 2025.

Public health spending and Covid-19 funds

The Ministry of Health has been allocated RM32.4 billion for operating and development costs for next year, as announced in the budget, the second highest budget expenditure behind RMB 52.6 billion. ringgit from the Department of Education for the coming year.

The government has also allocated an additional RM 4 billion specifically for the fight against Covid-19, RM 2 billion will be spent on vaccination programs while an additional RM 2 billion will be used to increase the capacity of public health facilities and purchase medical supplies such as personal protective equipment and health kits. .

In comparison, PH had also suggested a similar figure of at least RM 4 billion to be channeled to the Ministry of Health to increase its capacity in terms of patient care, manpower, contact tracing capacity. , subsidy of Covid-19 test kits and improvement of quarantine. , among other measures.

In this regard, the two budgets had responded to the urgent need to strengthen the public health system after nearly two years of fighting the pandemic.

As a further measure to promote a healthy lifestyle, the government has also announced excise duties on gel-based liquid e-vaping liquids containing nicotine and sugary drinks in the form of a chocolate-based premix or of cocoa, malt, coffee and tea.

Green initiatives

PH had also suggested that the government strengthen the Green Technology Funding Program (GTFS) 3.0 to boost public and private green projects.

This includes increasing the size of the GTFS to RM 10 billion for the next two years (2022-2023), with green interest grants of RM 200 million supported by the government each year.

PH has also suggested that the government allocate 1,000 suitable government buildings and premises for energy efficiency and renewable energy retrofit projects.

In contrast, the government announced the Voluntary Carbon Market (VCM) program under the BNM to encourage sustainable practices where RM 1 billion has been allocated.