Live-blogging Budget 2012

If my internet connection holds up, I’ll be posting updates on the budget during the PM’s speech (yeah I know, I should be on twitter). So stay tuned to this page.

I’ll also be cross-posting to my Facebook page (the link’s on the right), so you might want to follow-up through there.

• 4.00pm Speech has begun
• FDI up 6x in 2010, fastest in ASEAN (but remember it’s coming off a low base)
• Investment expected to increase further in 2012
• GDP RM28,700 per capita income expected for this year
• Private consumption expected to be higher in the second half of the year
• Forecast of GDP growth for this year lowered to 5%-5.5%
• 2012 forecast 5%-6%
• RM232 billion expenditure for 2012
• That’s only a slight increase over this year’s
• Fiscal deficit at 4.4%?
• PFI’s mentioned again
• 5 main focus for this budget
• RM978million for the economic corridors
• Incentives for MNC treasury centres; 70% tax relief for 5 years; reduced withholding tax
• Incentives for KLFID; income tax free for ten years; capital allowances accelerated; 70% income tax relief for the developers
• ETFs to be introduced
• Felda Global Ventures to be listed next year
• Felda settlers to get windfall TBA
• Tax incentives for REITs extended 5 years to 2017
• Entrepreneurs: 2nd chance through SME revitalisation fund RM100 million
• Natural disaster fund for SMEs
• Green technology: full import and excise duty relief for hybrid cars extended to 2013
• tourism - RM472 million for developing Langkawi
• Investment in new 4 and 5 star hotels given pioneer status
• Healthcare Tourism Council to be set up
• RPGT raised 10% for 2 years, 5% for 2-5 years, none after that
• 2012 declared National Innovation Year?
• Various programs to encourage innovation. How effective will this be? Doesn’t sound like much
• RM500 million fund for commercialisation of innovation
• IF YOU WANT TO FOLLOW THE SPEECH LIVE TRY HERE
• RM50.2 billion in total for education
• RM100 million each for C, T, religious schools and MRSM
• Schools fees in the national system abolished!
• tax relief for donations to schools
• Also for all places of worship
• RM100 million fund for opening professional firms in rural areas (4% interest)
• Rural Transformation Program - funding for water electricity and roads
• RM500 million for rural water?
• exit program for underperforming civil servants
• New salary structure: up to 40% for certain grades
• Annual increments to be increased as well
• Pensioners to receive adjustment, and 2% increments to be started in 2013
• Cumpulsory retirement age raised to 60 from 58
• 5000 masters and 500 doctoral scholarships for civil servants taking part time postgraduate education
• One-off payment of RM3000 to 4,300 contract workers
• One-off payment of RM3000 to ex-members of special and auxiliary police, including widows and widowers, covering 62,000 people – ooooh handouts
• Various programs to encourage expansion in domestic food supply – someone thinking long term here
• Really rubbing it in about the level of subsidies RM2.3 billion for food, RM17 billion for petrol and gas, total at RM33.2 billion

Real apologies, but I have to sign off now. I’ve been called for a meeting. With luck I’ll be able to continue or provide a wrap up afterwards!

Thanks for stopping by!

• Woot! I’m back online.
• Housing - My First Home Scheme limit raised from RM220,000 to RM400,000 beginning next year, Pr!MA to construct homes for middle-income level; subsidies under RMR program for low cost housing
• Expats allowed to withdraw from EPF for housing loans
• SARA 1Malaysia program for households under RM3000 per month. Unit trust investment
• Lots of incentives and help for taxi drivers
• Amanah Ikhtiar to provide RM2.1 billion for microfinance; including RM100 million each for Malaysian Chinese and Malaysian Indian entrepreneurs
• Free HPV vaccination (US doesn’t even allow this)
• Senior citizens get free healthcare in public hospitals and 50% discount on monorail and LRT systems
• Employee EPF contribution raised from 12% to 13% (higher labour costs!) for employees earning under RM3000
• RM1 billion for flood mitigation
• Handout time! RM500 for households with monthly income under RM3000 (this is a lot more ambitious than Pakatan’s proposal)
• School assistance of RM100 and RM200 book vouchers
• Civil Service: Bonus of one month at a minimum of RM1000
• Allowances and benefits for MPs to be revised! Even got handouts for Parliament

And that's a wrap. Not too many surprises - seems quite a bit leaked beforehand (e.g. the civil service pay rise), RPGT was lower than expected, and of course, no tax cuts. No mention of GST either. Is this an election budget? Sure seems like one. I'll need to review the numbers first, but there's no breaking the bank here.

Technical Notes:

The budget speech and appendix are available for download.