BUDGET 2010 - Review

AMOUNT ALLOCATION
A total sum of RM191.5 Billion is allocated which is 11.2% lower than the revised allocation for 2009 budget of RM215.7 Billion. Operating expenditure is RM138.3 Billion (72.2%) and Development expenditure of RM53.2 Billion (27.8%)


DEFICIT
The government estimates a lower deficit for 2009 at 7.4% .In 2010 the deficit is expected to be at 5.6% - But I still think the deficit for 2009 is closed to 8%


GDP
For 2009 GDP is envisaged at -3%. This is also in line with my estimate considering a constant -3.9% growth for 3rd quarter and 0.1% for quarter 4 2009. The government foresee a 2% to 3% growth in 2010.


CPI
The government foresee a 1.5% to 2.5% inflation. My forecast is 3%.


UNEMPLOYMENT

PM Najib expects unemployment to be less than 4%. My instinct says 4.5%


PER CAPITA INCOME & PURCHASING POWER PARITY
Per capita income of RM24,661 and purchasing power parity of USD 13,177


INCOME TAX

For Malaysians earning more than RM100,000 annually the taxable rate is reduced by 1% to 26%. Personal allowances increase from RM8,000 to RM9,000. Users of high speed broadband can claim up to RM500 on their receipts while those with Green Building Index status can claim a return for expenditure on green building.For Malaysians who buy annuity an extra RM1,000 can be claimed for relief under EPF and insurance.


CREDIT CARD
CHARGES
Annual fee of RM50 will be imposed on each credit and charge cards. For any supplementary card a fee of RM25 is levied. Too early to conclude if Malaysians will practice prudence spending.
I do not understand the worry because RM50 is so small compared to the salaries of those credit cards users.If you can have credit cards then you have to pay the annual fees.


EMPLOYEES PROVIDENT FUND EPF CONTRIBUTION
When Malaysia started to experience the impact of credit crunch, the government decided to lower the employees contribution to 8%. The government must be very optimistic about the 2010 economy that beginning 2010 the contribution will be increased to 11% again.
The setting up 1Malaysia Retirement Scheme to be administered by EPF is welcome because it will certainly benefit farmer with NO fixed income like me.


NEW INSURANCE AND TAKAFUL
By mid 2010 new motor insurance and takaful scheme will be set up to benefit low income Malaysians like me.


FINANCE
Commissions between agents and remisiers will be liberalised. The decision to introduce E Dividend scheme to shareholders is timely.
Malaysia as the biggest SUKUK (Islamic Bond) issuer will introduce more sukuks.


LIGHT RAIL TRANSIT

It is good that the government would spend large money for new LRT units. I took the LRT,KTMB and Express Rail Link trains on October 6th. The conditions were terrible. Squeeking noises and the units were hay wire as if the absorbers broke into pieces. Even the ticket machines were broken.LRT stations need more parking spaces too.


GOODS AND SERVICES TAX GST
The government is prepared to introduce GST in Malaysia after an in depth study. My question for a farmer like me can I charge gst if I sell my bananas?


FUEL SUBSIDY
PM Najib proposes a new fuel subsidy scheme using My Kad. Does that mean I have to show My Kad whenever I buy gas? I could foresee fraud.Even when I buy gas and use the petroleum company gift card my card was always been changed with someone else.There are potentials for identity lost if My Kad is used.


EDUCATION
Pre school education to be enhanced. Taska or kindergartens will be set up at government departments. This is a good idea because as more kindergartens are opened more graduate women can be employed thus they would shy away from their dreams to become artists and singers.
30 National Scholarships to be based on merit will be set up.I wonder what the proportion be like in 2010.......
PTPTN borrowers will be granted scholarship if they could obtain 1st class honors.


CONSORTIUM OF FELDA, FELCRA and RISDA

If the late Tun Razak set up FELDA (Federal Land Agriculture Authority) , FELCRA (Federal Land Cultivation and Research Authority) and RISDA (Rubber Industry Smallholders Development Authority) then PM Najib proposes a consortium of Felda, Felcra and Risda. I see this move as cost cutting measures because among these 3 agencies there are overlapping functions.


CONCLUSION
Overall this is an interesting budget. When time is hard then the most noble move is to reduce spending because revenue is also declining. But important areas such as education will continue receiving aids. Civil servants must understand the government financial ability that it could not pay bonuses but instead a sum of RM500 will be paid in December 2009. Despite H1N1 tourists continue to come to Malaysia.There are many places to see especially if you go to MELAKA.
"WHERE IT ALL BEGAN"