KUALA LUMPUR: The government has allocated RM393.8 billion for the 2024 Malaysia Madani Budget, the highest amount ever being tabled involving RM303.8 billion for operating expenditures, RM90 billion for development and RM2 billion for contingency fund.
Prime Minister, Datuk Seri Anwar Ibrahim who is also the Finance Minister said, the budget theme “Madani Economy: Empowering the People” is an important policy and comprehensive besides stimulating the economic growth and helping the people.
“This budget also involves the additional ceiling of the 12th Malaysia Plan amounting RM15 billion that makes the grand total to RM415 billion for the period of five years.
“This additional allocation shows that the government practices “expansionary fiscal stance” even though at the same time responsible to reduce the fiscal deficit in stages,” he said when tabling the 2024 Malaysia Madani Budget in Dewan Rakyat here on Friday.
Anwar said, the larger operating expenditures (OE) next year comes on the back of expectations that the government revenue will increase to RM307.6 billion from RM303.3 billion this year.
The fiscal deficit is also expected to be reduced to 4.3 per cent in 2024 up from 5.0 per cent this year as the government targets the economy to grow 4.0-5.0 per cent next year.
The Finance Minister also announced that there will shift from a blanket subsidies to a system to help the lower income groups.
The Tambun Member of Parliament also stressed that the subsidised good help the people to minimise the cost of living but the subsidies benefit the rich more and low prices have increased wastages and smuggling out of the country.
He added, savings from subsidy cuts will be channelled to increase cash aid for the needy, given under Rahmah Cash Aid scheme from RM8 billion to RM10 billion in total.
The subsidised diesel will still be enjoyed by logistic companies and certain groups and other users will have to pay a higher price as part of the government’s plans and restructure subsidies for the fuel.
The government is now paying RM1.60 for every litre of diesel to cap the price at RM2.15 per litre.
“Inflation is expected to go up following the removal of some subsidies. The government expects inflation at 2.1 per cent to 3.6 per cent in 2024 compared with this year’s estimate of 2.5-3.0 per cent.
“A number of taxation reform measures will be implemented next year to expand the country’s revenue base and at the same time not burdening the majority of the people,” Anwar said.
He added, the tax collected by the government is the lowest in ASEAN at 11.8 per cent of gross domestic product compared to Singapore 12.6 per cent and Thailand 16.4 per cent.
The government he said plans to increase the service tax rate to 8.0 per cent from 6.0 per cent. However this does not include services such as food and beverages and telecommunications.
“The scope of taxable services will also be expanded to logistic services, brokerage, underwriting and karaoke.
“E-invoicing will be mandatory for tax payers with income or annual sales exceeding RM100 million from 1st Aug.2024,” he said.
According to Anwar, the government has also decided to ease the current conditions for Malaysia My Second Home applications to boost the arrival of foreign tourists and investors.
The Finance Minister said, the 2024 Budget is a statement of the government’s commitment to revitalise the economy in the challenging environment.
Meanwhile the Deputy Prime Minister, Datuk Seri Fadillah Yusof said, both Sabah and Sarawak get an increase of yearly grants to RM6.5 billion and RM5.5 billion respectively in the 2024 Budget.
He said, the government initiatives must be delivered efficiently to ensure all allocations are spent for the intended purpose.
“We need to focus on the implementation. If money is being allocated but if the implementation is inefficient the allocation will not reach the people,” he said at the Dewan Rakyat lobby here today.
In the 2024 Budget among others, the government agreed to raise the rate of Special Interim Grants for Sarawak and Sabah to RM300 each compared to previous RM16 million for Sarawak and RM125.6 million for Sabah which was last reviewed in 1969 and 2022 respectively.
Anwar also announced that the Federal government would continue to support Sabah in strengthening the electricity supply industry through subsidies to Sabah Electricity Sdn. Bhd. supply industry (SESB) and would support the implementation of solar-hybrid energy generation and the construction of electricity transmission networks in southern Sabah.
The government would also support the Sarawak state government to build a Cancer Institute in the state and the government is in negotiations to transfer the Bintulu Port and the operation of rural air services to the state government. –Malaysia World News