Highlights of Budget 2018
FocusM team 27 Oct 2017 18:50
  • The economy continues to grow positively. For the first half of the year, a growth of 5.7% was recorded. World Bank has raised its 2017 GDP projection for Malaysia to 5.2% from 4.9% previously. Country’s fiscal deficit projected to decrease to 2.8% in 2018; expected at 3% for 2017.


  • Malaysia's target of 3.3 million new job opportunities by 2020 is on track as 69% or 2.26 million jobs have been created.


  • As of August, the value of Malaysia’s exports was the highest ever at RM80 bil, representing a double-digit growth.


  • Per capita income expected to reach RM42,777 by 2018. Currently at RM40,713. Monthly median earnings increased to RM5,288 in 2016, from RM4,585 in 2014.


  • Bottom 40% population (B40) monthly household income has increased to RM3,000 per month in 2016 from RM2,629 in 2014.


  • Total allocation for Budget 2018 at RM280.25 bil, up 7.5% (2017: RM260.8 bil).


  • Federal revenue collection expected to reach RM239.86 bil in 2018.


  • Total investment in the country expected to grow by 6.7%.


  • Private investment expected to reach RM260 bil in 2018, in line with the goal of making the private sector the engine of growth.


  • Total allocation for Budget 2018 at RM280.25 bil, up 7.5% (2017: RM260.8 bil).


  • Federal revenue collection expected to reach RM239.86 bil in 2018.


  • RM7 bil allocated under the Business Financing Scheme.

  • RM5 bil for working capital and RM2 bil loan with 70% government guarantee for the services sector.


  • Shariah-compliant SME Financing Scheme increased to RM1 bil, bringing the fund size to RM2.5 bil. There will be a 2% subsidy on profit rate.


  • RM200 mil allocated for training, grants and easy loans under SME Corp. Almost RM82 mil allocated for industry development and halal products in various agencies.


  • RM500 mil allocated to TEKUN Nasional (agency under Ministry of Entrepreneurial and Cooperative Development) for micro entrepreneurs.


  • RM80 mil allocated under the Rural Economy Financing Scheme through Bank Rakyat and SME Bank, providing financing facilities for rural Bumiputera entrepreneurs. 


  • RM150 mil allocated to MATRADE, MIDA and SME Corp to promote and expand export markets, including the Market Development Grant.

  • RM1 bil allocated to EXIM Bank for insurance protection credit and RM200 mil for credit facility financing for SME exporters.


  • RM100 mil provided as a loan with 70% government guarantee to automate the production of local furniture for export purposes.


  • For the first time, RM6.5 bil is allocated to assist farmers, fishermen, smallholders and rubber tappers. RM2.3 bil will be given as aid and incentives such as fertilisers.


  • RM1 bil to be allocated to venture capital investors in selected priority sectors coordinated by the Securities Commission.


  • RM90 mil allocated to the MyBrain programme for 10,600 people to pursue further studies at masters and doctorate levels.


  • RM550 mil allocated to the Special Improvement and Maintenance Fund for schools.


  • RM2.9 bil allocated for food assistance, textbooks, grants and small federal scholarships. RM328 mil allocated for the continued support of students from low-income households, with RM100 per student, benefitting 3.2 million students.


  • PTPTN loan repayment discounts extended to Dec 31, 2018. The grace period for repayment of loans is extended to 12 months after graduation, from the current six months.


  • The government will establish a National Rail Centre of Excellence to support the development of skilled workers in the rail industry.


  • Government to take steps to ensure that a company board has at least 30% women directors by end-2018.


  • RM2 bil allocated for the Pan Borneo Highway. For Sarawak, all 111 construction packages have been awarded, while five out of 35 Phase 1 packages in Sabah have been awarded.


  • RM1 bil allocated to MCMC to develop communications infrastructure and broadband facilities in Sabah and Sarawak.

  • RM934 mil allocated for rural road projects, including almost RM500 mil for Sabah and Sarawak alone.


  • Proposal for mandatory maternity leave for the private sector increased to 90 days from 60.


  • Under MDEC, Rm100 mil will be used to extend the eRezeki, eUsahawan and eLadang programmes.


  • Individual income tax rates will be reduced by 2% for those with chargeable income of between RM20,000 and RM70,000. New tax rates for three income brackets as follows: RM20,001 to RM35,000 (3%), RM35,001 to RM50,000 (8%), and RM50,001 to RM70,000 (14%).


  • Total subsidy for goods and transport, cooking gas, flour, cooking oil, electricity and toll is RM3.9 bil.


  • RM27bil allocation to improve healthcare, including RM1.4 bil to upgrade and maintain health facilities, medical equipment and ambulances.


  • RM245 mil grant provided under the Domestic Strategic Investment Fund to upgrade smart manufacturing facilities.


  • RM83.5 mil will go towards the development of Phase One of Digital Free Trade Zone in Aeropolis KLIA.

  • Tax exemption on stamp duties for Exchange Traded Funds (ETFs) and structured warrants for three years, effective Jan 1, 2018.


    • Alternative Trading System to be introduced for the capital markets for more efficient transactions.


    • 2020 declared Visit Malaysia Year. Tourist arrivals in 2018 estimated to hit 28 million (2016: 26.76 million).


    •  RM2 bil for SME tourism fund and RM1 bil as soft loan for Tourism Infrastructure Development Fund.


    • RM32 bil for MRT2 Line (Sungai Buloh-Serdang-Putrajaya), spanning 32km.


    • On-going West Coast Highway linking Banting in Selangor to Taiping in Perak estimated to cost RM5 bil.


    • RM3 bil for Transportation Development Fund.


    • Upgrading of Penang and Langkawi International Airports.


    • RM41 bil in GST collected so far this year.

Five robust states in Malaysia

RAM Ratings ranks Selangor, Sarawak, Perak, Johor and Penang as robust.

The palm oil, rubber economic & investment mission

Palm oil, rubber economic & investment mission to North Africa and Colombia 21-29 September 2018