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Anwar announces RM386.14 billion budget for 2023

This is almost RM14 billion more than the budget tabled by his predecessor, Tengku Zafrul Aziz.

Nur Hasliza Mohd Salleh
6 minute read
Prime Minister Anwar Ibrahim, flanked by his deputy finance ministers Ahmad Maslan and Steven Sim, ahead of the budget presentation, Feb 24.
Prime Minister Anwar Ibrahim, flanked by his deputy finance ministers Ahmad Maslan and Steven Sim, ahead of the budget presentation, Feb 24.

Prime Minister and Finance Minister Anwar Ibrahim today announced a total allocation of RM386.14 billion in his administration's first national budget, almost RM14 billion more than the RM372.3 billion set aside in the budget tabled by his predecessor Tengku Zafrul Aziz just three days before Parliament was dissolved to pave the way for the general election last year.

Anwar's budget speech today also marked his first since 1997, a year before his dramatic sacking by then prime minister Dr Mahathir Mohamad, who later took over the finance portfolio to implement wide-ranging and non-conventional measures in the face of the Asian financial crisis.

Today's budget, themed after Anwar's Malaysia Madani slogan, saw RM289.1 billion allocated for operations and RM99 billion for development including RM2 billion in contingency savings. 

The education ministry remained the top recipient of funds with an allocation of RM55.2 billion compared to RM52.6 billion in 2022. 

The health ministry came in second place with RM36.3 billion compared to RM32.4 billion last year. 

Anwar also announced RM18.5 billion for the home ministry and RM17.7 billion for the defence ministry. 

The higher education ministry meanwhile was allocated RM15.3 billion compared to RM14.5 billion in 2022.

Other major points include:

- 2023 fiscal deficit reduced from 5.6% in 2022 to 5%

- Fiscal responsibility bill to be tabled in Parliament this year

- Greater distribution of Amanah Saham Bumiputera dividends for those in need

- Electricity tariffs maintained for domestic consumers and SMEs but raised for large companies excluding the food and agriculture sector

- No decision yet on bringing back goods and services tax

- Plans to introduce luxury goods tax this year with value limits according to type of good, e.g. luxury watches and fashion items

- Possible introduction of capital gains tax for the disposal of unlisted shares by companies from 2024 at a low rate

- Plans to impose exise duty on liquid or gel products containing nicotine used in electronic cigarettes and vape devices

- Support for generational endgame initiative with half of the revenue from excise duty to be allocated to health ministry 

- Tax rate on taxable income for micro, small and medium enterprises for the first 150 thousand to be reduced from 17% to 15%, beginning assessment year 2023. 

- RM50 million allocation for the construction and upgrade of 3,000 stalls and kiosks for small hawkers

- RM176 million for the upgrade of premises and business facilities under Mara, DBKL, Perbadanan Usahawan Nasional Bhd and Perbadanan Pembangunan Bandar 

- Loan facilities and financing guarantees for the benefit of micro, small and medium enterprises with a total value of up to RM40 billion

- Nearly RM10 billion in loan funds for SMEs provided by Bank Negara Malaysia

- Six flood mitigation projects to be retendered by June 2023

- New Industrial Master Plan 2030 to be announced in Q3 2023 to outline the direction of industrial development, focused on high quality activities and the recruitment of local talent

- Tun Razak Exchange mandated as Malaysia's international financial hub

- Plans to amend and table the Whistleblower Protection Act this year

- Allocation of RM1.2 billion to complete repairs on 400 clinics and 380 schools in dilapidated condition

- RM2.7 billion to maintain and upgrade federal roads

- RM1.5 billion to upgrade and build new rural roads

- Creation of special task force on agency reform, chaired by the chief secretary

- RM10 million to strengthen the role of the National Scam Response Centre through operating grants

- Bank Negara Malaysia to enforce "kill switch" policy for all banking institutions to allow users to immediately freeze ther accounts including ATM cards in the event of suspicious activity

- Government to amend Insolvency Act 1967 to allow bankruptcy cases to be automatically discharged at short notice

- Cases involving debt of less than RM50,000 that meet the necessary conditions to be immediately released from March 1

- Establishment of a special team under police D11 to combat child pornography activities

- Creation of Child Development Department under the Social Welfare Department

- Government to enact Consumer Credit Act and establish a consumer credit monitoring board to regulate credit businesses

- Socso to provide incentives to employers who employ 17,000 TVET graduates of RM600 per month for three months on top of salary offered, through an allocation of RM45 million

- Further Socso incentives for employers who employ workers from vulnerable groups such as the disabled, former prisoners, the homeless and the chronically unemployed, of up to RM600 per month for a period of up to three months

- Government to cover training fees of up to RM4,000 for gig workers to enrol in micro credentials skills improvement programmes

- Socso to provide RM300 allowance for three months to replace income of gig workers who are active and undergoing training programmes 

- RM50 million in matching grants to encourage the automation of the plantation sector through the use of robotics and AI that can employ skilled local workers

- RM80 million to improve the sustainability of the palm oil industry and intensify the campaign to tackle anti-palm oil sentiments

- RM250 million for the promotion of tourism

- RM725 million to implement digital connectivity in 47 industrial areas and nearly 3,700 schools

- RM50 million to Melaka and Penang to preserve world heritage sites recognised by Unesco

- RM750 million for the economy ministry to implement the People's Income Initiative to empower the poor to increase their income potential

- Aid and facilities for the lower income group to be given on a monthly basis instead of in a lump sum

- RM64 billion in the form of subsidies, aid and incentives to minimise the cost of living through price controls, financial assistance and the provision of services

- RM100 million for the Jualan Rahmah initiative which offers basic goods at prices of up to 30% less than the market rate 

- Under Sumbangan Tunai Rahmah (STR) programme, households with an income of less than RM2,500 are eligible to receive up to RM2,500 depending on the number of children

- An additional RM600 for the poorest household recipients under STR, according to e-Kasih data, to be distributed in the form of food baskets and vouchers for basic food iteams

- RM200 e-Tunai Belia Rahmah credit for two million youths aged 18 to 20, involving a total allocation of RM400 million. 

- Bernas to share profits from rice imports by contributing 30% of net profit to rice farmers on top of RM60 million contribution provided

- Individual income tax rate for residents to be reduced by 2% for each income bracket from over RM35,000 to RM100,000

- Government to increase tax rate for those with high incomes from 0.5% to 2% for each income bracket of more than RM100,000 to RM1 million, in a move expected to affect fewer than 150,000 taxpayers

- RM30 million for collaboration with a number of state governments for the implementation of agro-food projects

- Development allocations for Sabah and Sarawak of RM6.5 billion and RM5.6 billion respectively

- Over RM2.5 billion to implement public infrastructure projects for Sabah and Sarawak involving streetlights and water and electricity supply

- Almost RM4.1 billion for the maintenance and purchase of assets for the Malaysian Armed Forces

- Nearly RM1 billion for agencies under the home ministry to strengthen domestic security including through the acquisition of more than 2,100 police body cameras

- Over RM500 million for the maintenance of armed forces quarters and the rehabilitation of residential quarters and institutions under the defence ministry

- RM20 million for sports, culture and arts programmes at the school and community level

- RM5 million for the National Athlete Welfare Foundation and tax deductions for employers who employ former national athletes

- RM25 million for cultural and artistic activities at the community level

- RM2.3 billion for infrastructure and learning facilities at schools

- RM777 million ringgit for the provision of food for students under the Supplementary Food Plan

- 50,000 laptops for schools and educational institutions under the education ministry

- RM3 billion for new permanent appointments and contracts for more than 1,500 medical, dental and pharmacy officers

- RM120 million for Madani Medical Scheme specifically for the poor to obtain treatment at clinics and private general practitioners

- Increase in tax relief limit for medical treatment expenses from RM8,000 to RM10,000

- RM50 million for local government development ministry to ensure a safe environment at People's Housing Projects (PPR) with a priority on replacing wornout lifts

- RM367 million for new PPR projects expected to benefit 12,400 residents

- Stamp duty exemptions for first-time owners with a full stamp duty exemption for houses worth RM500,000 and below and 75% exemption for houses worth RM500,000 to RM1 million

- Government to increase EPF savings contributions in Account 1 by RM500 for members between 40 and 54 years old with EPF savings of less than RM10,000 in said account, involving an allocation of nearly RM1 billion

- Special Aidilfitri aid of RM700 for civil servants Grade 56 and below, with RM350 for government retirees, to be paid in April