Key highlights of Budget 2020: Live updates

Here are the key highlights for Budget 2020 and it’s four thrusts. 

Minister of Finance Lim Guan Eng tabled the much anticipated Budget 2020 in parliament. This is the second budget tabled by the Pakatan Harapan Government after it came into power in May 2018.

The budget carries the theme “Shared prosperity: Sustainable and inclusive growth towards a high-income economy”. It focuses on:

1. addressing income and wealth disparities in our society
2. creating a more aggressive and more participatory higher value economy
3. establishing Malaysia as one of Asia’s economic pillars.

This is to reflect the Shared Prosperity Vision 2030 which is to raise Malaysians’ living standard to a decent level.

According to Lim Guan Eng in his foreword of the Economic Outlook 2020, the economy is expected to grow at 4.8% in 2020 compared to 4.7% in 2019. He also stressed that there will be no return to the Goods and Services Tax (GST).

On the other hand, construction is targeted to grow from 1.7% to 3.7% from affordable housing and mega projects.

These are the highlights of Budget 2020:

Budget 2020 four thrusts

1. To boost  economic growth in the new economy and the digital era
2. Investing in people
3. To have a united population that is inclusive and fair
4. To fix public institutions and finances

Budget 2020 allocations

• RM 297 bil is allocated for Budget 2020 which is less than Budget 2019’s allocation of RM 314.5 bil
• RM 241 bil for operational expenditure
• RM 56 bil for development of expenditure
• RM 64.1 bil for education
• RM 37.8 bil for finance
• RM 30.6 bil for health

Budget 2020 highlights

Housing

• RM 10 bil has been allocated for the Rent to Own Programme. This is for the first time home buyers who cannot afford a 10% downpayment for homes priced up to RM 500,000. The government will provide stamp duty exemptions on the instruments of transfer between the developer and financial institution, and between financial institutions and the buyer in this scheme.
• Decreased of the threshold for foreign buyers to RM 600,000 from RM 1 mil for urban properties. This is an initiative by the Government to address the unsold housing issues.
• The BSN Youth Housing Scheme is extended until 2021.
• RM 10 mil has been allocated for public housing repair and refurbishment.
• The Bandar Malaysia project in Sungai Besi will continue. It will encompass Taman Rakyat with an additional of 5,000 affordable housing units.
• The base year for the Real Property Gains Tax (RPGT) to be revised to January 1, 2013 for assets acquired before the date from January 1, 2000 previously.

READ: Home Ownership Campaign (HOC) 2019 extended by another 6 months! Here’s what homebuyers should know

Tax

• No reintroduction to GST
• Malaysia’s top income earners (more than RM 2mil) will be taxed at 30% for personal income tax.
• RM 6,000 income tax exemption on serious medical treatment is extended to cover fertility treatments.

Digital

• Broadband prices have been lowered by 49% and 3 times faster speeds.
• MCMC will allocate RM 250 mil to enhance broadband connectivity to the interior of Malaysia, mainly Sabah and Sarawak.
• Utilising fibre optic and 5G infrastructure to promote more digital application pilot projects (RM 25 mil).
• RM 210 mil to boost digital infrastructure in schools and high impact areas.
• RM 20 mil allocated to MDEC to promote local talent in producing digital content.
• RM 20 mil has been allocated to boost the development of eSports.
• A one-off RM 30 package to encourage the use of e-wallets to qualified Malaysians aged 18 and above with annual income less than RM 100,000.
• The Digital Service Tax will be effective starting January 1. This will apply to online streaming services like Netflix, Spotify, Google digital advertising as well as digital software and game distribution companies like Steam.

People

• Creating 33, 000 job opportunities a year for women between 30 and 50 years old who have stopped working for a year or more.
• Women who return to work will be given RM 500 a month for two years as a salary incentive while RM 300 will be given to the employer in the same period.
• Women who return to work will be exempted from income tax until 2023.
• RM 30 mil will be spent by the government to build more daycare centres at government premises like hospitals and schools.
• Maternity leave to increase from 60 days to 90 days
• Overtime increase for those who earned less than RM 4,000.
• The minimum salary is increased to RM 1,200 in main areas.

Infrastructure  

• RM 587 mil for water supply upgrade with RM 470 mil allocated to East Malaysia. This is to improve the infrastructure in rural areas.
• 300,000 households will benefit from the RM 500 mil allocation for the outside town electric supply projects.
• RM 1 bill will be allocated to improve roads nationwide.  RM 325 mil has been allocated for Sabah while RM 224 goes to Sawarak.

MORE: Penang Transport Master Plan 1 (PTMP 1) is now approved. Here are 6 things you need to know

Aids and financial allocations 

• RM 300 Bantuan Sara Hidup aid will be eligible for singles 40 years old and above and earning no more than RM 2,000 per month.  This is also eligible for disabled individuals aged 18 and above. They will also automatically receive the free insurance scheme, Takaful MySalam.
• RM 1.3 bil financial aid has been allocated fo Sarawak and RM 1.14 bil for Sabah.
• Special grants for Sabah and Sarawak will also increase to RM 53.4 mil and RM 32 mil respectively.
• RM 85 mil for Kampung Baru infrastructure building and repairs.
• 18% discount of average toll charges for all PLUS Highways.
• Second Penang Bridge toll to be reduced from RM 8.50 to RM 7.
• RM 450 mil for the introduction of 500 electric buses of various sizes in selected cities.
• Those who owned no more than two cars and two motorcycles are eligible to receive the fuel Targeted Subsidy Programme (PSP) but for only one vehicle. It also depends on the vehicle qualifying criteria.

For more Budget 2020 stories click here.