Budget 2017: Notable Points and Analysis

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Shopping mall employee Nur Aini Raihan Shamsudin, 26, watches Prime Minister Datuk Seri Najib Tun Razak table Budget 2017 in Parliament ‘live’ on her mobile phone in Bukit Mertajam, Penang on Oct 21. — File photo

Shopping mall employee Nur Aini Raihan Shamsudin, 26, watches Prime Minister Datuk Seri Najib Tun Razak table Budget 2017 in Parliament ‘live’ on her mobile phone in Bukit Mertajam, Penang on Oct 21. — File photo

FIRSTLY, I must applaud the government for a very well-balanced budget for 2017. Faced with challenges domestically and globally, the ruling coalition has prudently come up with a framework that would – in theory and hopefully, in practice – address these problems without significant sacrifices.

As a young urbanite, Budget 2017 benefits me tremendously in many different areas. I believe it has the potential to improve my overall quality of life. I shower particular praise on the proposal to increase fixed-line Internet speeds for the same price. Specifically, exciting would be the plan to double Internet speeds and halve prices within the next two years. In line with my media consumption habits and volume, app usage and connectivity needs, the government has shown foresight to make it easier for me to stay connected, faster and cheaper.

Additionally, I support the move to introduce the lifestyle tax relief as it greatly supports my way of life in the city. The lifestyle tax relief combines previous existing tax reliefs – the purchase of reading materials, computers and sports equipment – with new items such as the purchase of printed newspapers, smartphones and tablets, Internet subscriptions as well as gym membership fees. The relief is given up to the threshold of RM2,500 per annum.

The government appears to be considerate, sensitive and observant towards the lifestyle preferences and requirements of urbanites. As compared to suburban and less developed areas, urbanites have to rely on indoor gymnasiums for exercise due to convenience and air-quality. On top of that, Internet subscriptions and handheld devices are essential to life in a city, therefore assistance to this end is also greatly appreciated. This tax relief is realistic and correlates with the priorities of millennials.

As a millennial, I am greatly encouraged at the proliferation of employment opportunities that will be ushered in as a direct consequence of this budget. For instance, a lot of funding will be channelled into developing and supporting SMEs and start-ups. As an overarching effort, the government has declared that 2017 will be the Startup & SME Promotion Year in line with the role of SMEs in significantly contributing to nation’s growth and labour market.

In order to promote the development of SMEs, the government will allocate a total of RM75 million to implement programmes under SME Master Plan. Concurrently for start-ups, a total of RM200 million from the Working Capital Guarantee Scheme (WCGS) Fund will be specifically allocated. As of 2016, SMEs hire 65 per cent of the Malaysian workforce and contribute to 36 per cent of the country’s Gross Domestic Product (GDP).

This is good news for the job market as SMEs and start-ups can stimulate economic growth and cater to an increasingly large university graduate population eyeing white-collar work. Empowering SMEs will mean a more prosperous country for me to live in and more employment opportunities for me personally, as well. Apart from empowering SMEs, the government has made it easier for companies across the board to do business by offering lower corporate incomes taxes specifically for the year of assessment 2017 and 2018. Promising developments for our job market and economy, no doubt.

One of the biggest wins from the budget for me was the government’s strong emphasis on affordable housing. As a young urbanite whose parents don’t own property in the city, it was incredibly unlikely that I’ll be able to afford to buy my own home in the near future as Malaysia’s home prices in cities are amongst the most unaffordable in the region, according to expert opinion and research. As a potential home buyer faced with a severely unaffordable housing market and deeply depressed wages, I was at a complete lost for options. Fortunately, Budget 2017 has shown strong government awareness of the issue and more importantly, showcases substantial action being taken to alleviate these problems.

The government plans to tackle issue through two main approaches: access to financing and loans as well as flooding the market with low cost and affordable homes. Firstly, the government plans to make it easier for first-time homebuyers to access financing options to purchase their first house. A new special step-up end-financing scheme for the Pr1ma programme was announced. Through this special scheme, financing will be easier and more accessible to the buyers with total loan up to 90 per cent to 100 per cent with the loan rejection rate to be reduced drastically. In addition, the stamp duty exemption will be increased to 100 per cent on instruments of transfer and housing loan instruments, to help reduce the cost of first home ownership, compared to 50 per cent at present.

Secondly, the government is committed to building more homes which are affordable and located in strategic locations. The last point is very important as affordable housing usually means the houses are located in less-than-prime areas but having reasonable houses in prime locations available for public purchase.

Now that’s a game changer.

In conclusion, the Budget 2017 presentation might be flawed in some respects (for instance, the 20 per cent cut on funding for local universities) but generally, it’s a very well-conceived and holistic budget. From supporting less affluent communities to stimulating economic growth, the government has shown tact and wisdom in devising a blueprint to drag our country out of economic quagmire and into greener pastures, riding on the back of expected growth of the digital economy and Islamic banking. Indeed, we are on the up.

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