SPEECH BY
YAB DATO’ SRI MOHD. NAJIB TUN ABDUL RAZAK
DEPUTY PRIME MINISTER AND
MINISTER OF FINANCE
IN INTRODUCING
THE SUPPLEMENTARY SUPPLY (2009) BILL 2009
IN THE DEWAN RAKYAT
10 MARCH 2009
Mr. Speaker Sir,I beg to move the Bill intituled “An Act to apply a sum from the Consolidated Fund for
additional expenditure for the service of the year 2009 and to appropriate that sum for
certain purposes for that year” to be read a second time.
2. This Additional Operating Allocation for the year 2009 is tabled in accordance with
Article 100 and 101 of the Federal Constitution, for the approval of expenses not provided for
or not fully provided for in 2009 Budget, which was approved by this august House.
3. The impact of the current global economic crisis, which originated from the sub-prime
financial turmoil in the United States (US) in mid-2007, has since widened and deepened.
After almost two years into the global financial crisis, we are yet to see signs of stability in the
financial sector or recovery in the advanced economies. In fact, more than half the major
world economies, in particular the US, the euro area and Japan, are in recession and
experiencing the worst economic contraction since the Great Depression of the 1930s.
4. Although developed countries have announced large economic stimulus packages
exceeding USD3 trillion, including substantial amounts to bail out their financial institutions
and large corporations, these measures have yet to restore consumer and investor
confidence. The latest statistics indicate that the unemployment rate in the US is at 8.1%, the
highest since 1983.
5. These negative developments have already impacted our economy in the fourth
quarter of 2008. Exports and industrial output have deteriorated and investments declined.
Consumer sentiment has also been adversely affected. As a result, Gross Domestic Product
(GDP) growth was significantly lower at 0.1%, compared with an average of 6.3% in the first
9 months of the year. The decline was mainly due to the contraction in export value of 13.4%.
The fall in exports has adversely affected economic growth, particularly the manufacturing
sector, which contracted 8.8%.
Read more below, as available for download and/or print:
- What your say? How can this RM60-Billion economic stimulus plan affect you, your neighbors, your areas or your state too?
- How can it be improved, or made more efficient?
From YAB Dato' Seri Mohd Najib bin Razak:
Moments ago, I had just tabled the Second Stimulus Package, otherwise known as the Mini-Budget, at Parliament. For the benefit of my fellow Malaysians, I have included here a summary of the package in the Learn section.
For many of you who have shared your thoughts and suggestions, thank you once again. Some of them have indeed been incorporated or included as a hybrid from your original ideas. Once again, I must ask everyone, as One Malaysia, to set aside our differences and work together in the same direction. Our collective effort and hard work will be pivotal in overcoming this economic hurdle and shaping a stronger nation.
The summary from 1malaysia.com.my:
Mini Budget
March 10, 2009
• The Mini Budget of RM60 billion, the biggest ever stimulus package unveiled by the government, accounting for 9 per cent of the GNP will be implemented over two years – 2009 and 2010.
• Of the total:
1. RM15 billion is fiscal injection,
2. RM25 billion guaranteed fund
3. RM10 billion equity
4. RM7 billion PFI and Off-budget
5. RM3 billion in tax incentives• This is in addition to the RM7 billion first stimulus package announced on Nov 4, 2008 and the RM206 billion budgeted for 2009.
• The Mini Budget or the second stimulus package has been necessitated by the worsening of the global economy. The IMF has revised its forecast for the world economy downwards from 2.2 per cent to 0.5 per cent for 2009.
• Many countries are already in recession. The US is forecast to register negative 1.6 per cent growth this year; UK negative 2.8 per cent; Japan negative 2.6 per cent.
• South Korea, Taiwan and Singapore are already in recession and the forecast for this year is negative – South Korea (-4 per cent), Taiwan (-4 per cent) and Singapore (-4.9 per cent). Singapore’s Minister Mentor Lee Kuan Yew is reported that the island state’s economy could record a -10 per cent.
• India and China, will see their growth moderate to 6.7 per cent and 5.1 per cent respectively – positive growth but considerably slower.
• Malaysia’s growth in 2009 will be between -1 per cent to positive 1 per cent. This is down from the 3.5 per cent forecast earlier which is not sustainable due to the deteriorating global economy.• Four factors contribute to the slower growth:
1. Malaysia’s open and trade dependent economy affected by the decline in global demand. In January, for example, exports fell 27.8 per cent.(Malaysia highly trade dependent trade as ration to GDP to the tune of 200 per cent) 2. Commodity prices declined sharply especially oil and gas and palm oil. 3. Foreign Drect investment (FDI) flows expected to decline by almost 50 per cent – RM26 billion in 2009 against RM51 billion in 2008, and 4. Fall in the stock market which has a negative impact on the services sector and adversely affects consumer and investor sentiments. • With the increased stimulus package, the budget deficit will rise to 7.6 per cent in 2009, an increase from 4.8 per cent. It is still lower than the high of 16 per cent recorded in 1982. High liquidity in the domestic market will help finance the deficit and it will not crowd out the private sector.
• Four main budget strategies:
1. Reduce unemployment and increase job opportunities (RM2 billion allocation from the RM60 billion) 2. Reduce the rakyat’s burden and impact on the vulnerable (RM10 billion) 3. Assist the private sector (RM29 billion), and 4. Build capacity for future growth (RM19 billion) • Implementing the strategies:-
- 163,000 training and job opportunities in both public and private sector. Training programmes to be implemented by government agencies, the private sector including GLCs and private training institutions. - Eight different training programmes have been identified. - Tax exempt for companies that employ workers who have been retrenched including those whose services were terminated via VSS - Government to recruit 63,000 employees and contract workers - Opportunities for higher education with financial assistance - Reducing dependence on foreign labour
• Reducing the rakyat’s burden and impact on the vulnerable:
- Government committed to eradicating hard core poverty by 2010. - Government subsidy totals RM34.1 billion or 22 per cent of operating expenditure in 2008. Of this RM18.1 billion is oil subsidy, RM6 billion in the form of assistance for students, the vulnerable and poor, RM3 billion in food subsidy and RM7 billion other forms of assistance. - Government allocated RM674 million in subsidy to check price increase of essential food items, e.g. bread, sugar and flour and another RM480 million to prevent a hike in toll rates. - Without government subsidy sugar price would be higher by 47 sen a kilo; flour 60 sen a kilo higher and bread 26 sen higher for a 400 gramme loaf. - Government set aside RM27.9 billion in 2009 for various subsidies. - Assist house buyers with tax relief on interest payment - Improving public infrastructure - Enhancing and improving education facilities, including the national, Chinese, Tamil and mission schools - Micro credit facilities for fishermen and farmers - RM5 billion savings bond (syariah based) with 5 per cent return a year, payable every quarter. Minimum investment of RM5,000 and maximum of RM50,000.
• Assisting private sector in facing the crisis:
- RM5 billion fund for working capital guaranteed by government - Fund to assist companies to restructure and promote green technology - Easier access to capital market – SC to reduce time-to-market and assist companies to raise funds more efficiently and cost effectively. SC to introduce six different measures for this purpose. - Reducing cost of doing business - Attracting High Net Worth individuals and professionals - Support for the automotive and aviation industries and boost for tourism industry.
• Building capacity for future growth:
- RM5 billion restructuring fund – Government guarantee for those companies who embark to increase their productivity, high value added and application of green technology. Maximum loan of RM50 million over 10 years. - Additional RM10 billion available to Khazanah for investments over two years in domestic industries with high impact and to generate new employment - Off budget projects valued at RM5 billion identified including LCCT at KLIA, Penang Airport expansion, High Speed broadband and covered walkway in golden triangle. - PFI: The government to assist private sector and provide the “tipping point” for private sector initiative. - Liberalising services sector to attract more investments, expertise and strengthen competitiveness of the sector which currently accounts for 55 per cent of GNP and has potential to increase contribution to 70 per cent as in developed nations. - FIC to adopt more liberal approach to attract more foreign investments. Government working on new guidelines for FIC. - Strengthen and stress on “value for money” in government procurement. ePerolehan to be encouraged to enhance transparency in management of government procurement
• Conclusion:
- Comprehensive strategies and measures in the package - Cannot rely on orthodox policies. Government committed to innovative policies to deal with global crisis. - Malaysia’s banking and financial sector is strong and not affected by the global financial crisis and therefore able to support and finance the stimulus package. - Lessons learnt from the 1997-1998 crisis strengthened the corporate sector which is in a better and stronger position to face the crisis. - It will be a deep and prolonged global recession. All must join forces – including those across the aisle and the private sector – to put the nation on a stronger economic footing.
Read more from dozens of media sources, as of 7pm, about three hours after the bill was tabled:
|
Malaysia to spend billions more in new budget - source
Reuters India, India -10 hours ago
KUALA LUMPUR, March 10 (Reuters) - Malaysia's government is to announce it will spend billions of dollars to help prop up the economy when it sets out new ...
Reuters India, India -
KUALA LUMPUR, March 10 (Reuters) - Malaysia's government is to announce it will spend billions of dollars to help prop up the economy when it sets out new ...
Can RM50 billion ward off recession? Maybe not The Malaysian Insider, Malaysia - KUALA LUMPUR, March 10 – The Malaysian government is set to announce its largest ever stimulus package of more than RM50 billion this afternoon. ... |
Malaysia-Market factors to watch March 10 Reuters India, India - KUALA LUMPUR, March 10 (Reuters) - Following is a list of events in Malaysia and the region, as well as news stories and press reports which may influence ... |
Parallels between Razak and Najib New Straits Times, Malaysia - TOWARDS the end of one of his meetings with editors a few weeks ago, Datuk Seri Najib Razak was casually asked how he felt about his impending ascension to ... |
The inherent risks of price prognosis Hindu Business Line, India - Mumbai, March 9 It is that time of the year when major players in the global vegetable oil market congregate in Kuala Lumpur for the palm oil price outlook ... |
Malaysians' hopes pinned on 2nd stimulus package The Edge Daily, Malaysia - Prime Minister and Finance Minister Datuk Seri Najib Razak will unveil a mini-budget in Parliament March 10 aimed at stemming the tide of closure of ... |
Malaysia Plans Second Stimulus Package to Fight Slump Bloomberg - By Stephanie Phang March 9 (Bloomberg) -- Malaysia may unveil tax cuts, public spending and other measures totaling more than 30 billion ringgit ($8 ... |
PREVIEW-Malaysia's PM in waiting readies key budget Reuters - By David Chance KUALA LUMPUR, March 9 (Reuters) - Faced with the worst economic conditions since the 1998 Asian financial crisis and mounting political woes ... |
Malaysia to unveil new economic stimulus plan
Channel News Asia, Singapore -Mar 7, 2009
KUALA LUMPUR: Malaysia will this week unveil a second stimulus plan worth up to US$9.4 billion in a bid to prevent its export-driven economy sliding into ...
Channel News Asia, Singapore -
KUALA LUMPUR: Malaysia will this week unveil a second stimulus plan worth up to US$9.4 billion in a bid to prevent its export-driven economy sliding into ...
What bloggers are saying (40+ posts in just four hours):
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And tweeters too (4pm-8pm):
Do discuss!
You may also tweet us @BizMalaysia
Worth to note that on earlier on 5 MAR 2009, Forbes published a comment from AmResearch in response to an AP article "Malaysia plans $2.7 billion economic stimulus" as follows:
Clearly, the tabled amount for RM60-billion or 9% of GDP is already about 50% more than suggested by AmResearch. The call for a tax-free 2008 and cash bonuses would be nice though.AmResearch in a recent report estimated the government needs at least 40 billion ringgit ($11 billion) in increased spending, or five percent of gross domestic product, to prevent the economy from contracting this year.
It said the manufacturing slump would continue until September.
AmResearch urged the government to consider making 2008 a tax-free year to ease the public's burden and give cash or introduce a cash-bonus system for middle and low-income workers, families with school-going children, and farmers.
Bahasa Malaysia version is also available at ICT Penang: Pakej Rangsangan Ekonomi Malaysia 2009-2010.
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