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Friday, October 10, 2014

Budget 2015: Full text of Najib's speech

Najib delivering the Budget 2015 speech.
Najib delivering the Budget 2015 speech.
Mr. Speaker Sir, I beg to move the Bill intituled "An Act to apply a sum from the Consolidated Fund for the service of the year 2015 and to appropriate that sum for the service of that year" be read a second time.
Introduction
Mr. Speaker Sir
1. In the name of Allah, the Most Gracious and the Most Merciful. Let us pray and seek His blessings for me to table this important document, the 2015 Budget, to this august House and the rakyat.
2. Before I proceed, on behalf of the Government, I would like to extend condolences on the loss of Allahyarham Tun Hajah Suhaila Binti Tan Sri Mohammad Noah who was the wife of our third Prime Minister. May her soul be placed among the pious.
3. I would also like to take this opportunity on this blessed Friday afternoon to welcome back YAB Deputy Prime Minister and others who have returned from performing the Haj. I also wish them the gift of Haji Akbar.
4. Throughout nearly 60 years of independence, we have formulated various short, medium and long-term plans in our efforts to achieve prosperity. The fact is we have implemented various strategies that were carefully and sistematically planned to develop the economy. If not, Malaysia would not have reached its present level of success.
5. Nevertheless, many people are not aware that the process to develop and prosper the nation has not been easy. It takes hard work, comprehensive plans as well as painful and unpopular decisions. However, all these have to be undertaken by a responsible and accountable Government that always prioritises the interests of the rakyat.
6. From an economic perspective, when we achieved independence 57 years ago, we developed the country based on agriculture before progressing to a modern industrialised economy. Next, we moved into the upper-middle income phase. We are now moving towards a services-based economy and knowledge-based economy.
7. In brief, the objectives, principles and thrusts of the three Outline Perspective Plans, ten Malaysia Plans, New Economic Policy, National Development Policy, National Vision Policy and since 2010, the National Transformation Policy, have all focused on poverty eradication, increasing income and restructuring of society. This is with the aim to achieve socio-economic goals; diversify the commodity-based economy; human capital development; enhancing competitiveness of the public and private sectors; higher value chain; inclusive development; as well as transformation of the Government, economy, social and politics.
8. Clearly, our former leaders in their wisdom have carried out responsibilities to develop Malaysia in their own mould. The struggle started with Tunku Abdul Rahman, followed by Tun Abdul Razak who had implemented development and restructured society, to Tun Hussein who maintained peace and unity. Tun Mahathir modernised the country while Tun Abdullah emphasised human capital development.
9. Further, the present Government is committed to driving growth with a broader approach to place Malaysia on a strong foundation.
10. This is my sixth budget since I assumed leadership of the administration, and the country’s 56th budget. The 2015 Budget completes the ten Malaysia Plans.
11. Further, in May 2015, the 11th Malaysia Plan (11MP) will be launched. At the same time, a new approach known as the Malaysian National Development Strategy (MyNDS) is being formulated.
12. MyNDS will be a key basis to planning and preparation of programmes and projects under 11MP. The emphasis is on using limited resources optimally, with focus on high-impact projects and programmes at low cost as well as efficient and rapid implementation. This means Budget 2016 will be the trigger to the final five years of Malaysia’s progress to a high-income advanced economy by 2020.
13. Many countries such as Korea, Germany, Japan, Taiwan and China began their economic progress based on agriculture and have since moved to an economy that emphasises high level of knowledge, skills, innovation and expertise.
14. To put it simply, economic planning and policies of a country need to be adjusted according to the developments and challenges in the domestic and external environment. Hence, to remain resilient and competitive, Malaysia must move to an economy based on knowledge, high skills, expertise, creativity and innovation.
15. Indeed, from the economic perspective, a rapidly developing country typically generates wealth through capital economy activities. However, the rakyat voice their grievances and complaints through blogs, letters, meetings, interviews and dialogues over the millions spent, billions allocated and various mega projects questioning the benefits to the people.
16. I understand the people on the ground, whether in rural and urban areas, may not comprehend or appreciate the relevance of the budget to them.
17. The biggest challenge I face in administrating Malaysia is its diverse communities. As recent as yesterday, I was asked by reporters on what was the most difficult issue that I had to decide on. I responded that it is how to balance between policies that are populist in nature as compared to those policies based on economic and financial imperatives.
18. The Government is steadfast in strengthening fiscal governance. For instance, consolidating the fiscal deficit is a moral responsibility of our generation towards the future generation. In essence, we do not want Malaysia to inherit Federal Government finances burdened with debt.
19. Taking into account the needs of the rakyat and the realities of life, the basis for the formulation of this year’s budget must therefore emphasise the balance between the capital economy and people’s economy.
20. The Capital Economy refers to economic management and policies from the macro perspective. This will facilitate a country to set its main targets and benchmark against other countries. These include economic management based on capital, GDP growth, per capita income, private investment, capital market, corporate profits, sovereign and credit ratings, Bursa index and share value. Hence, I will now call it the Capital Economy.
21. When we refer to the People’s Economy, it is an economy that is rakyat-orientated covering priorities and interests of the rakyat such as cost of living, household income, education opportunities, employment and business, quality of life, skills training, entrepreneurship as well as security and safety. In brief, it refers to an economy based on the daily lives of the rakyat which I call the People’s Economy.
22. It is a fact that from the theoretical perspective, the capital economy and the people’s economy cannot be separated and they exist in a symbiotic relationship. However, I wish to reiterate that this Budget will focus on the people’s economy as the bedrock in prioritising the interests of the rakyat. Hence, when we achieve advanced nation status, the benefits of the nation’s wealth and prosperity will be enjoyed by the rakyat.
ECONOMIC PERFORMANCE AND PROSPECTS
23. Beginning from 3 April 2009, it has been more than five years since I became the Prime Minister and introduced 1Malaysia: People First, Performance Now based on the National Transformation Policy (NTP). The NTP comprises the Government Transformation Programme (GTP), Economic Transformation Programme (ETP), Political Transformation Programme (PTP), Community Transformation Programme (CTP), Social Transformation Programme (STP) and Fiscal Transformation Programme (FTP) in our efforts to achieve an advanced high-income economy. The ETP targets an increase in Malaysia’s gross national income (GNI) per capita to USD15,000 and mobilise USD444 billion in investment by 2020.
24. Since 2009, a total of 196 projects from 12 National Key Economic Areas (NKEAs) and 6 Strategic Reform Initiatives (SRIs) have been implemented. Total investment reached RM219 billion and more than 437,000 high-paying job opportunities created.
25. The economy expanded with positive growth in all sectors and registered GDP growth of 6.3%. We are grateful to the Almighty that this performance is the highest among ASEAN countries in the first half of 2014.
26. We take pride in the performance of the capital market between 2009 and 2014. The FBM KLCI has risen 114% from 884.45 points in January 2009 to 1,892.65 points in July 2014. Market capitalisation also increased 162% from RM667.87 billion to RM1,749.49 billion on 7 October 2014.
27. The GNI per capita also increased 50% from USD6,700 to USD10,060 in the last five years. I am confident that this year we will achieve strong economic growth between 5.5% and 6%. In addition, the fiscal deficit continues to improve. The fiscal deficit has declined from 6.7% in 2009 to 3.9% in 2013 and is expected to reduce further to 3.5% of GDP in 2014.
28. For 2015, economic growth is expected to remain strong between 5% and 6% while the fiscal deficit is projected to further decline to 3% of GDP.
29. I am pleased to note that we have achieved several new records including:
First: The FBM KLCI reached 1,892.65 points in July 2014, a historic new high; and
Second: Foreign direct investment (FDI) totalling RM38.7 billion in 2013 was the highest realised investment to date.
2015 BUDGET ALLOCATION
30. The 2015 Budget allocates a total of RM273.9 billion, an increase of RM9.8 billion compared with the 2014 initial allocation. Of the amount, RM223.4 billion is for Operating Expenditure while RM50.5 billion for Development Expenditure.
31. Under Operating Expenditure, RM65.6 billion is for Emoluments and RM38.1 billion for Supplies and Services. The largest share of RM116.4 billion is for Fixed Charges and Grants, while RM1.5 billion is for Purchase of Assets. The remaining RM1.8 billion is for Other Expenditures.
32. Under Development Expenditure, the economic sector will receive the highest share at RM29.3 billion, followed by the social sector with RM12.6 billion for education and training, health, housing and the well-being of society. In addition, RM4.9 billion is allocated to the security sector. The balance of RM1.7 billion is for general administration and RM2 billion for contingencies.
33. In 2015, the Federal Government revenue collection is estimated at RM235.2 billion, an increase of RM10.2 billion from 2014.
34. In 2015, with the implementation of the Goods and Services Tax (GST) Government revenue is estimated at RM23.2 billion. However, as a caring Government, we have exempted several goods from GST amounting to RM3.8 billion.
35. With the implementation of GST, the Sales and Services Tax (SST), will be abolished resulting in revenue foregone of RM13.8 billion. This means that after deducting RM13.8 billion and RM3.8 billion from a revenue of RM23.2 billion, the Government will have a balance of RM5.6 billion.
36. Of the total, RM4.9 billion is channelled back to the rakyat through assistance programmes such as the increase in Bantuan Rakyat 1Malaysia (BR1M). Finally, net revenue collection from GST will only amount to RM690 million.
2015 BUDGET: THE PEOPLE’S ECONOMY
37. The 2015 Budget is formulated with focus on the people’s economy and outlines seven main strategies:
First Strategy: Strengthening Economic Growth;
Second Strategy:Enhancing Fiscal Governance;
Third Strategy: Developing Human Capital and Entrepreneurship;
Fourth Strategy: Advancing Bumiputera Agenda;
Fifth Strategy: Upholding Role of Women;
Sixth Strategy: Developing National Youth Transformation Programme; and
Seventh Strategy: Prioritising Well-Being of the Rakyat.
FIRST STRATEGY: STRENGTHENING ECONOMIC GROWTH
38. The Government will continue to provide a conducive and comprehensive ecosystem to accelerate domestic and foreign investment.
Measure 1: Invigorating Services Sector
39. In 2013, the services sector contributed 55.2% to GDP. To achieve the target of 60% by 2020, the Government will boost the services sector by implementing the following initiatives:
First: Implementing the Services Sector Blueprint;
Second: Setting up a Services Sector Guarantee Scheme amounting to RM5 billion for SMEs in the services sector, with a maximum financing of RM5 million together with 70% Government guarantee. The scheme is expected to benefit 4,000 SMEs;
Third: Establishing a Research Incentive Scheme for Enterprises (RISE) with an allocation of RM10 million to encourage companies to set up research centres in high technology, ICT and knowledge-based industries;
Fourth: Reintroducing the Services Export Fund (SEF) totalling RM300 million to encourage SMEs to conduct market feasibility studies and undertake export promotion to penetrate new markets; and
Fifth: Strengthening the Franchise Development Scheme under the Ministry of Domestic Trade, Co-operatives and Consumerism in collaboration with the Malaysian Franchise Association. A sum of RM20 million is allocated for the scheme.
Measure 2: Strengthening Islamic Financial Market
40. Currently, the Malaysian Islamic finance accounts for 25% of total assets in the banking system. Internationally, Malaysia remains as the largest sukuk market accounting for 60% of the global sukuk market.
41. The Government will introduce a new shariah-compliant investment product in 2015 called the Investment Account Platform (IAP). IAP will provide opportunities to investors in financing entrepreneurial activities and developing viable SMEs. At the same time, IAP will be a platform to attract institutional and individual investors including high net worth individuals to invest in the Islamic financial market. Initially, IAP will be implemented with a startup fund of RM150 million.
42. To promote investment in IAP, the Government proposes individual investors be given income tax exemption on profits earned from qualifying investment for three consecutive years.
43. To boost domestic sukuk and bond issuance and trading, the Government introduced the Exchange Traded Bond and Sukuk (ETBS) in January 2013. The Government proposes that the Malaysian Government Securities and Government Investment Issues be listed and traded in ETBS.
44. In addition, expenses incurred in the issuance of sukuk are given deduction from year of assessment 2003 until year of assessment 2015. Therefore, it is proposed that deduction for expenses incurred in the issuance of sukuk based on Ijarah and Wakalah principles be extended for another three years until year of assessment 2018.
Measure 3: Promoting Domestic Shipping Industry
45. The Merchant Shipping Act 2011 mandates insurance or financial security for third-party liability coverage for ships operating in Malaysia. Currently, most large cargo ship owners in Malaysia have third-party liability coverage through Protection and Indemnity (P&I) overseas.
46. To assist owners of cargo ships with gross tonnage not exceeding 300 tonnes, the Government will establish a Malaysia P&I Club under Exim Bank. The Club will offer third-party liability protection at reasonable premiums.
Measure 4: Ensuring balanced and inclusive regional growth with continued promotion of investment in less developed areas
47. In this context, the Government will enhance the special incentives package provided under the Economic Corridors to include more areas that are less developed.
Measure 5: Incentives for Industrial Area Management
48. Among the key factors that support the development of industries is by having systematically maintained public facilities/infrastructure. In this regard, an incentive of 100% income tax exemption for a period of five years will be made available to encourage the private sector to manage, maintain and upgrade industrial estates in less developed areas. On the other hand, an incentive of 70% income tax exemption for a period of five years will be made available to the private sector to manage industrial estates in other areas.
Measure 6: Capital Allowance to Increase Automation in Labour Intensive Industries
49. The Government will provide incentive in the form of capital allowance on automation expenditure to encourage automation in the manufacturing sector, according to the following categories:
• First Category: for high labour intensive industries (such as rubber products, plastics, wood, furniture and textiles), an automation capital allowance of 200% will be provided on the first RM4 million expenditure incurred within the period from 2015 to 2017; and
• Second Category: for other industries, automation capital allowance of 200% will be provided on the first RM2 million expenditure incurred within the period from 2015 to 2020.
Measure 7: Promoting High-Quality and Focused Investment
50. In promoting high-quality and focused investment, a more specialised incentive package will be offered for investment projects based on technology, innovation and knowledge, involving highly qualified and knowledgeable employees with high salaries.
Measure 8: Accelerating Public and Private Investment
51. In 2015, several infrastructure projects will be implemented:
First: Construction of the 59-km Sungai Besi – Ulu Klang Expressway (SUKE) at a total construction cost of RM5.3 billion;
Second: Construction of the 276-km West Coast Expressway from Taiping to Banting at a total construction cost of RM5 billion;
Third: Construction of the 47-km Damansara – Shah Alam Highway (DASH) at a total construction cost of RM4.2 billion;
Fourth: Construction of the 36-km Eastern Klang Valley Expressway (EKVE) at a total construction cost of RM1.6 billion;
Fifth: Upgrading the East Coast railway line along Gemas - Mentakab, Jerantut - Sungai Yu and Gua Musang - Tumpat with an allocation of RM150 million;
Sixth: Construction of the 56-km Second MRT Line from Selayang to Putrajaya at an estimated cost of RM23 billion; and
Seventh: LRT 3 Project, which will link Bandar Utama to Shah Alam and Klang, at an estimated cost of RM9 billion, will be implemented.
52. The Pengerang Integrated Petroleum Complex project with a total investment of RM69 billion is expected to create more than 10,000 job opportunities.
53. Additionally, to develop the electric vehicle manufacturing industry in Malaysia, a Sustainable Mobility Fund of RM70 million will be established under SME Bank. Initially, 50 electric buses will be introduced.
Measure 9: Encouraging Establishment of Principal Hub
54. For this the Government will continue its efforts to further increase the number of multinational companies’ global operational centres in Malaysia. In line with this, customised incentives for Principal Hubs will be introduced early next year.
Measure 10: Spurring Creative Industry
55. To develop creative industries such as animation, filming, designing and cultural heritage, the Government has allocated RM200 million to MyCreative Ventures in 2012. To further promote the industry, a Digital Content Industry Fund will be set up under the Communications and Multimedia Commission with an allocation of RM100 million.
Measure 11: Increasing Capacity of High-Speed Broadband
56. The High-Speed Broadband (HSBB) will continue to be implemented in areas of high economic impact, covering state capitals and selected major towns nationwide. A sum of RM2.7 billion will be spent over the next three years to build 1,000 new telecommunication towers and laying of under sea cables.
Measure 12: Boosting Tourism Industry
57. In conjunction with Malaysia – Year of Festivals 2015, the Government is targeting 29.4 million foreign tourist arrivals with expected income of RM89 billion. For this, RM316 million is allocated for various programmes under Ministry of Tourism and Culture.
58. Currently, SMEs contribute 33% to GDP and the share is targeted to increase to 41% by 2020.
59. To accelerate the participation of SMEs in economic activity, the Government proposes the implementation of SME Investment Partner. Under the programme, SMEs will be given financing assistance in the form of loans, equity or both, particularly at the startup stage. An initial fund totalling RM375 million will be provided for a period of five years, of which RM250 million is from SME Bank and RM125 million from private investors. In addition, RM10 million will be allocated for the Business Accelerator Programme under SME Corp.
60. To enhance use of new technology, automation and innovation in the development of SMEs, RM80 million is allocated for a Soft Loan Scheme for Automation and Modernisation of SMEs under the Malaysian Industrial Development Finance Berhad.
61. TEKUN has channelled loans totalling RM3.1 billion to nearly 300,000 borrowers with loan limits of between RM1,000 and RM100,000. In 2015, TEKUN will provide additional funds of RM500 million which will be distributed as follows:
First: RM350 million is allocated for Bumiputera entrepreneurs to provide financing to nearly 33,000 new borrowers;
Second: RM50 million will be allocated to Indian Entrepreneurs Financing Scheme that will benefit 5,000 Indian entrepreneurs;
Third: RM50 million will be allocated to the Young Professional Women Entrepreneurs Development Programme that will benefit 5,000 professional women; and
Fourth: RM50 million will be allocated to the Armed Forces Veteran Entrepreneur Development Programme that will benefit 5,000 veterans
62. To assist SME entrepreneurs from the Chinese community, the Government will provide soft loans totalling RM50 million, and RM30 million for hawkers and petty traders.
Measure 14: Developing Innovation and Commercialisation
63. Currently, Malaysia’s R&D expenditure as a share of GDP is low, compared with advanced economies such as Japan and South Korea. In this regard, the Government will allocate RM1.3 billion to the Ministry of Science, Technology and Innovation to implement several related programmes including:
First: Target 360 high-impact innovative products to be commercialised within the next five years;
Second: Provide research funds amounting to RM290 million to implement various high-impact R&D&C programmes;
Third: Rebrand SIRIM. For this, an SME Technology Penetration and Upgrading Programme and technology auditing will be implemented;
Fourth: Introduce a new initiative namely Public Private Research Network spearheaded by Ministry of Education in collaboration with the Malaysian Technology Development Corporation with an allocation of RM50 million; and
Fifth: Strengthen Technology Commercialisation Platform Programme by Agensi Inovasi Malaysia with an additional allocation of RM50 million.
SECOND STRATEGY: ENHANCING FISCAL GOVERNANCE
64. The Government continues with efforts to strengthten financial sustainability to ensure the well-being of the rakyat and reduce fiscal deficit to achieve a balanced budget.
Measure 1: Implementing GST
65. During the announcement of GST in the 2014 Budget, the Government proposed not to impose GST on basic food items and services. Based on the feedback received from all segments of society, the Government agrees to widen the scope of items that will not be subjected to GST as follows:
(i) All types of fruits whether local or imported;
(ii) White bread and wholemeal bread;
(iii) Coffee powder, tea dust and cocoa powder;
(iv) Yellow mee, kuey teow, laksa and meehoon;
(v) The National Essential Medicine covering almost 2,900 medicine brands. These medicines are used to treat 30 types of diseases including heart failure, diabetes, hypertension, cancer and fertility treatment;
(vi) Reading materials such as children's coloring books, exercise and reference books, text books, dictionaries and religious books; and
(vii) Newspapers.
66. In addition, the Government has also agreed electricity consumption that is not subject to GST be increased from the first 200 units to 300 units. This will benefit 70% of households.
67. Further, to ensure the implementation of GST does not burden the rakyat, the Government has agreed that the retail sale of RON95 petrol, diesel and LPG be given relief from the payment of GST. Through this measure, consumers and targeted groups will not have to pay GST on the purchase of RON95 petrol, diesel and LPG.
68. Of the 944 goods and services in the basket of goods of the CPI, the prices of 532 items or 56% are expected to reduce up to 4.1%. Among the goods are medicines, electrical appliances such as refrigerators and washing machines, textile products, plastic products such as pails and plates, shoes and slippers, household furniture, baby diapers, soap, meat, chicken eggs, cooking oil, seafood, rice and vegetables.
69. Meanwhile, about 354 goods and services may experience some price increase but less than 5.8%. The Government hopes that traders will be responsible and not raise prices indiscriminately to burden the rakyat. The Government will disseminate shoppers’ guide to enable consumers compare prices before and after the implementation of GST.
70. Indeed, with the implementation of GST, the Government will be able to reduce the tax burden on the rakyat as follows:
First: For individuals and households for year of assessment 2015
(i) Individual income tax rates will be reduced by 1 to 3 percentage points. With this measure, 300,000 individual taxpayers will no longer pay income tax.
(ii) Tax payers with family and income of RM4,000 per month will not have tax liability.
(iii) Individual income tax will be restructured whereby the chargeable income subject to the maximum rate will be increased from exceeding RM100,000 to exceeding RM400,000. The current maximum tax rate at 26% will be reduced to 24%, 24.5% and 25%. This will result in the existing taxpayer enjoying a tax saving of at least 5.3%.
Second: For year of assessment 2015, cooperative income tax rate will also be reduced by 1 to 2 percentage points. In addition, secretarial fee and tax filing fee are allowed as deduction;
Third: For year of assessment 2016, corporate income tax rate will be reduced by 1 percentage point from 25% to 24%; and
Fourth: For year of assessment 2016, income tax rate for SMEs will also be reduced by 1 percentage point from 20% to 19%
71.The experience of other countries has shown that a key critical factor in the succesful implementation of GST is the level of readiness by businesses. To assist businesses, the following incentives and assistance will be provided:
First: Training grant of RM100 million provided to businesses for their employees to attend GST courses;
Second: Financial assistance amounting to RM150 million provided to SMEs for the purchase of accounting software;
Third: Accelerated Capital Allowance on purchase of ICT equipment and software; and
Fourth: Expenses incurred for training in accounting and ICT relating to GST will be given additional tax deduction.
Measure 2: Subsidy Rationalisation
72. The Government had allocated RM588 million for various subsidies in 1994. This amount has increased to RM40.5 billion in 2014.
73. To improve the public finance position, the Government is committed to implementing subsidy rationalisation, particularly for petroleum. The rasionalisation aims to ensure a more targeted subsidy, reduce leakages and smuggling. The Government will ensure that the subsidy rationalisation is implemented in stages so that it does not burden the rakyat.
74. At present, the Government allocates more than RM21 billion a year to subsidise RON95 petrol, diesel and LPG cooking gas. As a result, the allocation for subsidies has increased 14 times from RM1.65 billion in 2002 to RM23.5 billion in 2013, solely to maintain the low retail petrol price. This is due to the increase in number of vehicles from 13.6 million units in 2008 to 23.7 million units in 2013.
75. To ensure a more targeted subsidy and taking into account the rakyat's awareness and readiness to subsidy rationalisation, the Government will develop a new mechanism for providing petroleum subsidy. I will announce the new mechanism soon.
Measure 3: Disseminating Widely National Blue Ocean Strategy.
76. The National Blue Ocean Strategy has demonstrated the effectiveness of the implementation of Government projects and programmes. In this regard, RM356 million will be provided in 2015 for the following programmes:
First: Establishing four more UTCs in Terengganu, Kelantan, Negeri Sembilan and Perlis and one mini UTC in Kedah; and
Second: Accelerating upskilling to 5,000 trainees through the 1Malaysia Skills and Employability Scheme for the public sector and 1Malaysia Training Centre for the private sector.
THIRD STRATEGY: DEVELOPING HUMAN CAPITAL AND ENTREPRENEURSHIP.
77. Currently, human resource is among the key factors contributing to prosperity of a nation. Wealth creation is no longer solely dependent on resources such as petroleum, oil palm or minerals but also includes ideas, creativity and innovation as well as people’s skills including invention of new products which are capable of driving economic growth and nurturing new entrepeneurs.
78. Consistent with the people’s economy, it is the Government’s aspiration to increase the component of wages to GDP from 34% currently to 40% by 2020.
Measure 1: Strengthening Teaching Professionalism and School Performance.
79. The education sector will continue to be strengthened in line with the Malaysia Education Blueprint 2013 – 2025. For this purpose, the Government will allocate RM56 billion to the Ministry of Education for various teaching and learning programmes. Emphasis will be given towards strengthening schools which require guidance and special assistance. In this regard, a sum of RM250 million will be allocated for School Improvement Specialist Coaches and School Improvement Partners programmes.
Measure 2: Empowering Trust Schools and Building New Schools
80. The Government will expand the Trust Schools programme which started in 2011. To date, 30 Trust Schools have been set up benefiting nearly 20,000 students and 1,500 teachers. Under the programme, Principals are accorded autonomy and are highly accountable for the management as well as the teaching and learning process in schools. As such, the Government plans to expand 20 more Trust Schools in Johor, Sarawak, Selangor, Perak, Negeri Sembilan and the Federal Terrritory of Kuala Lumpur with an allocation of RM10 million in 2015.
81. The Government will also build 12 new schools comprising seven primary schools, three secondary schools and two boarding schools nationwide.
Measure 3: Mainstreaming Technical and Vocational Education
82. By 2020, at least 46% of jobs will require technical and vocational qualifications. For this, the Government will increase the student intake in vocational and community colleges through the Vocational and Technical Transformation programme and upgrade colleges. For this purpose, the Government allocates RM1.2 billion.
83. Currently, applications for entry into Technical and Vocational Training (TEVT) programmes received by the Ministry of Education far exceed the capacity of 20,000 places. To open up more opportunities in this field, the Government will allocate RM100 million immediately to Ministry of Education for 10,000 placements in technical and vocational private colleges. Further, RM50 million will be allocated to MARA to implement TEVT programmes.
84. To encourage private companies, the Government proposes that the existing tax incentives be enhanced as follows:
First: Double deduction for scholarships awarded to students in vocational and technical courses at the certificate level;
Second: Double deduction on expenses incurred by a company to implement a structured internship programme for students at diploma and vocational level; and
Third: Further deduction on training expenses incurred by an employer for employees to obtain certificate qualifications from accredited vocational and professional bodies.
Measure 4: Development and Maintenance of Education Facilities.
85. To ensure a safe and conducive learning environment, the Government will allocate RM800 million for the following:
- National Schools RM450 million;
- National-type Chinese schools RM50 million;
- National-type Tamil schools RM50 million;
- Religious schools RM50 million;
- Fully residential schools RM50 million;
- Government Aided Religious Schools RM50 million;
- MARA Junior Science Colleges RM50 million;
- Registered Sekolah Pondok RM25 million; and
- National-type Chinese Secondary Schools (Conforming Schools) which use the national curriculum RM25 million
86. The Government is pleased to announce that the electricity and water bills of all National-type schools under the Ministry of Education will be paid in full up to a maximum limit of RM5,000 a month compared with RM2,000 previously.
Measure 5: Sponsoring Education.
87. In 2015, the Government will allocate RM3 billion for sponsoring education of which RM1.9 billion will be given to the Public Services Department, Ministry of Education RM759 million and Ministry of Health RM258 million.
Measure 6: Expanding MyBrain15 Programme.
88. The Government has introduced MyBrain15 Programme to produce 60,000 PhD holders by 2023. To date, 34,525 students are pursuing post-graduate studies with a cost of over RM386 million. In 2015, RM112 million will be allocated for this programme. MyBrain15 Programme, which is currently for the private sector, is proposed to be extended to civil servants and employees of statutory bodies who are keen to further their studies on part-time basis in local higher learning institutions. -Star

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