Full Budget 2023 speech

Full Budget 2023 speech

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Full Budget 2023 speech

INTRODUCING THE SUPPLY BILL (2023)

DEWAN RAKYAT

FRIDAY, 7 OCTOBER 2022

THEME: BUDGET 2023: KELUARGA MALAYSIA, MAKMUR BERSAMA

Tan Sri 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 2023 and to appropriate that sum for the service of that year” be read a second time.

PREAMBLE

1. Bismillahirahmanirahim. As we hold firm to the promise of Allah SWT the Almighty, may the path we take be the best one for Malaysia. Truly, Allah the Almighty is the only true Giver of blessings and He is the ultimate planner.

2. Tan Sri Speaker Sir, The Right Honorable Members of Parliament, as well as brothers and sisters of Keluarga Malaysia who diligently listen to this presentation. Assalamualaikum Warahmatullahi Wabarakatuh dan Salam Keluarga Malaysia!

3. I am standing here this pleasant evening to carry out the immense trust given to the Ministry of Finance. The bigger the trust, the bigger the efforts that need to be translated.

4. Thus, in planning the national budget for this coming year, the Ministry of Finance team has traveled all over the country, attended more than 200 engagements with industries and stakeholders, and examined and assessed more than 250 memorandums and 12,000 public proposals.

5. Therefore, Before you is a document we have prepared to meet the needs of the people, to meet the national development agenda in ensuring a robust economy to face the many possible vagaries presented by a volatile global environment.

This is the result of our perseverance...
This is the 2023 Budget.

2022 RECOVERY

Tan Sri Speaker Sir,

6. Even though Covid-19 has not yet fully subsided, the world has emerged from its temporary malaise. Malaysia has moved in the transition phase of endemic. However, arduous the journey the reality is:-

This Government has analysed and formulated detailed plans....
From MCO, carefully reopening the economy,
From silence, we have resumed activity,
Various assistance disbursed to citizens,
Various facilities provided to businesses,
Various support provided to industry,
That this Government is the Keluarga Malaysia Government...

7. Under the leadership of YAB Prime Minister, the Government has successfully steered the country, charting a path to strong economic recovery.

8. However, there are still naysayers who spread malice intended to cause concern. Admittedly, the global economic situation requires us to be vigilant. The possibility of geopolitical unrest and the global economic slowdown impact all nations, not only Malaysia, requiring us to be flexible to face any eventuality. So, let us evaluate various indicators and figures regarding Malaysia’s economy.

9. Following a contraction of 4.5% in the third quarter of 2021, the country bounced back with a growth rate of 3.6% in the fourth quarter of 2021, and subsequently further strengthened to 5% in the first quarter of 2022 and 8.9% in the second quarter of 2022. Our growth in the second quarter of this year is the highest in Southeast Asia.

10. This momentum of growth is expected to continue and further strengthen in the third quarter of 2022. Insya-Allah, Malaysia’s economy is expected to exceed the March 2022 forecast of between 5.3% to 6.3%. Based on the current strong economic indicators, the Government has revised its 2022 growth forecast of between 6.5% to 7%.

11. However, the 2022 recovery is not solely about the GDP. In fact, the Rakyat’s livelihood has also improved. Unemployment rate has also reduced for twelve months consecutively, from 4.8% in July 2021 to 3.7% in July 2022. In only the span of a year, the Keluarga Malaysia Government sucessfully returned the labour market to full employment.

12. Consumer confidence has also begun to recover with the value of wholesale and retail trade for July 2022 increasing by 41% compared to July 2021. For the first seven months, the total value of wholesale and retail trade reached RM 882 billion, which is a 20% increase compared to the same period in 2021.

13. Despite this, the country's economic recovery which continues to strengthen is not spared from economic uncertainties. Due to global developments, the country's inflation rate has increased from 2.3% in January 2022 to 4.7% in August 2022.

14. If not for the subsidies and assistance amounting to RM77.7 billion, Malaysia’s inflation rate would have increased to 10%.

15. Due to high inflation faced in other countries, particularly the United States which has breached 8%, their monetary policy has been aggressively tightened, with its interest rate increased by 300 basis points this year. With the trend of various countries tightening their respective monetary policy, it is expected that global growth prospects will be dampened in year 2023.

2023 CHALLENGES

Tan Sri Speaker Sir,

16. The world economic outlook for 2023 is increasingly uncertain and challenging pursuant to geopolitical conflicts, global inflationary pressures, tightened monetary policy and weak economic growth prospects.

17. In January 2022, the International Monetary Fund (IMF) had initially projected 2023 global growth rate at 3.8%. However, in July 2022, the IMF revised its 2023 global growth projection downwards to 2.9%.

18. As an open economy, Malaysia cannot be fully insulated from the increasingly challenging global environment. As a result, the country's economic growth rate for 2023 is projected to moderate, to between 4% to 5%.

19. As Keluarga Malaysia, we need to immediately act to prepare for the future global challenges, and at the same time act responsibly towards building a bright future for our future generation. As such, to move towards a better Malaysia, Budget 2023 will be guided by the 3Rs — namely Responsive, Responsible and Reformist.

20. Budget 2023 will be immediately responsive to any challenge and provide comprehensive assistance to Keluarga Malaysia, not just the B40 but also the M40 group, women, youth, the disabled and all segments of society.

21. The 2023 budget is a responsible budget in balancing between an expansionary fiscal policy and at the same time implementing fiscal reforms towards ensuring the Government's financial sustainability in the long term. This budget will be responsible in building the country's resilience to face any future crisis.

22. Budget 2023 is reformist in taking the opportunity to transform the country's development landscape towards becoming more inclusive and sustainable whilst building a stronger national industry through strategic investments.

Tan Sri Speaker Sir,

23. In soliciting inputs for Bajet 2023, the Government issued a Pre-Budget 2023 Statement and published six public consultation papers in addition, to hosting various engagements. Thank you YAB Prime Minister for your directly involvement since the early days of planning and up until the finalisation of the Budget 2023 direction.

24. Budget 2023 has not been formulated only for a specific group but instead has been inclusive in collating and analysing of ideas, molded into a 2023 Budget inspired by Keluarga Malaysia. More than 100 of the rakyat's initiatives has been realized as part of the holistic effort resulting in this tome. Thank you to all those who have expressed their ideas and views.

25. With the theme: “Keluarga Malaysia, Makmur Bersama”, and in line with Budget 2023 which is Responsive, Responsible and Reformist, this Budget will ensure the wellbeing of the rakyat, business continuity, economic prosperity and public service delivery efficiency.

FIRST AGENDA: RESPONSIVE BUDGET

Tan Sri Speaker Sir,

26. To ensure a responsive Budget 2023 agenda, the Government will continue to implement an expansionary fiscal policy. This approach is vital to provide the necessary assistance to the Rakyat and support for businesses.

STRATEGY 1: EXPANSIONARY FISCAL POLICY

27. The 2023 Budget is unprecedented, with an allocation of RM372.3 billion. This is a significant increase compared to Budget 2022's allocation of RM332 billion and Budget 2021's of RM322 billion.

28. From this allocation, the Government proposes to provide RM272.3 billion for operating expenditure, RM95 billion for development expenditure and RM5 billion under the Covid-19 Fund. A total of RM2 billion is allocated as a Contingency Reserve Advance Warrant.

STRATEGY 2: PRIORITY TO THE RAKYAT

29. Within the current fiscal space, Budget 2023 will prioritise efforts to safeguard the welfare of the Rakyat.

Focus 1: B40 Group

30. The Social Welfare Department (JKM) has provided various forms of monthly assistance to the poor such as elderly assistance, children assistance, assistance for the disabled as well as chronically ill patients.

31. During the Budget 2022 presentation, I had announced the commitment to expand the income eligibility requirements for welfare recipients, in line with the 2019 Food Poverty Line Income (PLI) at RM1,169.

32. With this decision, more than 450,000 households are eligible to receive JKM's monthly assistance. The plight of the poor has been given special emphasis with an allocation of RM2.5 billion for 2023, which is a significant increase as compared to RM1.5 billion in 2020.

33. Previously, the Government had subsidised electricity bills up to RM40 to hardcore poor households under e-Kasih. Starting 2023, the provision of electricity bill subsidy of up to RM40 will be expanded according to the latest Food PLI which refers to the households with an income of RM1,169 and below, as compared to the existing requirement of RM980 and below. I hope the expansion of the eligibility requirement according to the Food PLI, will benefit more Rakyat — Insya-Allah.

Tan Sri Speaker Sir,

34. Recognising the benefits gained from the direct cash assistance, the Government will continue to improve the implementation of Bantuan Keluarga Malaysia or BKM. Hence, for next year:
• Households earning less than RM2,500 per month with five children or more will receive BKM of RM2,500. This is a new category that reflects the Government’s efforts in easing the burden of families with many children. Meanwhile, households with up to four children are eligible to receive BKM of between RM1,000 to RM2,000.
• For households earning between RM2,500 to RM5,000, the BKM cash assistance of between RM500 to RM1,250 has been provided depending on the number of children.
• For single senior citizens and singles, they will continue to receive BKM of RM600 and RM350 respectively subject to certain income thresholds.
• In 2023, the Government will continue to provide additional assistance of RM500 to single parents with children. This means that single parents are eligible to receive a maximum assistance up to RM3,000. The BKM maximum rate has increased as compared to RM2,500 this year.

35. For instance, Firdaus and Nor Aliza from Pasir Gudang who have five children received BKM of RM2,000 this year. Next year, they are eligible to receive BKM of RM2,500. Meanwhile, Ling Mee Hoon, a single mother from Sitiawan who raises three children, will receive BKM of RM1,300 this year and is eligible to receive BKM of RM1,500 in 2023.

36. Bantuan Keluarga Malaysia 2023 will benefit 8.7 million recipients with an allocation of RM7.8 billion. BKM 2023 is a comprehensive assistance that has been improved significantly as compared to Bantuan Sara Hidup 2020 with 5 million recipients and total allocation of RM5 billion.

37. Reflecting Government's concern towards the poor and B40, cash assistance under JKM and BKM for 2023 will exceed RM10 billion! It is hoped that with this assistance, recipients can heave a sigh of relief and utilise the assistance wisely according to their needs.

38. Allah Subhanahu Wa Ta’ala mentioned in the Quran, in surah ar-Ra’d verse 11 — “Verily Allah does not change a people's condition unless they change their inner selves”. Although the cash assistance is important for their immediate needs, only a steady income can elevate households towards a more comfortable life.

39. The Government aims to eradicate hardcore poverty by 2025. This issue will be addressed holistically through a whole-of-nation approach. Keluarga Malaysia Hardcore Poverty Eradication Programme was launched this year with a total allocation of RM150 million.

40. For 2023, to accelerate the agenda of eradicating hardcore poor, RM1 billion has been allocated whereby RM750 million is provided by the Government, whereas RM250 million will be provided by GLCs as corporate social responsibility (CSR).

41. For 2023, this programme will provide economic opportunities to more than 50,000 hardcore poor households to elevate their income, among others, through agricultural projects as well as entrepreneurial ventures involving products and services. The assistance includes training, start-up capital and incentives for agriculture, marketing and digitalisation. The Government hopes that this effort will increase the incomes of the hardcore poor households to exceed the food poverty line income.

Focus 2: M40 Group

Tan Sri Speaker Sir,

42. The Government has never forsaken the middle-income households. The Government has always strived to raise the disposable income of the M40 group.

43. For approximately 1 million taxpayers, the Government would like to share some good news. We are pleased to announce that the resident individual’s income tax rate will be reduced by 2 percentage points for the chargeable income band of between more than RM50,000 to RM100,000, as follows:
• First: For the chargeable income band of between more than RM50,000 to RM70,000, the income tax rate is reduced from 13% to 11%; and
• Second: For the chargeable income band of between more than RM70,000 to RM100,000, the income tax rate is reduced from 21% to 19%.

44. At the same time, the chargeable income band of between more than RM250,000 to RM400,000 will be combined with the chargeable income band of more than RM400,000 to RM600,000 and subject to the tax rate of 25%.

45. With the above special income tax treatment, the income tax savings for middle income group is up to RM1,000, meanwhile, for top income group is up to RM250 per taxpayer. In other words, it is estimated that an estimated RM800 million is the additional income available to be spent by the Rakyat.

46. Towards embracing a cashless society, the e-Pemula initiative for M40 will be implemented by offering e-wallet credits amounting RM100 to per M40 individual with annual earnings less than RM100,000. It is estimated that 8 million individuals are eligible to claim this e-wallet credit, resulting in a total allocation of RM800 million.

Focus 3: Women & Children

Tan Sri Speaker Sir,

47. WOMEN are a blessing. They not only build a harmonious family as well as contribute towards the prosperity of the nation. Gender Focal Teams will be established in every ministry and agency to ensure that all policies formulated will take into account gender considerations.

48. We as parliamentarians in this August House were party to the approval of the Anti-Sexual Harassment Bill 2021. This is a firm commitment to eradicate all forms of sexual harassment as well as to raise awareness that sexual harassment cannot be accepted as societal norms. Towards this, the Tribunal for Anti-Sexual Harassment will be established in early 2023.

49. In dealing with mental health issues and domestic violence, the Government will reinforce Local Social Suppsort Centres. A total of RM8 million is allocated for these centres to serve as a location to provide early intervention as well as psychosocial advocacy and counselling. The Government will also continue to collaborate with relevant NGOs and shelters such as P.S. The Children in supporting the victims.

50. Based on the Malaysia National Cancer Registry Report 2012-2016, breast cancer is the topmost type of cancer diagnosed in women, accounting for a third of total cancer cases amongst women. Next year, the Government will increase screening tests by subsidising mammogram tests and cervical cancer screening programmes for women with a total allocation of RM11 million.

51. Cervical cancer screening will also be piloted using a new PCR screening test method pioneered by the ROSE Foundation in collaboration with Universiti Malaya and Universiti Malaysia Sarawak.

Tan Sri Speaker Sir,

52. I have met Puan Padzilah Sulaiman, the owner of Siti Khadijah's telekung and was impressed by her achievements. In 2009, she started a small business by selling telekung in Sungai Merab, Bangi. In expanding her business, she utilised various Government facilities. Currently, she owns more than 40 boutiques in Malaysia and Indonesia.

53. Therefore, to encourage more women entrepreneurs grow their businesses and enhance their marketing strategy, a total of RM235 million of financing will be provided specifically for women under BSN Semarak-Nita, Tekunita TEKUN, DanaNITA MARA and Biz Lady Bank Rakyat schemes.

54. As of October 2022, women held 29% of board positions for the top 100 public listed companies and all these 100 companies have at least one woman represented on their boards.

55. In order to further strengthen the role of women in corporate sector leadership, the Securities Commission will introduce a special training programme to enhance women's skills, identify and subsequently increase the numbers of qualified women to be appointed as board members. I believe that current political parties are busy identifying more women candidates to be nominated in the upcoming general election.

56. Finally, to encourage women to return to the workforce after a career break, the Government proposes income tax exemptions on the income received from 2023 to 2028 year of assessment.

Tan Sri Speaker Sir,

57. It is important to focus on children’s welfare aspects. The Government will allocate RM188 million for early childhood education programs under the Community Development Department or KEMAS. This allocation includes the construction of 10 KEMAS nurseries including three new projects in Port Dickson, Negeri Sembilan, Limbang, Sarawak and Pasir Putih, Kelantan. As announced by YAB Prime Minister, the allowance for KEMAS voluntary community assistants will be increased in 2023.

58. To ease the financial burden for parents who provide early education for their children, the Government has agreed to extend until the year of assessment 2024, the tax relief of up to RM3,000 on fees paid for TASKA and TADIKA registered with the Government.

59. According to the Department of Statistics Malaysia, the country’s fertility rate in 1970 was 4.9 babies for every woman, whereas it has currently decreased to its lowest rate of 1.7 babies. Meanwhile, children specifically from vulnerable families, face the problem of malnutrition to the extent it stunts their growth, what more since the Covid-19 pandemic hit.

60. To increase the birth rate as well as reduce the incidence of stunting among children, under the Cahaya Mata Keluarga Malaysia initiative, mothers from Bantuan Keluarga Malaysia (BKM) households who give birth in 2023 will be provided a one-off cash assistance of RM500, with a total allocation of RM150 million.

Focus 4: Youth

Tan Sri Speaker Sir,

61. The youth represent more than a quarter of the country's population. Indeed, it is in their hands to determine the country's future.

62. While the country has achieved full employment, the unemployment rate for those aged 25 years and below, including school leavers and graduates from higher education institutions, is at the level of 11% in the second quarter of 2022. This issue will continue to be given due attention.

63. To ensure the youth receive appropriate access to employment, the Government will provide hiring incentives under SOCSO to employers who hire youth aged between 18 to 30 years old who have been unemployed for more than three months. In addition, this hiring incentive will also be extended to employers who hire TVET graduates.

64. Malaysia has indeed produced many young successful businessmen. This includes Arun Prasanth, a young entrepreneur providing cleaning services for homes and offices since 2018. Helped by a RM20,000 loan under the BSN Mikro Belia scheme, Arun’s average annual sales has reached RM200,000.

65. To encourage more youth to venture into business, a total of RM305 million financing facilities reserved for youths will be provided by SME Bank, TEKUN, MARA, BSN and Agrobank.

66. The Penjaja Muda Keluarga Malaysia scheme by BSN with a fund of RM50 million will offer loans of up to RM50,000 potentially benefitting 10,000 youths who can generate their own income such as through operating a food truck business.

67. To assist the B40 especially youths to earn an income through services such as taxi, bus and e-hailing, the Government has agreed to waive the fees of getting taxi, bus and e-hailing licenses under MyPSV programme. In addition, the Government has also agreed to waive the fees for B40 in getting the B2 motorcycle licence.

68. Further, to further encourage youth to work, the TEKUN Mobilepreneur Financing Scheme will be continued with RM10 million to finance youth interested to provide delivery services using motorcycles.

69. Pakej Remaja Keluarga Malaysia has helped the youth to access an affordable prepaid package with a subscription to internet data plan of only RM30 for three months. To help bridge the digital gap among the youth, as well as facilitate learning sessions, this initiative will be extended until April 2023.

70. Melentur buluh biarlah dari rebungnya. This year, e-Pemula offered e-wallets credits of RM150 to the youth. In line with Yang Amat Berhormat Prime Minister’s commitment to improve this initiative, the e-Pemula initiative will be continued with an increase to RM200 for the benefit of 2 million youths aged between 18 and 20 years old and full-time students aged 21 years old and above with an estimated total allocation of RM400 million.

Focus 5: Social Protection

Tan Sri Speaker Sir,

71. In ensuring the holistic well-being of the Rakyat, the social protection agenda will continue to be given serious attention. In 2020, only a handful of gig riders were covered but following the Government subsidising their contributions, more than 260,000 people were protected under the Self-Employment Social Security Scheme (SKSPS) PERKESO.

72. To alleviate the burden of SOCSO payments by self-employed individuals, the Government will bear 80% of the contribution value. This indicates that self-employed individuals such as food delivery drivers, farmers, fishermen, FINAS artists, and hawkers will only have to pay 20% of contributions. Next year, a total of RM150 million will be allocated and extended to those who are self-employed such as taxi drivers and gig workers from information technology sectors.

73. Next year, the Government will start to gradually make mandatory SKSPS contributions for all self-employed sectors, particularly the high-risk sectors. The implementation will be phased, commencing with the public transportation sector and goods or food delivery sectors.

74. GIven the importance of building sufficient retirement savings, the EPF voluntary contribution limit will be raised from RM60,000 to RM100,000 per year. To further encourage voluntary contribution, the Government will also expand the scope of tax relief for life insurance premiums or life takaful contribution by including voluntary contributions to EPF of up to RM3,000.

75. I am pleased to announce that the I-Saraan programme will be extended to 2023 and will be improved through raising the matching contribution ceiling from RM250 to RM300. With a total allocation of RM30 million, this initiative is expected to help more than 100,000 contributors.

76. In appreciation of the contribution of housewives, the Government will extend the Kasih Suri Keluarga Malaysia Programme to 2023 and enhance the programme through additional protection under the SOCSO Scheme. Housewives who make a EPF contribution of at least RM60 annually will stand to receive a Government matching incentive worth up to RM600 per year, comprising RM480 of EPF contributions and RM120 contributions for SOCSO coverage. This programme is expected to benefit 200,000 housewives with total allocation of approximately RM120 million.

77. To increase the equity holdings among Bumiputera, I am pleased to announce that the maximum investment limit for Amanah Saham Bumiputera (ASB) and ASB2 has been increased from RM200,000 to RM300,000.

78. In addition, BSN will also provide soft loans to assist B40 Bumiputera in investing with ASB with loans offered at the rate of 1.5 % annually, with a fund size of RM100 million.

Focus 6: Cost of Living

Tan Sri Speaker Sir,

79. Overall, the Government will allocate over RM55 billion for subsidies, aid and incentives under Budget 2023. This large amount of expenditure is provided to mitigate the challenge of rising cost of living, in conjunction with other measures such as, through price controls on goods and services.

80. The Government is committed to ensuring that basic goods such as rice, cooking oil, LPG gas, petrol, and diesel reach the hands of the rural population at reasonable prices. Next year, RM200 million will be provided to support the cost of transportation and distribution of essential goods. The Government will also expand the coverage of the programme to 23 new areas, including Kampung Passin in Mukah, Sarawak, and Kampung Tawayari in Lahad Datu Sabah.

81. The Jualan Murah Keluarga Malaysia (JMKM) programme was implemented since last August and has significantly benefited consumers by offering essential goods at up to 20% cheaper than prevailing market prices. Since its launch, JMKM has been held in over 500 locations, and this week was held in Kanowit, Sarawak.

82. Looking at the positive impact of JMKM, particularly for B40 households, the Government is committed to continuing this programme in 2023 with an allocation of RM100 million. JMKM will be implemented across the country, covering 600 DUN and 13 Parliament of the Federal Territory in addition to being extended to public universities.

Focus 7: Jobs & Skills Training

Tan Sri Speaker Sir,

83. Since the outbreak of Covid-19, employment issues have continued to be the Government's primary focus. In 2022, various initiatives under the Jamin Kerja Keluarga Malaysia have successfully provided job opportunities and skills training to more than 310,000 people. While we have reached full employment, the focus will still need to be given to ensure career opportunities for particular social groups.

84. Next year, the Government will continue the Hiring Incentive under SOCSO to encourage employers to provide new job opportunities for unemployed members of Keluarga Malaysia particularly from among the disabled, Orang Asli, ex-convicts, and women returning to work. For this, a hiring incentive of between RM600 to RM750 per month will be paid for three months to the employer. These incentives will also be provided to veterans and also employers and Private Employment Agencies that replace foreign workers with local workers.

85. Under this Hiring Incentives, SOCSO will be provided RM150 million and is expected to provide career opportunities for more than 70,000 job seekers.

86. To ease the job seekers' burden, SOCSO will also provide mobility assistance of RM500 to those who secure employment outside of their state of residence. Meanwhile, a mobility assistance of RM1,000 will be provided for work related migration from Sabah or Sarawak to the Peninsular and vice versa.

87. Since the MySTEP initiative was implemented, it has successfully offered more than 118,000 job opportunities. Thus, MySTEP will be continued with 50,000 career opportunities on a contract basis, comprising 15,000 jobs in the public sector and 35,000 jobs with GLCs. Public sector jobs under MySTEP will be extended until 31 December 2023.

88. On top of that, I’m pleased to announce that the Government will increase the MySTEP salary rate by RM100, which is between RM1,500 to RM2,100 compared to RM1,400 to RM2,000 previously.

89. Keluarga Malaysia will continue to be provided with opportunities to pursue upskilling and reskilling programmes to better prepare for the needs of the job market.

90. HRD Corp will provide a total of RM750 million, which will provide skills training to more than 800,000 workers to increase their productivity and enhance income opportunities.

91. Towards developing new talents, the Securities Commission, in collaboration with the Capital Market Development Fund, will implement Capital Market Graduate Programme involving a fund of RM30 million to enhance the employability of 9,000 graduates for careers in the capital market.

92. Besides that, RM20 million will be provided for Program Usahawan Siswazah (PUSh) to enable 1,000 graduates to venture into entrepreneurship.

Focus 8: Education & TVET

Tan Sri Speaker Sir,

93. Education is the best investment for a brighter future for our nation. The Ministry of Education continues to receive the largest allocation of RM55.6 billion compared to RM52.6 billion this year.

94. Early Schooling Assistance or Bantuan Awal Persekolahan (BAP) has eased the burden of parents with an income of RM3,000 and below in providing assistance for parents to equip their schoolgoing children. Starting in the year 2022, the BAP rate was increased from RM100 to RM150 per child.

95. For 2023, I am pleased to announce Bantuan Awal Persekolahan will be given to all students regardless of their parents’ income.

96. For example, if a family has three children in school, they are eligible to receive a BAP of RM450! Insya-allah, this aid will be distributed in January 2023, and it is hoped that it will ease the financial burden of parents. A total of RM825 million is provided for this purpose, which is much larger than that provided this year of RM450 million.

97. Rancangan Makanan Tambahan (RMT) has been implemented since 1979 to ensure that students from low-income families get sufficient nutrients. As announced in Budget 2022, the government has improved the RMT by providing milk to participating children every school day.

98. To enhance this programme, the Government will increase the per student rate for RMT supplied food from RM2.50 to RM3.50 cents for the Peninsular and RM3 to RM4 for Sabah, Sarawak, and Labuan. These rate increments will take effect starting this month, October 2022.

99. A total of RM777 million is provided for RMT, a significant increase compared to RM280 million in 2020 due to the rise in the number of recipients, rate increases, and the provision of daily milk supply. With that, more than 800,000 students, 7,300 food operators, and local milk suppliers will benefit from this improvement.

100. Next year, a total of RM2.3 billion will be allocated to provide a conducive and safe learning space for school students. This is a significant increase compared to the RM1.7 billion allocation this year.

101. Of that amount, RM1.1 billion is provided for school maintenance and repair works, including for National Schools, National-type Chinese Schools, National-type Tamil Schools, and religious schools.

102. A total of RM1.2 billion is provided to upgrade the infrastructure of dilapidated schools, especially to replace old wooden buildings for comfort and safety of our children in Sabah and Sarawak, with 123 projects in Sabah and 182 projects in Sarawak.

103. To meet local needs, next year, the Government will build five new schools at the cost of RM430 million involving SMK Nabalu in Sabah, SMK Dudong in Sarawak, SK Paya Dusun in Terengganu, SK Cyberjaya 2, and SMK Denai Alam in Selangor.
Tan Sri Speaker Sir,

104. The country's higher education achievements continue to impress the world. Next year, the Ministry of Higher Education will be allocated RM1.5 billion.

105. The Government is committed to ensuring that Malaysian youth pursue their education until a tertiary level. Thus, RM3.8 billion will be provided as scholarships and educational loans to benefit our youth.

106. Pursuant to the concern expressed by YAB Prime Minister, the Cost of Living Allowance for MARA and PETRONAS students has been increased. In addition, I am pleased to announce that the Cost of Living allowance for local JPA-sponsored students and officers will be standardised and increased by RM100 per month at all levels of study, making Elaun Sara Hidup of a JPA-sponsored student between RM730 to more than RM980 per month.

107. The Government will continue to focus on the education of Bumiputera, especially for low-income families. Next year, a large part of the allocation of RM6.6 billion provided for MARA, Yayasan Peneraju, and UiTM will be to provide Bumiputera with access to education loans and opportunities to pursue professional fields such as engineering.

108. During Jelajah Bajet 2023, I had the opportunity to visit photovoltaic solar systems installed by USM in 90 locations to supply clean energy on the USM campus. Thus, the Government will provide RM10 million to encourage public universities to inculcate green campus initiatives. In addition, more than RM300 million will also be provided for upgrading and maintaining public university facilities.

109. In addition, the digital network of our higher education institutions will continue to be improved. With an allocation of RM35 million, The Malaysia Research and Education Network (MYREN) project at public universities, polytechnics, and community colleges will continue to be upgraded in terms of bandwidth capacity.

110. The 2nd of June has been selected as National TVET Day. The Government aims for at least 55% of SPM school leavers to further their studies in TVET by 2025. In line with the agenda to upgrade TVET as led by the National TVET Council, a total of RM6.6 billion is allocated under the seven main ministries implementing various TVET initiatives.

111. Among them, RM180 million is provided as a TVET Training Fund to the Perbadanan Tabung Pembangunan Kemahiran to offer loans for the benefit of 12,000 of Malaysian Skills Certification programme trainees. The Government will also continue the Dual National Training Scheme program with an allocation of RM20 million for the benefit of 3,000 trainees.

112. The Government proposes to extend until 2024, the individual income tax relief of up to RM8,000 for annual net savings into the Skim Simpanan Pendidikan Nasional (SSPN).

113. YAB Prime Minister had previously announced increasing the PTPTN loan rate and computer loans for the M40 group, in addition to exempting PTPTN loan repayments for all students who obtain a first-class bachelor's degree.

114. To the PTPTN loan borrowers, as clearly stated you have a responsibility to settle your debt. It is also in line with the teachings of religion to pay one’s debts. If not paid, we would be denying other youths from benefitting from the same opportunity.

115. Thus, as an initiative to facilitate payment and foster a responsible attitude, YAB Prime Minister has agreed to provide discounts on the PTPTN loan repayment from 1 November 2022 to 30 April 2023 at the following rates:
• First: A discount of 20% on the outstanding debt for full settlement;
• Second: A discount of 15% for repayment of at least 50% of the outstanding debt made in a single payment; and
• Third: A discount of 15% for repayment through salary deductions or direct debit according to a repayment schedule.

Focus 9: Home Ownership

Tan Sri Speaker Sir,

116. Majlis Perumahan Mampu Milik Negara or the National Affordable Housing Council has targeted the construction of 500,000 affordable homes nationwide by 2025. To encourage first home ownership, previously, stamp duty for homes valued at RM500,000 and below were fully exempted until the end of 2025. I am pleased to announce that, with respect to property transfer documents and loan agreements for homes valued between RM500,001 and RM1 million, the stamp duty exemption will be increased from 50% to 75% and effective until 31 December 2023.

117. For instance, a 100% exemption on purchasing a house worth RM300,000 will save RM6,500, while a 75% exemption on purchasing a house worth RM750,000 will save RM15,000.

118. Currently, stamp duty exemption is fully granted on instruments of real estate ownership transfer between husband and wife, however between parents and children, only 50% exemption is allowed. Since a parents' love cannot be considered as only half, the Government proposes that from 2023, all real estate transfers based on love and affection between families, such as from husband to wife, father to child, or grandfather to grandson, will only be subject to a stamp duty at the flat rate of RM10.

119. Next year, the allocation for the construction of new rural houses and renovation of rural houses will be increased from RM361 million to RM460 million. On top of that, the ceiling rate for building new houses has also been raised, for example, from RM68,000 to RM79,000 per unit in Sabah and Sarawak. In relation to that, 3,000 new homes will be built, with more than half in Sabah and Sarawak.

120. Meanwhile, for the urban areas, an allocation of RM367 million will be provided for Program Perumahan Rakyat (PPR), including new projects in Marang, Terengganu and Arau, Perlis for the benefit of 12,400 potential new residents. At the same time, the Rumah Mesra Rakyat program will involve the construction of 4,250 housing units with an allocation of RM358 million.

121. Syarikat Jaminan Kredit Perumahan (SJKP) provides Government guarantees on housing loans mainly to help borrowers without a fixed income, such as e-hailing workers, and has benefitted more than 14,000 borrowers. To help up to 12,000 borrowers in 2023, the Government guarantee facility through SJKP will be increased by RM3 billion.

122. During a visit to PPR Lembah Subang 1, #TeamMOF met Kak Noraishah, who has now become a respected community leader. She is very active and often collaborates with the Local Authority and Yayasan Hasanah in contributing to community development through entrepreneurship and women's empowerment programs to enable them to be independent. My batik handkerchief today is also the handiwork of female entrepreneurs at a PPR.

123. To build a harmonious community, the Government is committed to:
• First: ensuring the safe condition of low and medium-cost strata homes through maintenance, including replacing obsolete lifts with an allocation of RM290 million;
Second: improving mobile health services, including in low-cost housing areas, with an allocation of RM22 million;
• Third: providing classes for the children of low-cost home residents who fell behind in education during the Covid-19 pandemic; and
• Fourth: intensified income-enhancing activities by Yayasan Hasanah, including helping food entrepreneurs utilise Cloud Kitchen platforms

Focus 10: Public Transportation

Tan Sri Speaker Sir,

124. To encourage Keluarga Malaysia to use public transport, the Government will continue to subsidize service costs and increase public transport accessibility throughout the country.

125. Stage bus services are essential, especially for city dwellers who use public transport to work. Next year, RM180 million is provided to improve public bus accessibility for citizens in Melaka, Kota Kinabalu, and Kuching. For the benefit of Kedah residents, the Government will also replace 18 stages buses operated by MARA.

126. Air service is the primary mode of transportation for the people of rural Sabah and Sarawak. For the benefit of rural residents, the Government is committed to continue the subsidisation of air transport services with an allocation of RM209 million.

127. The Government will also improve facilities at seven airports in Sabah and Sarawak by building wheelchair ramps to benefit around 2,300 MASWings wheelchair bound users.

128. On average, Klang Valley residents who use rail and bus facilities to work spend around RM200 monthly. To reduce travel costs, the Government will continue the My50 monthly pass initiative to benefit nearly 180,000 users. Through My50, users actually enjoyed a subsidy of RM150 per month or RM1,800 per year from the Government.

129. During Jelajah Bajet 2023 to Kelantan by Yang Berhormat Sipitang, the JKR briefed regarding the ferry services between Pengkalan Kubor and Takbai, Narathiwat, Thailand, which serves 30,000 residents of Tumpat. Hence, the Government has agreed to provide RM9 million for JKR to replace the existing ferry over 34 years old.

130. Specifically for individual taxi owners, the Government has agreed to extend the scope of the exemption from excise duty and sales tax on the sale, ownership transfer, personal use, or disposal of car taxis to executive taxis, TEKS1M and airport taxis.

Focus 11: Community

Tan Sri Speaker Sir,

131. The community empowerment agenda will focus on providing assistance, infrastructure facilities, and socioeconomic programs.

132. Overall, the Orang Asli community will be allocated a sum of RM305 million, an increase compared to RM274 million provided this year. These allocations, among others, include the social assistance programs, programme to improve the quality of life and Orang Asli Settlement Integrated Development.

133. For the next year, the Government will carry out the Plantation Replanting Projects for Orang Asli, including replanting of rubber and oil palm, which will benefit more than 2,100 Orang Asli, including in Kemaman, Terengganu; Bera, Pahang; and Gua Musang, Kelantan. The Government will also intensify the Entrepreneurship Development Program to provide assistance with business equipment and entrepreneurial guidance to 550 Orang Asli.

134. Dr Zainab Along, Orang Asli from the Jakun tribe, has furthered her studies through MARA educational loans. She successfully obtained a Master's Degree in Applied Science at the University of Plymouth and a Doctorate in Architecture from the University of Newcastle.

135. So far, MARA provides education loan opportunities to 10 Orang Asli students annually to study abroad. Next year, to inspire more students from the Orang Asli community, I'm pleased to announce that Foundations under the Government Linked Companies (GLC) will also sponsor at least 10 Orang Asli to further their studies abroad.

136. Next year, almost RM1 billion will be specifically provided for the welfare of the elderly, which is a significant increase compared to RM580 million in 2020 due to the rise in recipient numbers following the increase in the elderly welfare assistance rate and the increase in eligibility criteria.

137. The Government also continues to provide grants amounting to RM21 million to support the operation of private care institutions for the elderly, children, and disabled run by NGOs.

138. The welfare of people with disabilities will continue to be given due attention, in addition to initiatives to help the disabled to realise their full potential. For the year 2023, a total of RM1.2 billion is allocated specifically for the disabled, including assistance for chronic patients care, allowance for disabled workers who cannot work, and allowances for disabled workers.

139. To encourage more disabled to do business, the Government will continue to empower Skim 1 OKU 1 Perniagaan by exempting businesses by disabled from paying registration fees and business license renewal fees under the Companies Commission of Malaysia.

140. During a #TeamMOF engagement session with a disabled community, a proposal was raised to increase door-to-door services in facilitating the movement of the disabled community. Therefore, in realising this proposal, RM10 million will be allocated to provide travel vouchers to the disabled via e-hailing services.

141. Education for disabled children will continue to be enhanced. In safeguarding the welfare of special education students and teachers, the Government will allocate RM20 million for teaching aids and facilities improvement in special needs schools.

142. To give parents the opportunity to send their disabled children to a safe nursery while they are at work, the Government will provide special incentives to establish 50 new TASKA OKU in addition to the existing 13.

143. Currently, about 260 thousand disabled are eligible to receive BKM. To provide more complete and accurate access to information, the Government will establish Pusat Panggilan Mesra OKU. This center will pilot use of video call mode and signs interpreter services to convey information to the disabled.
Tan Sri Speaker Sir,

144. Prisoners also have the opportunity to work in various fields managed by the Prisons Department, including the agricultural sector. For 2023, the Government will provide RM10 million under the Agropenjara initiative to expand agricultural and plantation activities involving 70 acres of prison land. Part of this allocation is to expand honey bee farming in Penjara Prabebas Dusun Dato' Murad, Melaka, and to increase the supply of fresh freshwater fish at Kamunting Correctional Center, Perak.

145. From 2023 onwards, the additional tax deductions provided to employers who employs ex-convicts will also be extended to employers who employ former students of the Henry Gurney School as well as Government protection and rehabilitation institutions and non-Government care centres registered under JKM.

146. Regarding the welfare of children under the care of JKM institutions, the Government will establish the Pusat Transit-Anjung Sinar as a centre to provide temporary shelter before getting a job and starting a new life. GLCs will also help them with suitable job opportunities.

Focus 12: Paddy Farmers, Fishermen & Smallholders

Tan Sri Speaker Sir,

147. The Government will continue to ensure the welfare and support of rice farmers, fishermen, and smallholders. For the next year the Government will provide the following:
• First: various subsidies and incentives include subsidies for the price of rice, rice fertilizer, Huma rice fertilizer, and rice production incentives, as well as fishing incentives with an allocation of RM1.8 billion, an increase of RM100 million compared to this year;
• Second: aid to rice farmers has been reintroduced for the year 2023 with RM200 per month for three months per season to 240,000 rice farmers with an allocation of RM228 million;
• Third: Bantuan Musim Tengkujuh (BMT) to rubber smallholders amounting to RM200 per month for four months to 320,000 smallholders with an allocation of RM256 million. This means that smallholders will get BMT of RM800 compared to RM600 previously;
• Fourth: To increase farmers' income, the Insentif Pengeluaran Lateks was introduced together with the TARGET programme to improve the supply chain of rubber raw materials through cooperatives; and
• Fifth: Skim Perlindungan Pertanian will be introduced to protect agricultural producers from unpredictable risks such as weather, disease, and pests, and will initially be piloted with paddy farmers.

STRATEGY 3: BUSINESS SUPPORT

Tan Sri Speaker Sir,

148. Budget 2023 is also responsive in supporting business activities, particularly Micro, Small and Medium Enterprises (MSMEs). The Government will actively assist MSMEs companies through various incentives and financing facilities.

Focus 1: Tax Deductions & Cash Grants

149. Based on RMK-12 targets, MSMEs are expected to contribute 45% to GDP and 25% to total national exports by 2025.

150. To demonstrate Government’s commitment to support and empower MSMEs, the Government proposes that the tax rate on chargeable income for the first RM100,000 be reduced from 17% to 15%. This reduction will provide savings of up to RM2,000 each for approximately 150,000 MSMEs taxpayers.

151. In addition, to assist especially the micro small traders, the Government proposes to give a one-off grant of RM1,000 to all registered MSMEs and registered taxi drivers. It is expected that 1 million businesses will benefit from this grant with a total allocation of RM1 billion.

Focus 2: Financing Facilities

152. To boost business activities, SemarakNiaga 2023 is enhanced with a total value of RM45 billion compared to the RM40 billion announced for 2022. This value includes direct loans, alternative financing and financing guarantees.

153. Next year, RM1.7 billion will be available as microcredit loans and financing facilities to benefit of small entrepreneurs. Among others include:
• First: BSN microcredit loans with funds of RM950 million, which includes RM350 million for the Skim Penjaja Kecil Keluarga Malaysia, of which RM150 million is for Bumiputera entrepreneurs;
• Second: Loan facilities for small entrepreneurs under TEKUN, specifically for Bumiputera, women, youth, and the informal sector with an allocation of RM300 million;
• Third: Financing facilities specifically for the Chinese community with an allocation of RM200 million with an interest rate as low as 4%;
• Fourth: The Micro-funding scheme under the Indian Community Entrepreneur Development Scheme (or SPUMI) with a fund of RM25 million. RM100 million is also provided under MITRA, among others, for the development of entrepreneurs; and
• Fifth: The iTEKAD social finance programme provided RM10 million and was also matched with funds from financial institutions through zakat and cash waqf contributions.

154. The cooperatives have helped their members and contributed to the country's development since 100 years of their establishment in Malaysia. Next year, RM100 million will be allocated for Tabung Modal Pusingan Suruhanjaya Koperasi Malaysia to provide funding to help cooperatives develop the agro-food industry. This effort is also supported by the Supply Chain Empowerment for Cooperative Program towards a consistent supply of food and consumer needs at lower prices.

Tan Sri Speaker Sir,

155. In addition to micro-financing, the Government will also provide loans that support small and medium-sized companies. Through Bank Negara Malaysia, RM10 billion in loan funds are provided to encourage the automation and digitization of SMEs and support the food security agenda and the recovery of the tourism sector.

156. TERAJU, with a total allocation of RM135 million will provide financing support and facilities under the Dana Kemakmuran Bumiputera.

157. A total of 200 million worth of funds will be allocated under Perbadanan Usahawan Nasional Berhad (PUNB) to provide financing facilities and entrepreneur development programmes for Bumiputera in the retail sector.

158. Lastly, to complement these financing initiatives, the Government agrees to extend 100% stamp duty exemption on restructuring or rescheduling loans or financing agreements until 2024.

Focus 3: Strategic Financings, Alternatives & Financing Guarantees

Tan Sri Speaker Sir,

159. The Government also finances strategic projects through Bank Pembangunan Malaysia Berhad (BPMB). Various financing funds are offered with an interest subsidy of 1.5% per year. Among others includes:
• First: Sustainable Development Financing Scheme worth RM1.5 billion to facilitate the effort to achieve the 17 sustainable development goals;
• Second: Tourism Infrastructure Scheme amounting to RM1 billion to strengthen the recovery of the tourism sector, including funding for hotel rehabilitation, urban renewal, and heritage conservation; and
• Third: Maritime and Logistics Scheme of RM1 billion, expanded scope to support Malaysia to support oil and gas, shipbuilding, and ship repair.

160. The Government will also continue the Rehabilitation and Support Through Equity faciity (or RESET) and Skim Modal Kerja through BPMB with a total fund amounting to RM1 billion, to provide support in the form of equity injection and working capital for high-potential companies affected by Covid-19.

161. Since 2009, the Government, through Syarikat Jaminan Pembiayaan Perniagaan (SJPP), has assisted SMEs in obtaining bank loans by guaranteeing almost 50,000 companies with a total guarantee value of RM48 billion.

162. For 2023, SJPP will provide financing guarantees of up to RM9 billion for SMEs, especially for strategic sectors such as agro-food, sustainable technology, tourism, and oil and gas. This guarantee initiative will continue to help SME companies to obtain new financing that was previously challenging.

163. New forms of financial innovation, such as equity crowdfunding (ECF), will continue to be supported. This instrument successfully provides capital funding to start-up companies such as Green Lagoon Technology, a biogas plant operator, through the cyclical economy to generate green energy from palm oil waste. Likewise, social enterprises like Athena Holdings are leading innovative efforts to provide eco-friendly products for women.

164. To support start-up companies in the sustainability and social enterprise agenda, the Government will provide Malaysia Co-investment Fund (MyCIF) funds amounting to RM30 million in addition to ECF funds.

165. In addition, the Government also plans to expand the scope of tax incentives for individual investors in start-up companies through equity crowdfunding to cover investments made through Limited Liability Partnership Nominee companies.

Focus 4: Recovery of Tourism Industry

Tan Sri Speaker Sir,

166. Alhamdulillah, since the reopening of our borders, the tourism sector has started to recover. As of July, Malaysia has received 3.2 million tourist arrival with RM9.4 billion in tourism revenue. However, this still does not mirror pre-Covid-19 achievements, among others, due to China's policy prohibiting its citizens from going abroad.

167. For the year 2023, the Government targets the arrival of more than 15 million foreign tourists with a receipt of RM47.6 billion. RM200 million will be allocated to strengthen the recovery of the tourism sector with incentives, promotion, and marketing initiatives.

168. Among others, the Government will focus on high-value tourists from specific market segments or niche market segments such as ecotourism, golf, scuba sports, and international exhibitions and conventions.

169. A total of RM90 million is allocated as matching grants, such as the Geran Padanan Galakan Melancong (GAMELAN) programme, which involves promotion and marketing campaigns with the industry. Matching grants are also provided for organizing tourism programs, including international sports events.

170. There are also matching grants to encourage charter flight services, especially from the Middle East and East Asia. Furthermore, the Government, together with Malaysia Airport Holdings Bhd and international airlines, will work on new direct flight routes from international destinations, such as from West Asia and the Middle East, to Malaysia, including the international airports of Kota Kinabalu and Penang.

171. The ecotourism segment has become one of the attractions for foreign tourists to Malaysia. This includes THE HABITAT Bukit Bendera, which succeeded in becoming a tourist destination. Next year, 10 million will be provided through a joint venture with a network of ecotourism industry players for:
• First: Upgrading ecotourism attractions in Gua Kelam, Perlis;
• Second: Pioneering sustainable solid waste management efforts in Pulau Perhentian, Terengganu; and
• Third: Intensified activities at Taman Pertanian Jubli Perak Sultan Ahmad Shah, Kuantan, Pahang.

172. To promote Keluarga Malaysia to travel to domestic destinations of their choice, the Government has allocated RM25 million to provide incentives to the people in the form of discounts, vouchers, and rebates for accommodation, tourism packages, handicrafts and works of art up to RM100.

173. Hotels in Malaysia should play a role in displaying handicrafts produced by local entrepreneurs to tourists. Khazanah Nasional Bhd's 'One and Only Hotel' in Desaru is a hotel that displays 100% Malaysian handicrafts. To further encourage the tourism sector to prioritize local handicrafts, the Government proposes a special tax deduction for hotels that buy local handicraft products limited up to RM500,000.

174. Support and funding for tourism industry operators, such as Wan Muhamad Ihsan, who opened a container hotel in Pulau Pangkor, have benefited from Government tourism funding to maintain his employees during the pandemic period. To help entrepreneurs like Wan Muhamad Ihsan, the Government proposes the following initiatives:
• First: BNM Tourism Financing (PTF) with RM500 million allocation with an increase of financing size from RM300,000 to RM500,000;
• Second: 100% tax exemption on statutory income for tour operators who guide at least 200 foreign tourists a year or at least 400 local tourists;
• Third: Excise duty exemption of 50% be given to tourism operators on the purchase of new CKD tourism vehicles such as hire and drive cars and excursion buses; and
Fourth: Reinvestment Allowance for selected hotel and tourism projects will be introduced under the Income Tax Act 1967.

175. I also had the opportunity to visit Petaling Street, which has been given a new life due to ThinkCity's collaboration with DBKL. To further transform Kuala Lumpur City Center into a creative and cultural hub, RM10 million is allocated to ThinkCity for the Kuala Lumpur City Center restoration initiative.

176. To make Malaysia a major health tourism destination, existing tax incentives for the export of private healthcare services will be extended until 2025. In addition, Malaysia Healthcare Travel Council will be provided RM20 million to strengthen Malaysia's position as a destination of choice for health tourists.

SECOND AGENDA: RESPONSIBLE BUDGET

Tan Sri Speaker Sir,

177. To ensure the financial sustainability of the Government, Budget 2023 is responsible for implementing fiscal reform measures. This Budget is also committed to building the country's resilience in preparation for any future challenges.

STRATEGY 1: FISCAL RESPONSIBILITY

178. The Budget for 2022 was originally allocated RM332 billion with a 6% deficit target. Due to global inflationary pressures and rising commodity prices, the Government has taken responsive measures by controlling the price of goods and increasing subsidies for consumer essentials. To protect Keluarga Malaysia, the allocation for dependents, assistance, and subsidies is expected to increase from RM31 billion to RM77.7 billion.

179. However, the Government remains responsible for managing the country's finances to ensure that additional expenditure is matched with additional revenue or other expenditure savings. As a result, the Government was able to control and reduce the deficit level to 5.8% of GDP in 2022.

180. Budget 2023 will be the largest budget ever, with an increased allocation of RM372 billion. As a responsible Government, the Budget will be balanced with the commitment to implement fiscal consolidation to ensure the country’s financial sustainability.

181. With an expected revenue collection of RM272.6 billion, the fiscal deficit for 2023 is projected to decline to 5.5% of GDP, compared to 5.8% in 2022. Based on the Medium Term Fiscal Framework (MTFF) as a budget planning guide for a three-year period, the deficit level for 2023 to 2025 is expected to decline to an average of 4.4% compared to GDP. The Government will continue to intensify its efforts to improve the financial position in the medium term to achieve a deficit of 3.5 percent of GDP, as targeted in RMK-12.

Focus 1: Fiscal Consolidation

182. As announced in Budget 2022, the Government plans to introduce the Fiscal Responsibility Act (FRA) to increase the transparency and accountability of the country’s fiscal management.

183. Various engagement sessions were held to ensure the formulation of a comprehensive FRA and meet the goal of rebuilding the country’s fiscal resilience to face any upcoming challenges. Insya-Allah, I am pleased to inform you that Fiscal Responsibility Bill 2022 will be presented at this Meeting as well, assuming there are no unforeseen circumstances.

Focus 2: Revenue Sustainability

Tan Sri Speaker Sir,

184. Despite the economic uncertainty, the Government must ensure a sustainable source of revenue to finance the country’s expenditure. To improve the efficiency of tax administration, the Government is implementing two initiatives as follows:
First: e-Invoicing will be implemented in phases from 2023 with the system development, and pilot project involving selected taxpayers; and

Second: Tax Identification Number (TIN) is implemented in 2022 to broaden the tax base. From the year 2023, individual citizens and permanent residents who reach the age of 18 be given TIN automatically and made mandatory for all stamping documents and instruments.

185. To enable Malaysia to broaden its tax base while remaining competitive in attracting foreign direct investment, the Government will introduce the minimum effective tax rate at the global level as recommended under Pillar 2 of the BEPS Action Plan 1 and implement the Qualified Domestic Minimum Top-up Tax upon completion of detailed study and targetted for the year 2024.

Focus 3: To Address Revenue Leakage

Tan Sri Speaker Sir,

186. The Government will continue to address the issue of revenue leakage. The strategy to eradicate cigarette and liquor smuggling activities is being carried out through the Multi-Agency Task Force and will be continued with the following steps:
• First: Tighten the control of cigarette and liquor imports through legal landing places, including private jetties;
Second: Limit liquor transhipment activities to certain ports only;
• Third: Bukit Kayu Hitam Immigration, Customs, Quarantine and Security Complex as a single exit point for the northern region; and
• Fourth: provide special rewards to strengthen efforts to combat cigarette and liquor smuggling.

187. The Government will also implement comprehensive reforms in 2023 to address the leakage of essential goods subsidies. Among the main focuses are to ensure that subsidised petrol is used by citizens and not by non-citizens; that subsidised diesel is enjoyed by vehicle carriers and not smuggled to business premises or abroad; that subsidised cooking oil and LPG are used by low-income households; and that the quota is not used up by traders.

STRATEGY 2: BUILDING NATIONAL RESILIENCE

Tan Sri Speaker Sir,

188. For the well-being of Keluarga Malaysia, Budget 2023 prioritises efforts to strengthen the country's resilience against any future shocks.

Focus 1: Healthcare

Tan Sri Speaker Sir,

189. According to World Bank data, the total expenditure on healthcare in Malaysia is equivalent to other neighbouring countries which is around 4% of GDP. Next year, the Ministry of Health will be alloc

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