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2009 Budget Highlights

Below are highlights of the 2009 Budget, tabled by Prime Minister Datuk Seri Abdullah Ahmad Badawi at the Dewan Rakyat on 29 August 2008.

  • Budget 2009 is focussed on the well being of all Malaysians, further strengthening the nation’s resilience to mitigate the adverse impact of an increasingly challenging external environment.
  • Themed a Caring Budget, the Budget 2009 has three specific strategies which is ensuring the well being of Malaysians, developing quality human capital and strengthening the nation’s resilience.


  • The government will implement a broad range of measures to reduce the impact of the higher cost of living, particularly among the lower income group and the vulnerables.


  • The government has raised the eligibility criteria for welfare assistance under the Welfare Department, from a monthly household income of RM400 to RM720 for peninsular Malaysia, RM830 for Sarawak and RM960 for Sabah.
  • The government will set up a special fund of RM25 million to channel timely financial assistance to families deprived of their sources of income, particularly arising from accidents to breadwinners.
  • Given the heavy responsibility of caregivers at Rumah Tunas Harapan, the government will increase their allowance from RM600 to RM1,000 a month effective Sept 1, 2008.
  • To assist the lower income pensioners to cope with the recent price increases, government pensioners who had served at least 25 years upon retirement, will receive a pension of not less than RM720 a month, effective 1 Jan, 2009.


  • The government has, through various measures, successfully reduced the incidence of poverty from 5.7 per cent in 2004 to 3.6 per cent in 2007 with the number of hardcore poor declining by 43 per cent from 67,300 in 2004 to 38,400 in 2007.
  • An allocation of RM50 million has been set aside under the Housing Assistance Programme to build 1,400 new houses and repair 1,000 existing houses, with priority given to senior citizens, the disabled and single parents as well as victims of natural disasters.
  • Measures would continue to be taken to increase income and enhance the quality of life of Malaysians in Sabah and Sarawak by improving basic amenities, such as electricity, water and rural roads and for this the government has allocated RM580 million for Sabah and RM420 million for Sarawak.


  • To assist the middle and lower income groups, the government proposes the current tax rebate of RM350 per person be increased to RM400 for those with taxable income of RM35,000 and below.
  • To reduce the tax burden of individuals, especially those dependent on interest income from savings, the government proposed that all interest income for individuals be tax exempted.
  • To mitigate the impact of rising prices on consumers, the government proposes to reduce import duties on various consumer durables from between 10 per cent to 60 per cent to between % per cent and 30 per cent.
  • The government will also reduce the road tax on private passenger vehicles with diesel engines to be the same as those with petrol engines, effective 1 Sept, 2008.


  • Government would give tax exemption to employees who provide subsidise interest on housing, motor vehicles and education loans to employees, with the exemption limited to total loans up to RM300,000. Tax exemption would also be provided for mobile phones as well as internet bills paid by employers, staff discounts of up to RM1,000 a year on company traded goods, staff discounts on services rendered by company and employers who provide childcare allowance of up to RM2,400 a year.
  • Tax exemption would also be provided to employers who include maternity expenses benefits to employees.
  • The eligibility criteria for RM180 Taska fees a month for civil servants, which now stands at monthly household income of RM2,000 has been increased to RM3,000.
  • The free return airfare for government servants to return to their homestate between the peninsular and Sabah and Sarawak once every two years has been reduced to once a year effective Jan 2009.


  • To widen the service network of RapidPenang, an additional 200 buses would be provided and with this the RapidPenang service would be expanded to cover 14 new routes and ridership is estimated to increase to 120,000 passengers daily by end of 2009.
  • To further improve the efficiency of public transportation, a sum of RM35 billion would be expended during the 2009-1014 period. This includes projects to enhance the capacity of existing rail services, build new rail tracks, increase the number of buses as well as provide better infrastructure facilities.
  • To expand the urban rail network in the Klang Valley, a new Light Rail Transit (LRT) line would be built along a 42km route from Kota Damansara to Cheras.
  • The commuter rail services of Keretapi Tanah Melayu Bhd will be further upgraded.
  • An integrated transport terminal is being built in Bandar Tasik Selatan to provide facilities for inter urban taxis and buses, especially the southern region of the peninsular
  • To provide facilities for inter urban taxis and buses from the northern region, a new integrated transport terminal would be built.
  • The government will also provide soft loan facility of RM3 billion under the Public Transportation Fund administered by Bank Pembangunan Malaysia Bhd to finance the acquisation of buses and rail assets.
  • Reduce toll rates by 50 per cent for all buses except at the border entry points namely Johor Causeway, Second Link and Bukit Kayu Hitam for a period of two years effective 15 Sept, 2008.
  • In addition, bus operators would be given sales tax exemption on the purchase of locally assembled new buses and accelerated capital allowance on the expenditure incurred. Road tax will be reduced to RM20 a year for all bus and taxi operators, including rent-a-car and limousine operators.
  • The public Land Transportation Commission would be established under the Prime Minister’s Department to plan, integrate, regulate and improve the overall public transportation services.


  • To government intends to implement several agriculture programmes to ensure adequate food supply and for this a sum of RM5.6 billion has been set aside under the National Food Security Policy for the period 2008 to 2010. This allocation among others is to provide incentives to agriculture entrepreneurs to reduce production costs and encourage higher agriculture output.
  • In an effort to increase fish landings, RM300 million had been allocated and of this, RM180 million is in the form of cost of living allowances to fishermen and fishing boat owners, as well as RM120 million as incentives for fish landings.
  • The government has proposed that the expansion of chicken and duck farms be given Reinvestment Allowance of 60 per cent for a period of 15 years.
  • The government will provide 220,000 padi farmers throughout the country with incentives to increase padi production, involving an allocation of RM1 billion.


  • The government has set up the Urban Microcredit Financing programme, under Amanah Ikhtiar Malaysia (AIM) with a revolving fund of RM100 million and the role of AIM to assist households with monthly earnings of up to RM2,000 in Kuala Lumpur would be extended to other urban areas nationwide starting 2009.


  • A total RM160 million would be allocated to provide better education opportunities as well as improve health and basic amenities for the Orang Asli.
  • The government would extend a monthly allowance of RM150 for the disabled who are unable to work. In addition, the monthly allowance for disabled students in special education schools, will also be increased from RM50 to RM150 while teaching assistants at these schools would be provided incentive payments of RM200 monthly.


  • An allocation of RM330 million would be provided to Jabatan Perumahan Negara to complete 4,400 units of Program Perumahan Rakyat (PPR) Disewa, 1,500 units of PPR Bersepadu and 600 units of PPR Dimiliki. In addition, Syarikat Perumahan Negara Bhd would build 33,000 low cost houses.


  • To encourage home ownership among civil servants, the government intends to improve the terms for staff housing loans including extending the tenure of new housing loans from 25 years to 30 years, provide housing loan facility for renovation works on houses not purchased through government housing loans and extend the housing loan insurance to eligible insurance companies.


  • For the purchase of medium cost houses up to RM250,000, a 50 per cent stamp duty exemption is given only on the instrument of transfer. to further reduce the cost of buying medium cost houses, the government proposes the 50 per cent stamp duty exemption be extended to loan agreements.


  • The Housing Credit Guarantee Scheme, set up to assist those without fixed income to own affordable houses, would have an increased fund size of RM100 million enabling the scheme to guarantee loans amounting to RM2 billion and about 40,000 borrowers would benefit from this facility.


  • The government will provide matching grant to the private sector for the Amal Jariah Programme, set up to repair delapidated houses of hardcore poor nationwide, and RM100 million has been set aside for this purpose. About 30,000 dilapidated houses would be repaired using the fund.


  • The government would continue to provide free health services for Malaysians. A sum of RM13.7 billion has been allocated in 2009 to enhance health facilities and provide equipments, increase supply of medicines, develop human resources, intensify research and enforcement activities as well as build more hospitals, clinics and quarters.
  • To retain the services of medical specialists in the public sector, the incentive allowance for medical specialists would be increased, involving 3,800 specialists with an additional expenditure of RM26 million.
  • The government will increase incentive payments for the flying medical teams in Sabah and Sarawak. For medical assistants, the increase would be from RM20 to RM30 per return trip and for nurses from RM15 to RM30.


  • The government has allocated RM1.8 billion to provide and increase basic amenities and infrastructure in rural areas.
  • The government will intensify efforts to further develop Sabah and Sarawak.
  • For Sabah, an allocation of RM3 billion is given for various infrastructure projects, including 266km of federal and rural roads benefiting more than 550,000 residents.
  • An allocation of RM3.3 billion is provided for Sarawak to implement various projects including the construction of 230km of federal and rural roads benefiting more than 350,000 residents.


  • A total RM2.4 billion has been allocated to enhance facilities as well as undertake training and skills programmes.
  • A sum of RM200 million has been provided to the existing Institut Latihan Perindustrian (ILP) and Advanced Technology Training Centre (ADTEC) as well as for the construction of a new ILP in Marang, Terengganu and an ADTEC in Taiping, Perak.
  • A total RM360 million has been set aside for Institut Kemahiran MARA (IKM) and Institut Kemahiran Tinggi MARA (IKTM), Kolej Pelajaran MARA (KPM) and Giat MARA projects. The monthly allowance for Giat MARA trainees would be increased from RM100 to RM200.
  • The government had also allocated RM70 million to train 5,600 nurses in training colleges under the Health Ministry with 2,000 in recognised private training colleges.
  • To support the development of regional health tourism in the Northern Corridor Economic Region (NCER), the government would provide a launching grant of RM30 million towards the establishment of an industry-based-not-for-profit training centre.
  • The Construction Industry Development Board (CIDB) has been directed to provide at least 100,000 industrial training opportunities in technical fields such as welding, management and safety.


  • The Education Ministry had been allocated RM31 billion for the benefit of 5.8 million students.
  • To meet the need for new schools and replace dilapidated schools, 110 primary and 181 secondary schools would be built. In addition, to ensure that existing schools were well maintained, an allocation of RM615 million has been provided.
  • To improve the quality of learning at institutions of higher learning, an allocation of RM14.1 billion would be provided to the Ministry of Higher Education.

Source: Bernama

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