2013 BUDGET SPEECH : FOURTH FOCUS

FOURTH FOCUS: FISCAL CONSOLIDATION AND ENHANCING THE PUBLIC SERVICE DELIVERY

78. The Government is committed to ensuring the fiscal deficit continues to decline and achieve a balanced budget. 

In this respect, all ministries and agencies will ensure that development and operating allocations are spent on priority and important items to support the implementation of the national policies and programmes. 

79. The Government will also ensure that the Federal Government debt will not exceed 55% of the GDP and fiscal deficit continues to decline to 3% by 2015. 

Among the measures taken to ensure sound public finance are enhancing revenue collection by strengthening the tax system, and ensuring all procurement and purchases by the Government are based on the value-for-money principle.

80. Apart from the transition from bulk subsidies to targeted subsidies, a review of Malaysia’s taxation system will be continued to ensure the taxation system better reflects the household’s financial position. 

The transition from income based taxation system to a more comprehensive and fair taxation system will eventually benefit the rakyat.

81. The measure will not be implemented hastily but through a thorough study and in an orderly manner. 

It will not affect the rakyat, particularly the medium and low-income groups as all the basic needs such as food, housing or public transport will always to be protected.

82. Implementation of the new tax structure is a national imperative to ensure the Government’s finances remain strong for future generation. 

The Government will not shirk from taking the right action although it is challenging. 

83. However, the Government will give the sufficient time to all parties to make the necessary adjustment. 

Public acceptance of this new initiative will be solicited through information programmes, education and extensive consultations.

84. In providing excellent services, civil servants must adopt a culture of productivity, creativity and innovation. 

The working culture must be swift, accurate and with integrity. 

The move will trigger a new paradigm and improve the rakyat’s confidence in a more effective, efficient and responsive public service. 

85. The Government has not forgotten the contribution of pensioners in providing excellent services for the country. 

In this regard, the Government will increase the minimum pension from RM720 to RM820 for pensioners who have served for at least 25 years. 

The adjustment will be effective from 1 January 2012. 

This measure will involve an additional allocation of RM60 million a year benefiting 50,371 pensioners including derivative pension recipients. 

86. In appreciation of senior citizens, the Government proposes to reduce the processing fee of a 5-year passport by 50%, from RM300 to RM150. 

Meanwhile, processing fee for the 2-year passport will be reduced from RM100 to RM80. 

These reductions will also be extended to children aged 12 and below. 

The new rates will be effective from January 2013. 

Improving the Malaysian Armed Forces Scheme of Service

87. To ensure that the Malaysian Armed Forces (ATM) has knowledgeable and highly skilled human capital, as well as to realise the vision and strategic direction of ATM in line with the current demand, the Government will improve the ATM service scheme. 

In this regard, recruitment to the armed forces has been improved, where the entry requirement for officers has been raised to Bachelor’s Degree with Honours. 

For servicemen, minimum entry is raised to Sijil Pelajaran Malaysia and Diploma, based on the scope of tasks. 

88. Taking into account the uniqueness of the armed forces, the Government will improve career advancement opportunities through time-based promotion for Privates to Lance Corporals, and for Lance Corporals to Corporals within a period of eight years for those who fulfil the necessary requirements and based on their performance. 

This will increase opportunities for career advancement as well as motivate the members of the armed forces. 

The improvement in scheme of service and career advancement in the armed forces involves an allocation of RM107 million benefiting 78,123 members. 

89. In addition, the Government will provide a special incentive of RM200 per month to all military personnel totalling 125,708, effective from 1 January 2013. 

The measure will involve an allocation of RM301 million. 

90. The Government appreciates the role of the military reserve force to complement and support ATM personnel. 

In appreciation of their contribution, the Government will revise the services allowance from RM4.00 per hour to RM6.00 for ordinary members, and from RM5.80 to RM7.80 for officers. 

This will involve 65,000 members of the military reserve force comprising Territorial Army Regiment (WATANIAH) as well as reserves in the navy and air force. 

This rate has already been in effect for RELA, JPAM and PVR.

91. The Government has not forgotten the commitment and dedication of our national heroes. 

The Government will provide a one-off RM1,000 to assist former members of the armed forces who have opted for early retirement; served less than 21 years; and did not receive any pension. 

The allocation of RM224 million will be equally shared by the Government and Armed Forces Fund Board which involves 224,000 former members of the armed forces. 

92. The Government will introduce a Group Insurance Coverage Scheme to serving armed forces and police personnel involving an allocation of RM12 million. 

The scheme will provide a maximum insurance coverage up to RM15,000 to almost 242,000 armed forces and police personnel. 

93. To date, the Government has borrowed RM6 billion to finance housing loans for civil servants which is managed by the Housing Loan Division (BPP), Ministry of Finance. 

As part of efforts to consolidate the fiscal deficit and to ease the Government’s financial burden, BPP will be restructured. 

The Government will appoint panels from commercial banks to manage new housing loans, effective from January 2013. 

Civil servants will continue to enjoy the existing benefits and assistance, which will be further enhanced. 

Civil servants will still pay the 4% interest rate on housing loan repayment. 

94. Currently, the processing fee for each housing loan application by civil servants is RM1 for every RM1,000 for first submission and RM2 for second submission. 

To ease the financial burden and facilitate loan approvals, the Government agrees to fix the processing fee at RM100 for each application regardless of the loan amount.

95. The Government will reduce the cost of living of trainees undergoing the pre-service courses at the first degree, diploma and certificate level. 

In this regard, the Government will increase the pre-service allowance for 31,135 trainees. 

The schemes of service involved are Education Services Officer, Environmental Health Assistant Officer, Medical Assistant Officer, Assistant Pharmacist, Radiographer, Nurse, Dental Nurse, Physiologist, Medical Laboratory Technologist, Dental Technologist, Community Nurse, General Medical Assistant and Dental Surgery Assistant. 

For this RM84.2 million is allocated.