Recently, I received a suggestion from a reader to write on the recent Malaysia’s Government Budget for the 2019 fiscal year. I see this post as a nice break from the usual posts of explaining technology topics. After all, the Government Budget for 2019 is indeed a topic relevant to the future – so why not have a quick glance at it?
And as the title suggests, it should be quick – like 2, 3 minutes quick.
Before I go into some of the specifics, it is imperative to note that this is the first Government Budget tabled since the Pakatan Harapan government was installed in May 2018. The overarching theme in the budget is fiscal consolidation after the mismanagement of public funds by the previous government according to Finance Minister Lim Guan Eng. Notwithstanding the trade war between the US and China looming over the global economic landscape, it is certainly a challenging government budget to accommodate the multiple considerations, and subsequently to commit.
Here are the few points I have gathered:
1. A “yay” for the businesses
Now, the proposed measures would not be as fancy as the “Malaysian Vision Valley” of that sort, but companies in the tech industry has commended on the constructive measures that aimed at helping businesses, which includes a series of initiatives under the National Policy on Industry 4.0 or known as Industry4WRD (nope, that is not a spelling error – it is supposed to be pronounced as “industry forward”).
The proposed measures include:
- RM210 million to support businesses in transitioning to Industry 4.0, where the Malaysian Productivity Corporation will help the first 500 SMEs to undergo readiness assessment for this migration;
- RM2 billion under the Business Loan Guarantee Scheme (SJPP) to support SMEs in investing into automation with guarantees up to 70%;
- RM3 billion for the Industry Digitalisation Transformation Fund at subsidised 2% interest rate to support adoption of smart technology among businesses;
- RM2 billion to be set aside by government-linked investment funds to co-invest on a matching basis with private equity and venture capital funds in strategic sectors and new growth areas;
- RM2 billion Green Technology Financing Scheme with a 2% subsidised interest rate for the first 5 years.
Of course the full list is longer, but you get the gist of it.
2. A “yay” for infrastructure
Prior to the budget announcement, the government has already facilitated a round of price reduction for fibre internet services. However, this has drawn some flak from people living in areas without access to such services. Possibly as a response to that, the government announced allocation of RM1 billion for the National Fibre Connectivity Plan, which aimed to provide rural and remote areas internet speed of 30Mbps within five years.
3. A “huh” for the ordinary folks
Now, the “huh” word is an ambiguous expression, which probably is fitting to describe the takeaways from the Budget for the layman on the street.
On one hand, the government has announced a RM10 million allocation to Malaysia Digital Economy Corporation (MDEC) towards the development of eSports in the country. This seems like a boost to the e-gaming community and industry where this measure is perceived as a step in giving due recognition to an area that is, frankly, still riddled with stigma from certain sections of the society.
On the other, the government has announced plans to impose tax on imported online services beginning January 2020 – and yes, this includes Netflix, Spotify and Steam as shown on the Budget presentation screen. The specifics on how the tax will be imposed has yet to be announced, so some clarity in this space is required.
To add on, there is no announcement on personal tax relief for purchase of devices – presumably this may be absent from the list of tax benefits for the 2019 Tax Year.
And then there is the peer-to-peer property crowdfunding platform announced for first-time aspiring owners. There has been quite an amount of buzz surrounding the idea of crowdfunding one’s way to owning a house, with some netizens claiming it as nothing more than a glorified version of a Rent-To-Own scheme, while others describing the measure as a prelude to a subprime mortgage crisis. Now, I would not be able to comment given my employment with one of the stakeholders involved in this platform, but if anything, there should be clarity to the ordinary people on the street on the details of this initiative.
So that’s about it – a brief look on what the Malaysian 2019 Government Budget bode for Digital Malaysia.
Full Budget Speech: https://www.thestar.com.my/news/nation/2018/11/02/here-is-the-full-speech-by-finance-minister-lim-guan-eng-during-the-tabling-of-budget-2019/
Compilation of views from the tech space by Digital News Asia:
A netizen’s comment on property crowdfunding platform initiative: https://klse.i3investor.com/blogs/purelysharing/180971.jsp
Image by Andre Gunaway of Tech in Asia: https://www.techinasia.com