This article first appeared in The Edge Malaysia Weekly on October 30, 2017 - November 5, 2017

Tan Sri Teh Hong Piow

Founder and chairman, Public Bank Bhd

We applaud the wholesome approach in crafting Budget 2018. The budget touches all aspects of society and the rakyat from all walks of life. It provides wide-ranging and inclusive measures to promote economic expansion and the well-being of the rakyat, particularly the medium and lower-income group. This sets the direction for the nation to embark on the journey towards National Transformation 2050 (TN50). The budget also addresses the needs of the rakyat amid the rising cost of living.

We view positively the government’s firm and continuous commitment in strengthening its fiscal position, and Budget 2018 affirms this ongoing fiscal effort. The budget deficit is projected to reduce further to 2.8% of GDP in 2018, supported by expectations of higher government revenue and prudent fiscal spending.

The implementation of new and ongoing infrastructure projects will continue to stimulate investments, which in turn generate capacity expansion in high growth sectors. Domestic investment will complement private consumption activities, contributing to a broad-based economic growth.

Tan Sri Azman Hashim

Chairman, AmBank Group

Chairman, Malaysian Investment Banking Association

We wish to extend our appreciation to the government for its comprehensive budget that shows commitment in ensuring the economy continues to expand at a healthy pace and at the same time to reduce the fiscal deficit since 2009, while maintaining the federal government debt-to-GDP below the self-imposed limit of 55%.

The budget is seen to have expressed the sound economic and financial management of the country and at the same time cares for the interests of the rakyat, as reflected by the targeted incentives and measures, and creation of more high-impact programmes.

To further strengthen the contribution of the capital market, several measures were introduced in the budget — the exemption of stamp duty will promote a more active trading for exchange-traded funds and structured warrants; the income tax exemption of management fees will incentivise the creation of a wider range of socially responsible investment financial products to be offered to the market; and the introduction of an Alternative Trading System is expected to allow trading of securities to be time-efficient.

Tan Sri Lodin Wok Kamaruddin

CEO, Lembaga Tabung Angkatan Tentera

This year’s budget certainly reflects the government’s commitment to strengthen our nation’s growth prospects and create a more holistic economy for the benefit of all Malaysians.

LTAT is particularly pleased with the initiatives to curtail the impact of the rising cost of living and the government’s efforts for the Malaysian Armed Forces.

The multiple initiatives put in place for the Malaysian Armed Forces are indeed laudable, particularly the establishment of a housing blueprint to build over 40,000 affordable units by 2030 for members of the armed forces, with the first 6,000 units to be built in 2018. The sum of RM40 million allocated to upgrade five hospitals and build four polyclinics and a hospital for armed forces veterans is also a welcome development.

Tan Sri Azman Mokhtar

Managing director, Khazanah Nasional Bhd

The first budget after the 60th year of Merdeka, Budget 2018 was comprehensive, balanced and fiscally responsible, with the deficit narrowing further to a forecast 2.8% of GDP, from 6.7% in 2009. While emphasising inclusive growth through many measures to alleviate pain points for the rakyat in the short run, Budget 2018 was also able to focus on long-run competitiveness to future-proof the economy and society at large.

Khazanah Nasional Bhd and our investee companies look forward to continuing to play our part in delivering the economic and social development measures in Budget 2018, in particular in delivering productivity-based employee benefits, empowerment of women, retraining of unemployed graduates under Skim Latihan 1Malaysia (SL1M) and specific measures for the promotion of medical tourism, removal of tolls at specific highways, investing in venture capital, and provision of airport and aviation services, among others.

Tan Sri Abdul Wahid Omar

Chairman, Permodalan Nasional Bhd

Permodalan Nasional Bhd (PNB) welcomes the Budget 2018 announced by the Prime Minister, Datuk Seri Najib Razak. It is indeed a comprehensive and forward-looking budget that addresses various aspects of the economy, the capital market, entrepreneurship, education, inclusive development and the rakyat’s well-being.

At the same time, it reaffirms the government’s commitment to sustainable financial management. As announced by the PM during the budget presentation, PNB is pleased to confirm that the Amanah Dana Anak Malaysia (ADAM50) will be implemented beginning Jan 1, 2018.

With ADAM50, all Malaysian babies born in 2018 to 2022 will have an account with the government, and PNB providing the initial incentive units. The 200 incentive units and all dividends received on this initial amount can only be redeemed when the child reaches 18 years of age.

Datuk Abdul Farid Alias

Group President and CEO, Malayan Banking Bhd

Chairman of the Association of Banks in Malaysia

This budget continues to address the government’s present objective of boosting disposable incomes for the B40 to ease cost of living pressures and support consumer spending.

At the same time, we are pleased to see plenty of measures to help Malaysia and Malaysians prepare themselves for the demands of the future. These include developing more infrastructure in logistics, preparing for and promoting the “digital economy”, boosting productivity and automation, as well as focusing on human capital development and investment by further enhancing science, technology, engineering and maths (STEM) and coding in the education system, and Technical and Vocational Education Training (TVET).

We are also encouraged by the government’s continuing support for SMEs through funding and credit provisions, and also providing tax exemptions for capital markets covering a broad range of activities, products and investors.

Finally, we are happy to see the government continuing with its prudent approach in fiscal management, as can be seen by the gradual improvement in our fiscal deficit.

Tengku Datuk Seri Zafrul Aziz

Group CEO, CIMB Group

Budget 2018 reflects the government’s sensitivity to the rakyat, through caring but practical policies, particularly for the B40 and M40. The focus on bread-and-butter issues, like reducing income tax for the lower-income group, increasing assistance for basic food and transport items and providing more allocation for affordable homes will go a long way towards ensuring the rakyat’s short and long-term interests.

The focus on building more than 385,000 affordable homes shows that the government is taking firm steps to address head-on the challenge of homeownership for the lower-income group. Extending the step-up financing scheme for 1Malaysia People’s Housing (PR1MA) to private housing developers is also a laudable move towards facilitating home ownership.

On enabling further a digital economy, the Digital Free Trade Zone that is already taking shape will make Malaysia a major fulfilment gateway and commercial hub for Asean, providing opportunities to the nation’s economic backbone, the small and medium-sized enterprises (SMEs), and more jobs. Related to this, CIMB Group, as a leading universal bank with a strong footprint in Asean, is ever ready to facilitate SMEs’ cross-border trade and business expansion regionally.

Datuk Khairussaleh Ramli

Group managing director, RHB Banking Group

Budget 2018 is largely built on addressing the rising cost of living while maintaining a commitment to fiscal discipline. It has taken measures to address the Bottom 40% (B40) income group, Middle 40% (M40) income group and the rural population. One clear focus of this budget is to “shape the future” for all Malaysians, with emphasis on investments in infrastructure, education, and skills and talent development — measures that will boost growth and make the economy more inclusive. We consider it a well-rounded and disciplined budget that should lead to revenue generation and reduction of the fiscal deficit to 2.8% of GDP, hence boosting consumer and investor sentiment.

Yee Wing Peng

Deloitte Malaysia country tax leader

Budget 2018 continues to focus on the needs of the rakyat with measures to enhance the accessibility of education, homeownership and raise the disposable income of the low and middle-income groups to increase their purchasing power. From the corporate tax perspective, there are tax incentives offered for the tourism, healthcare and principal hub services, which include raising tax exemption on increased export revenue and extending the investment tax allowance (ITA) on capital expenditure. The government’s focus on these strategic sectors is laudable as the current strength of the ringgit and the relatively low cost of business in Malaysia have made these sectors more competitive. Perhaps some incentives should have been granted to the education sector as well, which has the potential to export more of its services.

The much-anticipated digital tax and incentive regime to enhance Malaysia’s digital economy through attracting established foreign players were not visibly dealt with in the budget announcement. I look forward to further updates in the near future.

Amarjeet Singh

Partner and tax leader, EY Malaysia

Budget 2018 promises a positive outlook and inspires investor confidence in the nation. It is an inclusive budget, with measures laying the foundation for long-term and sustainable growth. There is a strong focus on the private sector, and recognition of the role of SMEs in driving growth. The measures promote a conducive ecosystem for the private sector and SMEs through easier access to funding, support for talent development, creation of regulatory sandboxes for innovation and reach to global markets such as the Digital Free Trade Zone. The fact that these measures extend even to micro entrepreneurs demonstrates the depth of the initiatives in place.

The government continues to encourage evolution in the manufacturing sector with specific measures such as an enhanced capital allowance on automation equipment and an extension of the Domestic Investment Strategic Fund to cover smart manufacturing facilities. It is hoped that this, together with the increase in minimum wage last year, will reduce the country’s reliance on foreign labour.

Jagdev Singh

Tax leader, PwC Malaysia

Budget 2018 focuses on the nuts and bolts of addressing the increase in cost of living as well as progressing towards a high-income economy. Many of the measures announced are focused on the person on the street — addressing issues of the B40 and M40 groups, civil servants and women in the workforce.

I expected a reduction in personal tax rates after the implementation of the Goods and Services Tax (GST) in 2015, and Budget 2018 certainly delivered on that. The tax benefit of up to RM1,000 will benefit a large number of taxpayers. However, there were no changes to existing reliefs.

A reduction in corporate taxes was not expected, given the focus on reducing the budget deficit. However, I had hoped that targeted measures based on productivity increases and investment in R&D would be introduced, but this was visibly missing in Budget 2018.

While Budget 2018 provides a framework for shaping the workforce of the future, I hope that in the long run measures will focus on increasing our competitiveness in the new economy.

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