‘Budget 2015 is moderately expansionary’

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KUALA LUMPUR: CIMB Group Holdings Bhd’s acting group chief executive officer Tengku Datuk Zafrul Tengku Abdul Aziz said the budget’s multi-pronged approach practises fiscal discipline to strengthen the country’s public finances. Yet it is able to implement policies that promote more equitable and inclusive growth.

He said the budget aims to manage competing priorities as the government carefully steers the economy to meet the challenges of implementing critical fiscal reforms next year.

“The treasury’s gross domestic product (GDP) growth projection of 5% to 6% for 2015 is pragmatic in view of the implementation of the goods and services tax (GST) and subsidy rationalisation measures,” he said in a statement last Friday.

Zafrul described Budget 2015 as “moderately expansionary” to include measures to strengthen the social safety net and ease concerns about the higher cost of living, accelerate development expenditure and spur higher-yielding and productivity-enhancing investments.

His views were echoed by Khazanah Nasional Bhd managing director Tan Sri Azman Mokhtar, who said Budget 2015 had asked the most important economic question of our time — how to balance both the “Capital Economy” and the “People Economy” in a progressive, equitable and sustained manner?

“For a while now, progress on the macroeconomic level has been little felt at the microeconomic firm, let alone at the average household and individual levels. In that regard, Budget 2015 marks a watershed in trying to address the challenge of balancing the two more precisely and sensitively, and, in emphasising EKR (Ekonomi Keperluan Rakyat) first, making a correct humanistic policy choice,” he said.

Meanwhile, Mah Sing Group Bhd group managing director Tan Sri Leong Hoy Kum lauded the various initiatives in Budget 2015, which he said would continue to be pro-rakyat and focus on creating more affordable housing, easing concerns about the cost of living and enhancing job opportunities.

According to Leong, the government is taking action to increase home ownership with the Youth Housing Scheme, which is a smart partnership among the government, Bank Simpanan Rakyat, the Employees Provident Fund (EPF) and Cagamas.

“Overall, we are heartened to see the focus on helping first-time home buyers,” he said in a separate statement.

Under Budget 2015, first-time home owners aged between 25 and 40, married, and with household incomes of less than RM10,000, are eligible for a number of goodies in purchasing a property. These include RM200 monthly financial assistance for the first two years to help in monthly instalments, 50% stamp duty exemption on transfer documents and loan agreements, as well as a 10% loan guarantee so that they can obtain 100% financing.

“They can even withdraw from their EPF Account 2 to top up their monthly instalments,” he said.

Leong also said the reduction of income tax rates by one to three percentage points for the year of assessment 2015 brings the country closer to regional practices.

“Not only would taxpayers have more disposable income, this will make Malaysia a more attractive employment destination,” he concluded.

Supermax Corp Bhd group managing director Datuk Seri Stanley Thai said the Budget 2015 announcement of the following incentive programmes will accelerate growth and enhance global competitiveness of gloves and other rubber products made in Malaysia.

In a statement, he said the RM300 million allocation for promotion of new markets will help the glove industry to enter those markets. “We do hope that there is an effective implementation and disbursement of funds for the promotion of new markets to those genuine exporters.”

However, Thai said the automation capital allowance of 200% for the first RM4 million is “far too low and inadequate” for rubber products, in particular for the glove industry.

“We urge the government to implement automation capital allowances of 200% on the [whole] amount spent on automation manufacturing and not put a ceiling on automation capital allowance,” he said.

 

This article first appeared in The Edge Financial Daily, on October 13, 2014.