KUALA LUMPUR – The tabling of Budget 2024 by Prime Minister Datuk Seri Anwar Ibrahim yesterday received widespread praise for its comprehensive coverage of various sectors.
For 2024, the federal government’s total expenditure has been revised upwards to RM397.1 billion, equivalent to 21.5% of the gross domestic product (GDP), up from the budget allocation of RM386.1 billion or 20.4% of GDP.
Out of this allocation, RM303.8 billion, accounting for 77.1%, is directed towards operating expenditure, while the remaining RM90 billion is earmarked for development expenditure. These figures were disclosed in the 2024 Fiscal Outlook and Federal Government Revenue Estimates report released yesterday.
In light of these figures, let’s delve into the key beneficiaries and those who face cutbacks under Budget 2024.
Winners:
1. Employees’ Provident Fund (EPF) and Social Security Organisation (Socso) contributors
Contributors stand to gain as the government intends to enhance various social security programs to ensure adequate protection for targeted communities.
The government will now cover 90% of the Self-Employed Social Security Scheme Act with an allocation of RM100 million. Moreover, they have increased the matching contribution limit for the EPF i-Saraan program to RM500 per year, capped at RM5,000 in a lifetime.
Similarly, the matching contribution limit for i-Suri has risen to RM300 annually and RM3,000 in a lifetime. The Housewives’ Social Security Scheme has been allocated RM50 million, benefiting over 400,000 housewives registered under e-Kasih. The government will also raise the monthly salary ceiling for Socso contributors from RM5,000 to RM6,000.
2. The Health Ministry
The Health Ministry received a significant boost with an allocation of RM41.2 billion, marking an increase from RM36.3 billion in the previous year. This increase is the highest among all ministries.
The allocation includes RM100 million for the Madani Medical Scheme, which will be extended nationwide and is expected to benefit 700,000 citizens.
3. Students
The Education Ministry secured the highest allocation in Budget 2024, with RM58.7 billion, while the Higher Education Ministry received RM16.3 billion.
A portion of these funds will be utilised for the maintenance and enhancement of educational institutions’ infrastructure.
To promote accessible education, registration fees for public universities will be capped at RM1,500 starting in January next year. Existing students facing financial constraints can still register for courses each semester, with fee payments deferred.
4. Civil servants
The government is enhancing the ex-gratia work disaster scheme and raising the salary ceiling limit from RM4,000 to RM6,000, aligning it with Socso’s scheme for the private sector.
While awaiting the completion of the Public Service Remuneration System study, the government will provide interim payments of RM2,000 to all civil servants in Grade 56 and below, as well as contractual appointments.
Key public sector positions will receive RM1,000 in incentives. Additionally, a total of RM2.4 billion has been allocated for the construction, maintenance, and upgrading of quarters, including those for civil servants.
5. Islamic Development Department (Jakim)
The Muslim federal agency receives an allocation of RM150 million for the maintenance and enhancement of its infrastructure, including Islamic institutions such as tahfiz schools, religious schools, and registered pondok schools.
The halal certification processing period has been shortened from 51 to 30 days to expedite the halal certification process, with the Halal Development Corporation and Jakim leading efforts to streamline certification processing, particularly for halal product exporters.
Losers:
1. Smokers
The government imposes excise duties on chewing tobacco products at a rate of 5% and RM27 per kg, aiming to reduce public health risks.
Stringent measures for controlling smuggling activities for cigarettes meant for the domestic market have also been introduced.
2. The wealthy
Subsidies for the top 10% of electricity consumers will be reduced, as they benefited from half of the subsidies granted in the previous year. In contrast, the bottom half of users received only 10% of the subsidies.
To address this imbalance, a targeted subsidy approach has been initiated, retaining subsidies for 90% of electricity users. Subsidies for the T20 income bracket, particularly for electricity, may be phased out to prevent leakages.
New legislation will also introduce a high-value goods tax at a rate of 5% to 10% on items like jewellery and watches, based on their threshold value.
3. Those with a sweet tooth
In a measure to reduce public health risks, the government has increased the excise duty on sugary drinks, with the revenue being directed to dialysis centres and diabetes treatment.
Meanwhile, temporary price controls on chickens and eggs will be lifted as the supply has stabilised and market prices are below the controlled ceiling. The subsidy for chicken and eggs, introduced in February 2022 cost the government RM2.255 billion.
4. Diesel users
To address the suspected increase in diesel smuggling due to lower domestic prices, the government plans to rationalise diesel prices gradually. Despite a minimal increase in the number of diesel vehicles, sales of subsidised diesel have surged by almost 40% since 2019.
5. Car buyers
The sales and service tax has increased from 6% to 8%, impacting consumers in various sectors – particularly when purchasing expensive items such as vehicles.
Taxable services have also been expanded to include logistics, brokerage, underwriting, and karaoke services.
These winners and losers within Budget 2024 reflect the government’s efforts to balance various sectors and prioritise the well-being of its citizens. – October 14, 2023