Reducing the Cost of Doing Business

41. The nation’s competitiveness will be further enhanced through increasing the level of efficiency and productivity as well as lowering the costs of production. In this regard, domestic manufacturers need to adopt more efficient and technology-intensive production methods. To assist the private sector to reduce

the cost of doing business, I propose the following:

i. companies engaged in promoted manufacturing and service sectors be given import duty and sales tax

exemptions on spares and consumables until end-December 2003;

ii. hauliers be given import duty and sales tax exemptions on prime movers and trailers; 

iii. plantation companies be given import duty and sales tax exemptions on machinery and equipment;

iv. companies engaged in the provision of services to conserve energy be given income tax exemptions as

well as import duty and sales tax exemptions on related v. capital expenses incurred on purchase of machinery and equipment used by companies to conserve energy be given Accelerated Capital Allowance. Such machinery and equipment would also be eligible for import duty and sales tax exemptions;

vi. qualifying expenses for capital allowance on new vehicles be increased from 50 thousand ringgit to 100

thousand ringgit provided that the on-the-road price does not exceed 150 thousand ringgit;

vii. expenses incurred in obtaining halal and quality certifications and accreditations be given single

deduction in the computation of income tax;

viii. expenses incurred on the design of packaging of products for exports be given a double deduction in the computation of income tax;

ix. the highest ad-valorem stamp duty rate on documents relating to the transfer of property be reduced to three per cent; and

x. specific stamp duty rates on various documents to be standardised at 10 ringgit.

Eliminating Bureaucratic Delays

42. To ensure success in the implementation of the Strategic Vision, the Government will step up its efforts towards eliminating bureaucratic delays. A special task force will be established to monitor the implementation of every initiative that I have announced in this Budget. This is to ensure that all strategic

initiatives are implemented expeditiously to generate the intended benefits. We cannot be complacent. Every agency must enhance their state of preparedness and determination to stimulate economic

activities. The Government will replace or amend archaic regulations if they hinder development. To ensure that development projects are implemented as scheduled, all implementing agencies

must submit progress reports periodically to the highest authority. Furthermore, all members of the administration are required to closely monitor the implementation of projects so that rakyat, particularly those in the rural areas, will benefit from the nation’s development apart from accelerating economic activities. For Ministries that do not fully utilise their allocations, such allocations will be withdrawn and reallocated to Ministries that are quick to implement their projects.

THIRD : CONTINUING THE AGENDA OF A CARING SOCIETY

43. The Government is aware that in a rapidly expanding economy there would be those who have not fully enjoyed the benefits of development. As such, the Government will continue to ensure that the benefits are shared by all segments of society. It is important to inculcate community values of sharing and caring in all aspects of life. The Government therefore, is resolved in making caring society as a national agenda.

Continuing the Social Agenda

44. In our pursuit of development and prosperity, the quality of life of rakyat will also be enhanced in line with the mainstream of national development. The Government will also ensure sufficient provision of social infrastructure and the upgrading of services for the lower income groups, particularly Orang Asli, elderly and the disabled. As such, more effective programmes, including the provision of micro-credit and support services for these groups will be further intensified. In addition, measures will continue to be

undertaken to ensure the conservation of the environment.

Increasing Incomes of the Poor

45. The Government will continue to give emphasis to programmes aimed at increasing the incomes of the poor. A sum of 182 million ringgit is allocated for year 2001 under the Development of the Hard-Core Poor Programme (PPRT) to implement projects relating to rehabilitation of homes, health improvement, provision of micro-credit, development of village economy and agricultural assistance. With these programmes, the poverty level is expected to decline further to 5.4 per cent. The Government is confident that the hard-core poor can improve their economic status and well being if they are prepared to work harder in seizing the opportunities made available by an expanding economy.

46. Since 1996, the Government has allocated a sum of 300 million ringgit under the Amanah Ikhtiar Malaysia (AIM) programme as a revolving fund to improve incomes of the hard-core poor through the implementation of viable projects. To date, loans totalling 240 million ringgit have been extended to 62,243

borrowers. In 1998, funds totalling 150 million ringgit were also channelled to Yayasan Tekun Nasional to provide loans to hawkers. To date, loans totalling 46.5 million ringgit have been disbursed to

16,215 hawkers. It is hoped that organisations entrusted with the implementation of these programmes undertake their responsibilities to ensure that these funds benefit the targetted groups and contribute to Government’s objective of poverty eradication.

47. The Barisan Nasional Government will continue to take care of the welfare of rakyat in Terengganu even though it no longer heads the State Government. To ensure that rakyat in Terengganu continue to enjoy progress and remain in the mainstream of development, the Federal Government has agreed to

continue to provide Wang Ehsan to the Terengganu State Government through the Wang Ehsan Financing Programme. The Committee at the Federal level responsible for this programme has identified seven categories of programmes for implementation that will provide direct benefits, particularly to the poor in Terengganu. These include the provision of water and electricity, village roads, education, infrastructure, housing as well as resettlement programmes. For the agriculture sector, various special

programmes will be provided, such as the cultivation of cash crops as well as assistance to coastal and deep-sea fishermen. In addition, Wang Ehsan will be allocated for the development of entrepreneurs through programmes like TEKUN-Terengganu, PROSPER-Terengganu and the Special Fund for the development of vendors, franchise and the like. Wang Ehsan will also be used to assist the elderly, single mothers, disabled and orphans. As floods often affect Terengganu, especially during the monsoon season, a Natural Disaster Fund will be established. Some of these programmes have already been implemented. 

48. The Government is also concerned about the payment of salaries to officers and staff. In this regard, the provision of Wang Ehsan will take into account the deficit in the State Government’s budget, subject to verification by the National Audit Department. As such, the officers and staff of the Terengganu State Government should not be apprehensive as payment of their salaries is assured.

49. There has been opposition over the Government’s decision to disburse Wang Ehsan to Terengganu. In fact, Petronas signed similar agreements with all states except that the agreements with Sabah and Sarawak differed slightly. It is, therefore, clear that all states in the Peninsular, including Terengganu, are not entitled for oil royalties. Payments made by Petronas was in the form of Wang Ehsan as decided by the late Tun Abdul Razak. To those who oppose this programme, which is aimed at protecting the poor, elderly, single parents and orphans, I propose that they bring this matter to the Courts. Do not question

the sincerity of the Government with slogans or emotional outbursts.Let the Courts decide.

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