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Third
Strategy: Ensuring the Equitable Distribution of Income between
Urban and Rural Areas, between High and Low Income Earners as well
as between the More Developed and Less Developed States
Currently, there exists a wide income gap between the very rich
and the very poor. We do not deny the contribution of the rich towards
national development through their expenditure and investment. They
create job opportunities and their consumption generates commercial
activities, thereby providing income to workers and profits to businesses.
For the lower income group, if their purchasing power is increased,
they too can equally contribute to growth. While their income is
low, their consumption is big, given the significant number of those
in the low income group. As such, if their income is increased,
their higher consumption will contribute to the nation's GDP. Thus,
efforts must be taken to increase their income.
Towards this end, the Government will provide funds for training
workers in modern agricultural skills. With higher competence, they
can command higher wages. The Government will provide an amount
of 10 million ringgit for such training programmes in relevant training
centres.
The income of class F contractors will be increased through the
implementation of more small projects in rural areas. Project management
training will be provided for those who need training, to increase
their efficiency and enable them to be upgraded to higher class
contractors. Payment system and loan facilities for those with good
track record will be established.
Retail business opportunities will be identified in villages and
newly developed townships. Training and viable franchise businesses
will be provided for those interested and who have some capital,
such as from their retirement benefits or EPF. For those who are
already in business, assistance will be provided to further expand
their businesses. However, it must be emphasised that commitment
and diligence are important values. Those who only want to get rich
quickly must not exploit these opportunities to satisfy their greed.
Mixed farming estates will be promoted. These estates must be managed
by professionals in the appropriate fields. Trained estate workers
will be employed and paid wages commensurate with their productivity
and their efficiency in the use of sophisticated agricultural technology.
Modern agricultural development will be encouraged in states with
abundant land and with per capita income lower than the national
average.
Rural Development
The 2002 Budget provides the biggest ever allocation of 5.34 billion
ringgit to further increase the facilities and amenities in the
rural areas. Among others, this includes 1.58 billion ringgit for
agriculture, 378 million ringgit for land and regional development
as well as 392 million ringgit for village and community development.
The allocation also includes the implementation of rural and village
road projects as well as the provision of water and electricity
supply.
By the end of the Eighth Malaysia Plan, the Government will increase
the coverage of potable water supply to 99 per cent in Peninsular,
75 per cent in Sabah and Sarawak while achieving full coverage for
electricity supply. For this purpose, a total of 185 million ringgit
is allocated for rural water supply, particularly for interior areas
in Sabah and Sarawak. A sum of 211 million ringgit will be provided
for rural electricity, including installation of street lights along
village roads in 16,207 villages.
Family health programmes in rural areas will continue to be provided
through the mid-wife, village and health clinics. The services provided,
such as the teleprimary care programme, will encourage the development
of healthy families, including women in the reproductive age group,
child development as well as health programmes for youths, the elderly
and the disadvantaged. In addition, an allocation of 202 million
ringgit will be provided for a total of 383 health clinics while
8 million ringgit will be provided for 13 Water Supply and EnvironmentalSanitation
Programme (BAKAS). BAKAS will include the construction of a water
supply and sanitation system as well as waste and sewerage management.
Rural education is also given emphasis. An allocation totalling
900 million ringgit is provided for primary and secondary schools
while 100 million ringgit is allocated for 6 new matriculation colleges.
A sum of 205.5 million ringgit is allocated for the construction
of computer laboratories and facilities in rural schools. In addition,
a total of 7,800 houses will be built with an allocation of 215
million ringgit to ensure comfortable living conditions for teachers
in rural areas, which is part of the targetted 40,000 houses for
teachers.
Education facilities in the rural areas of Sabah and Sarawak will
continue to be improved. For this purpose, a sum of 180 million
ringgit is allocated for the construction and upgrading of teachers'
houses as well as the provision of potable water and electricity
supply in schools.
Efforts will be focussed on reducing the poverty level of Orang
As/i. This includes efforts to reduce school dropouts through the
Mind Development Programme and strengthening the Pre-School Education
Programme through TASKA and TADIKA. Towards this end, a sum of 114.1
million ringgit is allocated for the development of Orang As!;,
involving 412 villages.
Caring Society
A sum of 136.5 million ringgit under the Operating Expenditure and
57.3 million ringgit under the Development Expenditure is provided
for community welfare programmes to benefit 52 welfare institutions.
This includes renovation and upgrading works in order to improve
their living conditions.
The Government will continue to focus on the needs of the poor.
Program Kesejahteraan Rakyat that was formerly known as the Program
Pembangunan Rakyat Term;sk;n will give priority to states with the
highest number of poor, including Kelantan and Terengganu. For this
purpose, a sum of 204.5 million ringgit is allocated under the Ministry
of Rural Development. These include programmes to motivate poor
families, augment their income, provide supplementary food for the
hard-core poor, eradicate urban poverty, improve agriculture and
economic activities as well as for renovation of houses and community
development.
FELDA will also provide price support assistance for palm oil and
rubber settlers faced with declining commodity prices. Palm oil
settlers will be given a sum of 12 ringgit per metric tonne if palm
oil prices are below 900 ringgit. Rubber settlers on the other hand,
will be given a sum of 15 sen per kilogramme if rubber prices are
below 2 ringgit and 50 sen.
RISDA has allocated a sum of 3 million ringgit annually to improve
the income levels of hard-core poor, provide better living conditions
as well as programmes aimed at improving their work attitude and
ethics to enable them to augment their income. In addition, a maximum
assistance of 250 ringgit a month has been provided for each family
based on the number of dependents. A total of 667 families has benefitted
from this assistance, amounting to 2.5 million ringgit for the period
July 1999 to December 2000.
The Government will provide assistance for students with hearing
disabilities in institutions of higher learning by providing free
education, food and lodging as well as a monthly allowance of 300
ringgit beginning 1 January 2002. For this purpose, a sum of 403,000
ringgit has been allocated for 112 students in 2002. This assistance
will reduce their financial burden as well as of their families.
The Government is aware of the impact of the reduction of interest
rates by banking and financial institutions on those who are dependent
on returns from savings, especially pensioners. To provide alternative
sources of income, Bank Negara Malaysia will issue the Third Series
of Bon Simpanan Malaysia, especially for citizens above 55 years
and welfare organisations registered with the Registrar of Societies.
An amount of 1 billion ringgit will be issued with a rate of return
of 5 per cent, of which half would be issued based on Islamic principles.
Shelter is a basic need. Therefore, efforts will continue to be
made to increase the number of houses, particularly low-cost housing.
A sum of 943 million ringgit has been allocated for several low-cost
housing projects, including 143 million ringgit loans to State Governments
to implement 124 Public Low-Cost Housing projects. An allocation
of 793 million ringgit is also provided for the implementation of
the Integrated Rakyat Housing Programme in Wilayah Persekutuan Kuala
Lumpur and in other urban areas. These houses will be rented out
to the lower income group. As a caring Government, we will ensure
that the construction of public low-cost houses will also provide
facilities, especially for the disabled.
The
Government is also concerned about the housing problems faced by
civil servants, particularly those in the Armed and Police Forces.
An allocation of 1 .08 billion ringgit is provided for the construction
of quarters, which includes 710 million ringgit for the Armed Forces,
197 million ringgit for the Police Force and the balance of 173
million ringgit for civil servants.
In line with the objective of a healthy society and a prosperous
nation, the Government will continue to improve health service facilities.
A sum of 6.3 billion ringgit is allocated to the Ministry of Health
to continue, among others, the implementation of hospitals as well
as health and rural clinic projects. Among the health and medical
facilities, focus will be given to improving women and children's
health, disease control, nutrition as well as providing modern equipment
and facilities.
Women
In recognition of women's role in economic development, the Government
has set up the Ministry of Women and Family Development. With the
establishment of the Ministry, issues and problems relating specifically
to women, including children and families will be given a more focussed
attention. In this regard, Article 8(2) of the Federal Constitution
has been amended to include the word 'gender' to ensure that laws
and policies do not discriminate against women. The Ministry has
also launched the Women Against Violence Campaign on 23 July 2001.
The Government is aware that the female labour force participation
rate at 44.5 per cent is lower than the 60 per cent level in developed
countries. Women in Malaysia are fortunate that the Government encourages
and provides equal opportunities in all fields of employment, unlike
in certain states, which do not encourage women to work. In fact,
Saidatina Khadijah, wife of the Prophet, was a prominent and wealthy
entrepreneur during her time. Another of His wife, Saidatina 'Aisyah
led troops in the Battle of Jamal. Many women provided medical services
to Muslim soldiers injured during the battle. We must remember that
Muslims make up only 60 percent of the population, of which half
is women. If women are not allowed to contribute to the development
of the Muslim community, the Muslim workforce will be reduced by
30 per cent. They are already weak and will become even weaker.
Greater focus will be given to specific programmes aimed at improving
the quality of women's lives, particularly in rural areas, developing
female entrepreneurs as well as eradicating the gender bias in all
respects. The implementation of these measures reflects the Government's
commitment in ensuring that equal opportunities are provided for
women. A sum of 59 million ringgit has been allocated to finance
programmes, specifically for women.
Currently, widows receiving their late husband's pensions will lose
the benefit if they re-marry. I propose that they continue to receive
the pension even if they re-marry. It is hoped that there will not
be many who will marry a second wife and leave their first wife
because of this provision.
Youth and Sports
Youths are the nation's greatest asset and have the potential to
contribute towards development. In this respect, the Rakan Muda
Programme will be continued with renewed features and form part
of the national agenda for the development of youths. A total of
3.5 million youths will participate in more than 35,250 activities
at the national, state and district levels under this programme.
Participation in the National Social Service Programme for youths
which aims to cultivate self-reliance and inculcate good values
will be extended to 20,000 youths. The programmes will be for students
awaiting their SPM examination results. The promotion and publicity
for the Rakan Muda Programme will be organised on an on-going basis
to attract youths to participate in activities that suit their interests.
A sum of 81.8 million ringgit has been allocated for these
programmes.
The Government wishes to congratulate and record its appreciation
to the national SEA Games contingent for their overwhelming success
in attaining the nation's best ever SEA Games performance, with
111 gold medals. Training efforts for our national athletes will
be intensified to enable them to excel in the Asian and Olympic
Games.
Sports and recreational activities will be enhanced. As sports is
for people of all ages, additional activities in the form of competitions
for ordinary people will be organised. In addition, new sports activities
such as extreme sports and motor sports will continue to be introduced
through competitions and demonstrations. In 2002, Malaysia will
host an extreme sports event at the Asian level. This new sport
is aimed at attracting the interests of youths as well as to spend
their time constructively and productively.
Combating Social Ills
We have witnessed the increase in social ills in our society. Recently,
the nation has been jolted by unprecedented acts of violence. The
Kampung Medan incident has marred the unity that we have so painstakingly
built up. Moral decadence among youths is a serious concern. The
number of drug addicts and HIV-AIDS patients has increased. Criminals
have become more violent.
The bitter experience of 1969 underscores the importance of fostering
and preserving national unity. Programmes to create community awareness
as well as build a sense of responsibility in addressing social
issues will continue to be implemented. In this regard, a sum of
6.8 million ringgit has been allocated under the Ministry of National
Unity and Community Development to carry out programmes under the
Social Action Masterplan (PINT AS). This Plan incorporates measures
to enhance cooperation and participation at all levels to ensure
that every member of society leads a healthy and good quality life,
free from social ills. An allocation of 7.7 million ringgit is provided
for the National Social Service Programme under the Ministry of
Youth and Sports to combat social ills among youths, particularly
secondary school leavers.
A sum of 312.4 million ringgit is allocated to eradicate drug and
crime-related problems. Of this, an amount of 140.4 million ringgit
is for crime prevention, mainly to combat drug smuggling and abuse,
besides improving treatment for drug addicts. An allocation of 282,500
ringgit is provided for voluntary organisations, such as PEMADAM
and PENGASIH. A sum of 172 million ringgit is provided to accelerate
crime investigation through the use of modern techniques, such as
DNA profiling to trace criminals.
To assist voluntary non-governmental organisations to step up activities
in AIDS prevention and drug abuse as well as the HOSPIS programme
for treating serious cancer patients, the Government will provide
a matching ringgit for ringgit grant for sums raised by these
organisations,
up to a maximum of 1 million ringgit. A special allocation will
be provided for drug addicts affected by HIV-AIDS.
Public awareness on the hazards of smoking is still low among the
rakyat. A matter of serious concern is the spread of smoking habit
among school children. Recognising this, I propose that import duty
on cigarettes be increased from 180 ringgit per kilogramme to 216
ringgit per kilogramme while excise duty be increased from 40 ringgit
per kilogramme to 48 ringgit per kilogram me. The Government is
aware that this measure may increase smuggling activities. In this
respect, a more aggressive and effective approach will be taken
to ensure that smuggling activities are curbed by increasing administrative
efficiency of the Customs Department and other enforcement authorities.
The Government acknowledges and appreciates the spirit of volunteerism
and commitment shown by various voluntary organisations. In this
regard, an allocation for an operating grant of 22.9 million ringgit
and a development grant of 6 million ringgit are provided to 375
voluntary welfare organisations. Among the new facilities, four
day-care centres for the elderly managed by NGOs are expected to
commence operation by 2002. A new institution, Kompleks Penyayang
BAKTI Sungai Buloh has been established to provide care and protection
for children, the elderly and single mothers. In addition, about
10 million ringgit is allocated for voluntary organisations to provide
haemodialysis services.
Public Service Sector
The Government appreciates the contribution of the civil service
in spearheading development efforts. The Government is also aware
that with the support and commitment of civil servants, policies
and programmes for the benefit of the rakyat have been implemented
effectively. I believe the excellence and professionalism of the
civil service will continue to be enhanced, particularly in the
light of greater difficulties in both the external and internal
environment. This should not dampen our spirit, instead it should
serve as a challenge for the civil service to strive harder towards
achieving excellence. The nation needs the dedication of all civil
servants. There is no need to resort to armed struggle. Our struggle
is more of attaining economic achievements and upholding the nation's
sovereignty. We should strengthen our resolve, redouble our efforts,
inculcate trust and sincerity as well as promote an excellent work
culture.
As a record of appreciation for the commitment and dedication of
the civil service, the Government will award a bonus of half month
salary or at least 1,000 ringgit for 2001. Half of the bonus will
be paid in October and the other, in November. I hope the bonus
will be able to meet expenses for the coming festivals as well as
for those with school-going children, when schools reopen. The Government
is concerned about the income of its officers and staff. As such,
if its financial position permits, the Government can consider a
salary increase for the civil service. The last salary revision
was implemented in 1995. The Government further increased the basic
salary by 10 percent in 2000. Now, only two years after the last
revision, the Government has decided to once again increase salaries
in 2002, by another 10 per cent, representing an increase in income
of 1.2 months a year. This increase is possible given the higher
Government revenue as a result of economic growth and the Government's
prudent financial management. We hope this bonus payment and the
salary increase together with the abolition of the limit on bonus
payment by the private sector will contribute to increasing the
purchasing power of the majority of the rakyat. I also hope that
this will encourage us to double our efforts towards increasing
productivity and thereby, contributing to growth of the economy.
To improve the scheme of service of Medical Officers in the public
sector, the rate of Overtime Allowances will be increased from 25
to 50 per cent, effective 1 October 2001. This increase is expected
to further enhance the motivation of Medical Officers burdened with
additional work as well as minimise wage differentials between Government
Medical Officers and those in the private sector.
In appreciation of the contribution of volunteers in the security
forces, particularly the Malaysian Armed Forces, Royal Malaysian
Police and Civil Defence, the Annual Gratuity Rate for officers
and personnel will be increased from 400 ringgit to 520 ringgit,
representing an increase of 30 per cent, effective 1 October 2001.
For volunteers in the Malaysian Armed Forces, the specialist grant
for officers, which has not been revised since 1958, will be increased
by 100 per cent from 150 ringgit to 300 ringgit annually. For those
in other ranks, the increase is from 100 ringgit and 75 ringgit
to 200 ringgit, effective 1 October 2001.
Development of Islam
The Government continues to uphold the understanding and knowledge
of true Islam and the development of the Muslim community in this
country. In this connection, the Government will continue to provide
adequate allocation under Jabatan Kemajuan Islam Malaysia (JAKIM)
to implement various development programmes for the benefit of the
Muslim community. A total of 294.3 million ringgit is allocated
for the implementation of programmes for the development of family
institutions and the provision of social services, greater understanding
and assimilation of Islam, education programmes in religious schools
and AI-Quran and Fardhu Ain classes. In addition, the Government
will also continue to implement several development programmes under
JAKIM. These include the building and renovation of mosques and
Islamic training complexes, the building of religious schools as
well as the development of an information system.
In line with the desire of the Government to meet the required number
of Muslims who are able to recite and memorise the AI-Quran, the
capacity of Maahad Tahfiz Darul Quran in Kuala Kubu Bharu, Selangor
will be increased when the second phase of the construction of the
Maahad Tahfiz is completed.
The Government also intends to implement more programmes on the
understanding of the correct teachings of Islam for students in
public and private higher learning institutions, among officers
and personnel in Government as well as in the private sector. Towards
this end, courses will be conducted on strengthening religious beliefs,
spiritual development, appreciation of Islam and human development.
The objective of the Government is to establish a religiously correct
Muslim community. This will only be achieved if there is no deviation
by those given responsibility to teach Islam. For those who propagate
teachings that are against the true teachings of Islam, such as
hatred for other Muslims, rejecting brotherhood of Muslims and branding
other Muslims as infidels and spreading slanders, the allocation
will be terminated. The allocation provided is for purposes of propagating
the knowledge of Islam and not otherwise.
Implication of Tax Proposals
The reduction and abolition of tax proposals will result in a loss
of Government revenue totalling 1.2 billion ringgit. At the same
time, the Government has increased expenditure as a measure to stimulate
domestic economic activities. Thus, the Government must seek other
sources of revenue to strengthen its financial position. Therefore,
I propose that:
i. the threshold for the imposition of service tax for restaurants,
bars, snack bars and coffee houses, private clubs and advertising
companies be reduced from an annual sales turnover of 500 thousand
ringgit to 300 thousand ringgit and above; and
ii. the threshold of 300 thousand ringgit annual sales turnover
for the imposition of service tax on professional services be reduced
to 150 thousand ringgit. In this respect, the Government will step
up enforcement and conduct street surveys to curb tax evasion.
In addition, the Government has provided substantial subsidies totalling
4.4 billion ringgit, of which more than half is petroleum subsidy.
To reduce the financial burden of the Government, I propose that
this subsidy be reduced by increasing the retail price of diesel
by 10 sen per litre. In addition, the subsidy for diesel is provided
only for diesel supply for the use of land transport, Government
and fishing boats. In line with this increase, I also propose the
retail price of petrol be increased by 10 sen per litre. These proposals
are effective from 20 October 2001.
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