Malaysia's Budget 2018 Will Be People-Centric, Equity Market-Friendly, Says Research House

KUALA LUMPUR, Sept 27 (Bernama) -- The Malaysia's Budget 2018 would be people-centric, equity market-friendly and emphasise on the country’s aspirations for the next 30 years under the Transformasi National 2050 (TN50). In a note on Wednesday, RHB Research Institute Sdn Bhd said, in line with the budget’s theme, ‘Shaping the Future’, the government was expected to lay the foundation for TN50 by implementing measures such as improving the Internet connectivity and expanding growth in the digital economy. "It would also incorporate ride-sharing services and provide a higher allocation for education," it said. The research house said the budget would also focus on facilitating the Industry 4.0, as well as promoting high-technology industries in areas of automation, robotic development, big data and cloud computing. "Among the initiatives the government may impose include introducing tax incentives targeted at Industry 4.0 and increasing the funding for the soft loan scheme for automation and modernisation. Besides, it said, efforts to tackle the rising cost of living would undertaken, such as increasing salaries, benefits and allowances for civil servants; extension of the 1Malaysia People's Aid programme; assistance for Federal Land Development Authority's settlers; and, providing incentives to increase income of the bottom 40 segment, as well as granting more tax reliefs. It said that affordable housing would remain a concern, with subsidies expected to be provided for affordable homes buyers, while tax relief would be given to private developers. "On the development of small and medium enterprises, improving financing and possible reduction in the tax rate would be expected under the Budget 2018," it said. RHB Research said the government would also increase the expenditure in 2018 by 4.3 per cent to US$63.79 billion (RM269.3 billion, US$1 = RM4.22) from an estimated RM258.2 billion in 2017, on an expectation of higher revenue from stronger crude oil prices and tax collection. Overall, it said, expectations that the budget could be a market-friendly budget containing “goodies” for individuals and businesses further compounded the feel-good factor. "Of course the extent of the generosity would be capped by the state of public finances. "On the flip side, the market would also want to see continued fiscal discipline under the watchful eyes of international rating agencies," it said. The institute said the fiscal deficit for 2018 was expected to be further trimmed to 2.9 per cent of gross domestic product from the target of three per cent in 2017. -- BERNAMA