Prime Minister Datuk Seri Mohd Najib Tun Razak has announced an allocation of RM280.25bil for Budget 2018.

This is an increase of RM19.45 billion over the 2017 budget allocation of RM260.8 billion.

Of the total Budget 2018 figure, RM234.45bil is for administration, the remaining RM46bil is for development. The federal government revenue collection is expected to record RM239.86 billion.

The Prime Minister also forecasted that Malaysia's income per capita is expected to rise to RM42,777 by 2018, median monthly income in the country has risen from RM4,585 in 2014 to RM5,288 in 2016.

The Budget 2018 theme is: Prosper with Inclusive Economy, Balancing duniawi (worldly) and ukhrawi (other-worldly) excellence to better the lives of the rakyat towards the TN50 aspirations.

Overall, the Prime Minister announced that Budget 2018 has eight core thrusts,  namely;

1) Invigorating Investment, Trade and Industries

2) Towards TN50 Aspiration

3) Empowering Education, Skills and Training, and Talent Development

4) Driving Inclusive Development

5) Prioritising the Wellbeing of Rakyat and Provide Opportunities to Generate Income

6) Fortifying the Fourth Industrial Revolution and Digital Economy

7) Enhancing Efficiency and Delivery of GLC Companies and Public Service

8) Balancing Between The Par Excellence of Worldly and Hereafter

The first thrust is to enhance investment, trade and industry. The amount of domestic investment is expected to increase by 6.7%. Private investments are expected to touch RM260 billion in 2018, in line with goals to make the private sector an engine of growth.

Under this thrust, Pulau Pangkor will be declared a tax-free zone (excluding liquor, cigarettes and motor vehicles).

In addition, there’s a RM30 million allocation for the Malaysian Healthcare Travel Council (MHTC) to implement initiatives, among them to promote Malaysia as the Asian Hub for Fertility Treatment, IVF and Cardiology; to introduce the Flagship Medical Tourism Hospital Programme.

The Prime Minister also announced that the construction of the MRT3 or Circle Line to be completed by 2025, earlier than the initial target of 2027.

The second thrust is towards achieving TN50 aspirations. For that every Malaysian child born from Jan 1, 2018 until 2022, will be given RM200 worth of Amanah Saham units in new fund called Amanah Dana Anak Malaysia 2050 or ADAM50.

The second thrust also includes:

- RM2.2 billion for scholarship grants under the Public Service Department (JPA), Higher Education Ministry and Health Ministry

- RM400 million for research grants and development for public universities, including special allocation to Universiti Malaya to become one of the Top 100 universities globally.

- RM90 million allocated for MyBrain Programme for 10,600 people to further their studies at the Masters and Doctorate level.

- University and Form Six student to continue receiving book vouchers worth RM250, benefiting as many as 1.2 million students.

- RM1bil for initiatives spanning FitMalaysia, National Sports Day, athlete programmes, grassroots programme and the national football development programme.

- RM20 million for the Bukit Jalil Sports School to upgrade its facilities as a premier sports school

The Third Thrust is to achieve excellence in Education Development, Training, Skills and Talent. A total of RM61.6 billion has been allocated for sector. 

- About 550 million is allocated to special fund for improvement and upkeep of schools, as follows:
RM250 million for national schools; 

- RM50 million for Chinese schools; 

- RM50 million for Tamil schools; 

- RM50 million for Mubaligh (missionary) schools; 

- RM50 million for full boarding schools; 

- RM50 million for Maktab Sains Rendah Mara, and

- RM50 million for government-aided religious schools.

In addition, Government is to extend discount on repayment of PTPTN loans until Dec 31, 2018, grace period for PTPN loan repayments extended to 12 months after graduating, loans for those furthering studies can now be combined.

The Fourth Thrust is to drive inclusive development, where about RM6.5 billion Budget 2018 allocation for rural development will include:

- RM2 billion for the Pan-Borneo Highway; 

- RM1.1 billion to upgrade bridges, streetlights, villages, surau and markets; 

- RM1 billion for SKMM to upgrade the communication infrastructure and broadband facilities in Sabah and Sarawak; 

- RM934 million for rural road projects, including almost RM500mil for Sabah and Sarawak; 

- RM672 million for electricity supplies, including RM620mil for Sabah and Sarawak involving 10,000 rural homes; 

- RM420 million including almost RM300 for Sabah and Sarawak provided for clean water supply involving 3,000 homes; 

- RM500 million allocated for the Public Infrastructure Maintenance Programme and Basic Infrastructure Project; 

- RM50 million for mapping and measurement of custom lands, in which RM30 million is for Sarawak and RM20 million for Sabah.

In addition, almost RM9 billion is allocated for Royal Malaysian Police, including RM720 million to build 11 headquarters and six police stations, purchase of new firearms and operational vehicles, RM170 million to upgrade ICT equipment, including 1PDRMnet system.

Over RM14 billion will be allocated for the Armed Forces, including RM3 billion for purchase and maintenance of defence assets and RM250 million for Esscom to enhance coastal security controls in Sabah and Sarawak.

The Fifth thrust is prioritising well-being of rakyat and income-making opportunities.

This include theannouncement of two percentage point reduction in income tax for the middle income (M40) group with household income of RM9,000 and below, benefiting 2.3 million taxpayers.

The Individual tax rate will be reduced by two percentage points, for those with chargeable income from RM20,000 to RM70,000.

The government has taken the move to increase rakyat's disposable income by around RM300 to RM1,000, resulting in an estimated excess of RM1.5bil in disposable income to be spent by the rakyat.

New tax rates for three income brackets are as follows:


1) RM20,001 to RM35,000 (3%)


2) RM35,001 to RM50,000 (8%)


3) RM50,001 to RM70,000 (14%)

This also means that over 261,000 people will no longer have to pay income tax.

Budget 2018 still includes up to RM3.9 billion in subsidies, for items, goods and transport, cooking gas, flour, cooking oil, electric subsidies and toll.

Another good news are the abolishment of toll collection at Batu Tiga, Shah Alam and Sungai Rasau in Selangor; Bukit Kayu Hitam, Kedah and at Eastern Dispersal Link, Johor from Jan 1, 2018.

The budget also proposed that the mandatory maternity leave for private sector to be increased from 60 to 90 days; and women who are returning to work after two-years will get to enjoy tax exemption for 12 consecutive months.

There is also RM27 billion allocation to improve healthcare, including RM1.4 billion to upgrade and maintain health facilities, medical equipment and ambulances; and  RM100 million to upgrade hospitals and clinics electrical/wiring systems.

Cost of hiring foreign domestic helpers is also to be reduced, employers can now employ foreign domestic helper directly from nine source countries, without going through an agent.

Zero-rate GST for all reading materials, extended to cover all magazines, comics, journals and periodicals from Jan 1, 2018.

The Sixth thrust is preparing for the fourth Industrial Revolution and the Digital Economy. Under this,

- RM5 billion for for Green Technology scheme, RM1.4 billion for non-revenue water programme, RM1.3 billion for off river storage, RM517 million for flood mitigation

- RM83.5 million for Phase 1 DFTZ Aeropolis; minimum value for imports raised to RM800 from RM500 so Malaysia can be the regional e-commerce hub

The Seventh thrust is to enhance efficiency and delivery of government-linked companies (GLC) and public service through”

- GLC employees to enjoy increased benefits such as flexible working hours, childcare centres in offices

- Increase allowance for senior citizens to RM350 per month, RM50 increase for working and unemployed People with Disabilities (PWD) as well as caretakers.


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