KUALA LUMPUR: Prime Minister and Finance Minister Datuk Seri Abdullah Ahmad Badawi presented the budget for 2006 to Parliament Friday with the theme "Strengthening Resilience, Meeting Challenges", reflecting the main thrust of the budget.

Datuk Seri Abdullah Ahmad Badawi presenting the Budget for 2006 to Parliament Friday.

HIGHLIGHTS

The 2006 Budget strategies focusses on:
1. Implementing proactive Government measures to accelerate economic activities
2. Providing a business-friendly environment
3. Developing human capital
4. Enhancing the well-being and quality of life of Malaysians

The budget plans an expenditure of RM136.8bil, an increase of 5% over 2005, aimed at better development and quality of life for the people.

Of the amount, operating expenditure, which includes the normal runing of the government such as civil servants pay, will be RM101.3bil; while the rest will be for development expenditure, which will also involve new projects.

Cigarette tax increased by 13%, while tax on liquor up by 9%.

Bonus for civil servants to be paid in two equal instalments in October and November.

Automatic income tax relief of up to RM4,000 for each child (RM9,000 for disabled children) studying in local institutions of higher learning.

With the exception of vehicles in Sarawak, private diesel vehicles exceeding 1,600cc will be given road tax deduction of 40%, effective Oct 5.

Stamp duty and real property gains tax to be abolised on mergers and acquisitions of listed companies. This will be effective from Oct 1 this year and till the end of 2007. The aim is to strengthen the capital market.

A total of 334 posts will be established to facilitate one-stop centres in all local authorities in expediting the processing of licences and permits, as well as payment of assessment fees and fines.

E-payment transactions using credit cards at counters and online will be implemented at the Royal Malaysia Police Force (PDRM), Road Transport Department, Immigration Department and EPF as well as hospitals.

Emphasis will be given to skills training and technical expertise. RM493 million is allocated for the enrolment of students in technical, vocational and skills training, which will be increased from 72,000 students for this year to 98,000 in 2006.

In addition, an allocation of nearly RM1 billion is provided for trade and industrial training at Institut Kemahiran MARA, Pusat Giat MARA, Institut Kemahiran Belia Negara, Industrial Training Institutes and Advanced Technology Training Centres.

To continue its long war on drug abuse Pemadam is to review rehabilitation methods. RM207 million allocated for National AntiDrug Agency to undertake prevention treatment and rehabilitation programmes and management of 29 rehabilitation centres

Liquor section at a supermarket. Tax on liquor up by 9%- Starpic by Joel Chan

Another concern has been AIDS. The health Ministry is to set up Advisory Panel to formulate an integrated action plan to fight HIV and Aids. Number of cases this year has risen to 65,000

Government to spend RM1.1bil to build 26,000 housing units for teachers, members of the armed forces, police, firemen and customs officers.

A Health Tourism Unit will be established under the Ministry of Health to improve the quality of health services to attract more foreigners to seek private health services in Malaysia.

The Prime Minister and Finance Minister delivering the budget speech in parliament (right).

Khazanah Nasional will be establishing a National Agriculture and Food Corporation. Initial apital for the project will be RM500mil. It is aimed to make it a centre of excellence in agricultural supply chain management.

The government has been emphasising on development of biotechnology and in line with this it is contributing RM100mil to launch the 'Malaysian Life Sciences Capital Fund'. This is to encourage investments in biotechnolgy to be managed by Malaysian Technology Development Corporation.

The agriculture sector is allocated a sum of RM2.8 billion for development expenditure, primarily for agriculture, animal husbandry, fishery and forestry.

Agriculture Counsellor Offices will be established abroad to promote Malaysia's agricultural products.

The Fund for Food (3F) will be further increased by RM300 million to ensure sufficient funding for the food production industry.

The Government will establish a new company with an initial funding of RM200 million to develop forest plantations commercially.

RM400 million allocated to finance agricultural projects of GLCs.

Group relief to companies within a group, with a minimum of 70% ownership between them. The group relief allows 50% of a company's current year losses to be offset against the profits of other companies in the same group.

Security officer Ramli Itam watching the PM's budget speech in Johor Baru. - Starpic by Abdul Rahman Embong

For companies with Pioneer Status, accumulated losses and unabsorbed capital allowances during the pioneer period will be allowed to be carried forward and be deducted from the post-pioneer income.

To provide skilled managers and directors with integrity, especially for GLCs, a Management Leadership and Directors Academy will be established as a centre of leadership excellence.

To encourage more REITs, the Government proposes to allow tax deductions on legal, valuation and consultancy expenses.

A Yayasan Amanah Hartanah Bumiputera, a Bumiputera property trust foundation with an initial capital of RM2bil is to be established to purchase commercial properties in prime locations.

The Government plans to upgrade teacher training to ensure that all teachers in secondary schools and at least half the teachers in primary schools were graduates.

A shop assistant stocking up at cigarette section at Citi Supermarket on Sept.28. - Starpic by Joel Chan

Abdullah said said the government would stress on rural development to give a better life to the rural people. This includes better education, water and electricty supply and roads. About RM5.7bil would be spent for this.

The government has pledged to go all out and fight increasing crime. In line with this the police force is to be reinforced. RM3.5bil has been allocated for operational expenditure and RM493mil for development expenditure. In addition police personnel in lower ranks would be reimbursed for stitching uniforms with up to RM100 per uniform for three uniforms.

One of the aims of the government was to lower the the budget deficit from the current 3.8% of the gross domestic product to 3.5%. It was 5.6% in 2002.

Sabah state has been allocated RM2.3bil for 2006 to build roads, and improve water and electricity supply as well as education and health services

Sarawak has been allocated RM2bil to provide better roads, airports and education.