Malaysia’s 2017 budget: five things for HR to consider
Author: PM editorial | Date: 26 Oct 2016
Prime minister pledges improved benefits for civil servants and financial help for working parents
Prime minister Najib Razak has announced Malaysia’s 2017 budget, promising an increase of RM260.8 billion (3.6 per cent) on 2016’s budget.
In his speech to parliament, the prime minister said: "We commit to ensuring that the economic fundamentals of the nation remain resilient and strong – including policy on deficit targets, spurred economic activity and the long-term health of the financial system."
But what does the budget mean for HR? Here are five highlights.
1. Civil servants are getting improved benefits
A raft of new benefits are being introduced for public sector workers, including:
- Fully-paid study leave
- ‘Quarantine leave’ of up to five days for civil servants whose children have an infectious disease (eg measles, scarlet fever, flu) and need to be kept at home
- Extension of the existing computer loan facility to include smartphones, with a limit of RM5,000 for every three years
- Increasing the public servants’ housing loans eligibility up to RM750,000
2. The 1Malaysia Training Scheme is being extended for 20,000 graduates
The scheme is a collaborative effort between the government and the private sector, as part of its corporate social responsibility strategy, to enhance the employability of graduates. It began in 2011 and has so far helped over 70,000 graduates.
3. Financial help for working parents
From next year, working parents will be eligible for a tax exemption of up to RM1,000 for sending children aged six or under to registered nurseries and pre-schools.
Mothers will also be eligible for a tax exemption of up to RM1,000 every two years for the purchase of breastfeeding equipment.
4. The digital economy is getting a boost
Malaysia will introduce the digital free-trade zone with tax incentives for digital businesses. Broadband coverage will also be increased, with speeds of up to 20Mbps across the country at more competitive prices.
5. Next year will be the year of the entrepreneur
The government is to declare 2017 as ‘Startup & SME Promotion Year’. This means tax-rebates for “export-oriented SME borrowers” and a new employment pass category called ‘Foreign Knowledge Tech Entrepeneurs’. This will encourage investment in tech startups and make it easier for an organisation to hire a foreigner if they have the right skills.