KUALA LUMPUR, March 10 (Bernama) -- The government on Tuesday unveiled its second economic stimulus package totalling RM60 billion, comprising initiatives and ideas to invigorate vital sectors to maintain the people's welfare and prosperity in the face of the global economic downturn.
Deputy Prime Minister and Finance Minister Datuk Seri Najib Tun Razak, when tabling the package in the Dewan Rakyat, said it would be implemented over two years -- 2009 and 2010 -- and would have four thrusts.
These were reducing unemployment and increasing employment opportunities; easing the burden of the people, in particular the vulnerable groups; assisting the private sector in facing the crisis; and building capacity for the future, he said.
Najib said the government would continue to implement appropriate measures to strengthen the confidence of the people and ease the burden, particularly of the vulnerable groups.
"In view of the deteriorating global economy, the Second Stimulus Package is significantly larger and more comprehensive, encompassing various economic sectors and target groups.
"This includes workers, consumers, investors, small and medium businesses, exporters and unemployed graduates," he said.
Najib, while being open about the severity of the global economic prospects, said he was confident that Malaysia would be able to face this difficult and challenging environment with the spirit of unity among the people, just as the country had successfully overcome several crises in the past.
He said Malaysia could not depend on orthodox economic recovery policies, but must be bold in formulating innovative approaches to deal with the crisis.
"There have been increasing calls by the people for the government and the opposition to set aside political differences and focus on the economy.
"I personally acknowledge these calls and, therefore, urge all parties, from the government and opposition to focus on the economy and the people," he said, inviting the opposition to work together in the effort.
"There are high hopes, when faced with an economic storm, for us to always work together and think of doing the best for the people," he said.
Najib announced the package, regarded as a mini budget, when tabling the Supplementary Supply Bill 2009 for second reading in the Dewan Rakyat.
On Nov 4 last year, the government announced the First Stimulus Package totalling RM7 billion which, according to Najib, was being actively implemented and RM6.5 billion of which had been channelled to projects.
The second package also gives special focus to the people of Sabah and Sarawak, particularly in the provision of infrastructure for which RM1.2 billion is to be allocated to increase economic activities.
Projects and programmes to be implemented in Sarawak include the expansion of the Sibu Airport, deepening works at Miri Port, repair and improvement of infrastructure damaged by floods and upgrading of schools.
In Sabah, the main programmes and projects to be implemented include the Kota Kinabalu Electricity Transmission System, upgrading of schools, roads and bridges, and resolving issues related to health services at the Queen Elizabeth Hospital.
In his speech of an hour and 15 minutes, Najib acknowledged that Malaysia now faced an extremely challenging economic environment in the context of the difficult global economic scenario, and said that the country's Gross Domestic Product (GDP) was expected to be in the range of negative one per cent to one per cent for 2009.
Najib said that though developed countries had announced large economic stimulus packages exceeding US$3 trillion, including substantial amounts to bail out their financial institutions and large corporations, these measures had yet to restore consumer and investor confidence.
He said the United States, the world's largest economy and trading nation, was expected to experience a contraction of 1.6 per cent, the United Kingdom 2.8 per cent, Japan 2.6 per cent, South Korea negative two per cent, Taiwan negative four per cent and Singapore negative 4.9 per cent.
"In fact, Singapore's Minister Mentor (Lee Kuan Yew) envisaged that Singapore's economy might contract 10 per cent this year," he said.
Najib said Malaysia had to accept the fact that as a highly open economy it was likely to be impacted through declining exports in line with deteriorating world demand; sharp decline in the prices of commodity exports; decline in Foreign Direct Investment (FDI) in line with the global recession; and significant decline in Bursa Malaysia due to the global meltdown in equity markets.
HIGHLIGHTS OF THE SECOND STIMULUS PACKAGE:
* Government unveils RM60 billion second stimulus package to insulate the economy from slipping into recession;
* House buyers given tax relief on interest paid on housing loans up to RM10,000 a year for three years;
* Additional RM200 million for public low-cost housing scheme for low-income earners;
* RM1.6 billion fund to promote investments;
* RM200 million to repair and maintain roads and drains;
* RM150 million for renovation, maintenance and repairs to welfare homes, fire and rescue stations, firemen living quarters and public toilets in mosques, suraus and tourist spots;
* Government to issue syariah-compliant Savings Bonds amounting to RM5 billion this year;
* RM1.95 billion to build and upgrade facilities in 752 schools, particularly in rural areas, Sabah and Sarawak of which RM300 million will be used to improve facilities in government-aided religious schools, Chinese and Tamil schools and mission schools;
* RM230 million allocated to increase electricity supply coverage and water supply in rural areas particularly in Sabah and Sarawak.
* RM350 million allocated for rural road construction.
* Government will provide RM500 million for maintenance of public infrastructure projects, with emphasis to Sabah and Sarawak;
* RM1.2 billion allocated for providing infrastructures and increasing economic activities in Sabah and Sarawak;
* RM300 million for micro-credit programme under AgroBank to assist farmers and agro-based businesses in rural areas and RM50 million for cottage industries.
* RM2 million Fishermen's Welfare Fund to be established and managed by the Malaysian Fisheries Development Authority;
* RM20 million will be provided to improve facilities of day-care centres for the elderly, improve management of women shelter homes and increase facilities for child care centres;
* Existing tax exemption under the retrenchment benefit will be increased to RM10,000 from RM6,000 for each completed year of service;
* Government to establish a Working Capital Guarantee Scheme totalling RM5 billion to provide working capital to companies with shareholder equity below RM20 million;
*Government to establish a Financial Guarantee Institution with an initial RM1 billion in paid-up capital to provide credit to companies intending to raise funds from the bond market. Bonds totalling RM15 billion will be raised under this facility;
* Rights issues by listed companies will no longer need approval from the Securities Commission;
* To encourage takeovers and mergers, the Code on it will no longer be applied to private limited companies;
* Only the Securities Commission has to be informed of any amendments to the terms and conditions of bonds and sukuk issuance;
* Convertible and exchangeable bonds will be exempted from mandatory rating requirements;
* Permanent resident status will be considered for high networth individuals bringing more than US$2 million for investment or savings in Malaysia as an effort to bring high networth and skilled individuals;
* High-skilled foreign professionals may also be considered for Permanent Resident status;
* Government to provide RM2 billion to assist implementation of projects through Private Finance Initiative and public-private partnerships. Private firms to be invited to bid for the funds;
* Government proposes to increase the number of scholarships for entry into local private universities;
* Government-linked Companies to set up 10 not-for-profit private schools;
* The services sector will be further liberalised to woo more investments, bring in more professionals and technology and strengthen competitiveness;
* Foreign Investment Committee to adopt a more liberal approach to bring positive changes and nurture a more investor-friendly environment to attract more investments including foreign direct investment;
* RTM to be allocated RM20 million to implement several projects to develop the local music industry;
* All government procurements will be made through open tenders or restricted tenders except for specific cases.
-- BERNAMA
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