Najib unveils second stimulus package (Updated 5.55pm)

KUALA LUMPUR, 10 March 2009: The government has unveiled a second stimulus package worth RM60 billion to spur economic activity and help prevent a recession, Deputy Prime Minister Datuk Seri Najib Razak announced today.

Following are highlights of the package tabled by Najib, who is also Finance Minister, in the Dewan Rakyat.

• 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, firefighters 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;
• RM500 million for maintenance of public infrastructure projects, with emphasis on Sabah and Sarawak;
• RM1.2 billion allocated for providing infrastructures and increasing economic activities in Sabah and Sarawak;
• RM300 million for microcredit 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 childcare 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;

(Pic by Kiankhoon / Dreamstime)

• 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 net worth individuals bringing more than US$2 million for investment or savings in Malaysia as an effort to attract high net worth and skilled individuals;
• High-skilled foreign professionals may also be considered for Permanent Resident status;
• Effective 1 Feb, levy payments to human resource development fund will be exempted for six months for employers in the textile, electrical and electronic industries;
• Effective 1 April, levy payment rate to be reduced to 0.5% from 1% for all employees for a two-year period;
• Additional RM200 million for the Automotive Development Fund;
• 
  (Pics by Two Hundred Percent; source: Wikipedia)Government to assist in the auto scrapping scheme for Proton and Perodua — a discount of RM5,000 will be given to car owners who trade in their cars which are at least 10-years-old to buy new Proton and Perodua cars;
• Malaysia Airports Holdings Bhd to build and operate a new low-cost airport at the Kuala Lumpur International Airport estimated to cost RM2 billion;
• RM250 million to expand Penang International Airport; 
• A 50% rebate on landing charges will be given for two years effective 1 April to all airlines that operate from Malaysia;
• For investments between 10 March 2009 and 31 Dec 2010, the government proposes that expenses incurred on plant and machinery be given Accelerated Capital Allowance which can be claimed within two years;
• To improve companies’ cash flow, the government proposes that their current year losses be allowed to be carried back to the immediate preceding year. The total losses allowed to be carried back is RM100,000;
• The threshold for windfall profit levy will be increased to RM2,500 per tonne for Peninsula Malaysia and RM3,000 for Sabah and Sarawak;
• RM200 million to upgrade infrastructure in tourist spots;
• Khazanah Nasional’s investment fund will be increased by RM10 billion and will be invested over a two-year period, giving priority to domestic investment that has high multiplier effects and creates more jobs;
• RM100 million to build skybridges and covered walkways between buildings mainly in the Golden Triangle, Kuala Lumpur.
• 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;
• 
  (Pic by Jay Lopez / sxc.hu) 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