budget speech

Najib's 2012 budget speech

I am pleased to announce 2012 as the year of National Innovation Movement. 

43. To provide a brighter future for all Malaysian children irrespective of their socioeconomic background, the Government will ensure quality and affordable access to education. Currently, students in primary and secondary schools are still required to pay RM24.50 and RM33.50, respectively, for co-curriculum, internal test papers, Malaysian Schools Sports Council fees and insurance premium. To ease the burden on parents, it is proposed that these payments be abolished commencing the 2012 school year. With this announcement, for the first time in history, primary and secondary education is provided free. The abolition of these payments would involve an allocation of RM150mil.

44. The private sector also plays an important role in providing quality education towards creating an excellent future generation. In line with this, the Government proposes private schools registered with the Ministry of Education and complies with stipulated regulations be given the following incentives: First: Income tax exemption of 70% or Investment Tax Allowance of 100% on qualifying capital expenditure for a period of 5 years; Second: Double deduction for overseas promotional expenses to attract more foreign students; and Third: Import duty and sales tax exemptions on all educational equipment. The Government hopes that the savings accrued to the private school operators will subsequently result in the reduction of school fees to ease the burden of parents.

45. Registered primary and secondary schools, including national schools, national-type schools, mission schools and Government-assisted religious schools often receive financial contribution from companies and individuals to upgrade school facilities. To encourage more charitable activities, contributions are eligible for tax deductions. This facility will be extended to all registered places of worship. The Government will expedite(speed up) tax exemption approvals for education institution and all places of worship.

56. The 2012 Budget will transform the civil service to be dynamic, responsive and centred on excellence. This includes a radical change in recruitment, placement as well as career development. A flexible remuneration system will be introduced to retain or terminate civil servants based on performance. Civil servants must accept this challenge and be prepared to change. Hence, the Government will introduce the New Civil Service Remuneration Scheme or SBPA as follows: First: Introduce an exit policy for underperforming civil servants and for those who opt to leave the service; Second: Improve the salary of civil servants through a single tier structure with additional increments to enable civil servants to continue receiving annual increments over a longer period. With this, the maximum salary for a particular grade will be higher. For example, under SSM, a teacher on grade DG48 receives a maximum salary of RM6,325.39, while under SBPA the maximum salary will increase 37.7% to RM8,710. For non-graduate teachers on grade DG34, the maximum salary under SSM is RM3,860.52 while under SBPA, will increase 39% to RM5,370; Third: In my recent Teachers' Day message, I announced a better career path for graduate teachers. A teacher no longer has to wait 20 years to be promoted. In the new scheme with a time-based promotion, a teacher will achieve grade 44 on the eighth year and grade 48 on the 16th year of service. For non-graduate teachers under the current time-based system it will take 10 years to be promoted from grade 29 to 32, while under the SBPA it will only take eight years. Currently, promotions from grade 32 to 34 are based on vacancies. However under SBPA, a time-based eight years promotion will be applied; and Fourth: The Annual Increment has not been revised since 1991. Beginning 2012, the annual increment of civil servants will be increased between RM80 and RM320 according to the grade. In addition, civil servants who opt to accept the SBPA will receive an annual increment between 7% and 13%.

57. The Government realises the financial burden faced by pensioners. With the implementation of SBPA, more than 600,000 Government pensioners will benefit from a pension adjustment which involves an allocation of RM600mil. Effective 2013, the Government will implement an annual pension increment of 2% without having to wait for any review of the remuneration system or salary adjustments.


88. The Government sympathises with doctors who have to work continuously for more than 45 to 120 hours per week. This situation is clearly not conducive for them to provide quality service. To ease the situation, the Government introduced a flexible schedule with an average of 60 working hours per week for housemen. To replace the on-call allowance for housemen, the Government introduced a Special Flexible Working Allowance of RM600 per month, effective 1 September 2011. For medical officers and specialists, the Government will also increase the overnight on-call allowance between RM30 to RM80, effective on the same date.


94. The Government is committed to ensure that no accused person is denied legal representation. Currently, about 80% of the accused in criminal cases appear in court without legal representation because of high legal costs. The National Legal Aid Foundation will ensure that every individual who is charged in court will be given free legal aid. For this, the Government will provide an additional RM10mil in 2012 bringing the total sum provided to RM15mil.

105. Currently, futsal is increasingly popular amongst youth and sports enthusiast. To promote this sport, the Government has built a total of 1,100 futsal courts nationwide, while another 527 courts are under construction. In view of the popularity of this sport, the Government will allocate RM15mil to build an additional 150 futsal courts to achieve the “One Court for One Mukim” target. To increase recreational activities particularly football, the Government will also allocate RM50mil to build football fields with artificial turfs, equipped with floodlights at 30 selected locations nationwide.

106. High-performance sports including football, badminton, squash, bowling, diving, archery and cycling will also be given attention. The Government will provide an additional allocation of RM30mil, making a total of RM84mil, to train young potential athletes so they can compete and succeed in international sports competition.

107. The welfare of senior citizens has never been neglected particularly for them to obtain public amenities such as medical and transport services. For this, I am pleased to announce, from 1 January 2012, all senior citizens aged 60 years and above will be exempted from paying the outpatient registration fee in all Government hospitals and health clinics including 1Malaysia clinics as well as the Government dental clinics. They will also be entitled to a 50% discount on LRT and Monorail fares.