The much looked forward to Mini Budget 2009 has been just been released. Below are some of the main points of the Second Stimulus Package which I think will benefit people on an individual level. Note that this post does not provide the full Mini Budget 2009 information. I’m only picking out some of the main points which will benefit individuals. More post to come on the business front.

Some background information to the Second Stimulus Package, aka the Mini Budget 2009:

• The package will be implemented over two years, 2009 and 2010. Of this amount, RM15 billion is fiscal injection, RM25 billion Guarantee Funds, RM10 billion equity investments, RM7 billion private finance initiative (PFI) and off-budget projects, as well as RM3 billion in tax incentives. This RM60 billion accounts for almost 9% of the GDP.
• The RM60 billion is allocated to the four Thrusts, as follows: RM2 billion for Thrust One; RM10 billion for Thrust Two; RM29 billion for Thrust Three; and RM19 billion for Thrust Four.
• Of the RM15 billion fiscal injection, RM10 billion is allocated for 2009 and RM5 billion for 2010. The RM10 billion for 2009 consists of RM5 billion for operating expenditure and RM5 billion for development expenditure.

Main benefits of the Mini Budget 2009  for individuals

Employment & Job Creation

• The Government will also establish 22 JobsMalaysia Centres and upgrade 109 existing centres. These Centres will be located in high-density public areas, including shopping complexes to facilitate access for workers and employers to obtain job placements, career counselling and information on training opportunities.
• The Government proposes that employers who employ workers retrenched from 1 July 2008 be given double tax deduction on the amount of remuneration paid. The amount of remuneration eligible for this deduction shall not exceed RM10,000 per month and is limited 9 up to 12 months remuneration per employee. This incentive is applicable to workers employed from 10 March 2009 to 31 December 2010.
• The Government will recruit 63,000 staff to fill vacancies and serve as contract officers in various Government agencies.
• The Government will continue to take steps to reduce the dependence on foreign workers and give priority to hiring local workers by doubling levy on foreign workers paid by employers for all sectors except construction, plantation and for domestic maids, pro-rated refund of th levy for pre-mature termination of foreign workers and the freezing of issuance of licences to foreign labour recruitment agencies and tighten the conditions for recruitment of foreign workers by existing agencies.

Incentives for Self Enrichment Via Education

• The Government will take this opportunity to encourage more Malaysians to pursue Masters and PhD courses. The Government will undertake to finance tuition fees and research grants up to RM20,000 for every student pursuing PhDs locally. For students in the Masters programme, the Government will provide up to RM10,000 per student. A total of 500 places will be provided for studies at PhD level and 10,000 at Masters level in public institutions of higher education as well as at Universiti Tenaga Nasional (UNITEN), Multimedia University (MMU) and Universiti Teknologi PETRONAS (UTP). The programme is open to all Malaysians and selection based on merit. The Ministry of Higher Education will implement the programme.

Subsidies On Food & Toll Charges

• A sum of RM674 million in subsidies will be allocated to avert price increases of necessities, such as sugar, bread and wheat flour. Without these subsidies, the price of sugar will increase RM0.47 per kilogramme, wheat flour RM0.60 per kilogramme, and a 400-gramme loaf of bread by RM0.26. The Government will also provide RM480 million to ensure that toll rates are not increased. With these measures, the Government will allocate a sum of RM27.9 billion for subsidies in 2009.

Promoting Home Ownership

• In the First Stimulus Package, a total of RM200 million was allocated to build 6,500 units of rumah mesra rakyat by Syarikat Perumahan Negara Berhad. In view of the good response from the low income group, the Government will provide an additional RM200 million under this Stimulus Package.
• Government proposes that house buyers be given tax relief on interest paid on housing loans up to RM10,000 a year for 3 years.
• Banking institutions have agreed that retrenched workers defer the repayment of their housing loans for one year. To support the initiative of the banking institutions to extend this repayment period, the Government agrees that the interest income related to the deferment of housing loan repayments be taxed only when such interest is received.

Source: The Star

To read more personal finance and money related articles, visit Penny Sense.

Main points of the Mini Budget 2009 and the benefits to individuals

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Have you found ways to benefit from the new budget 2009 that was announced just a week ago? After reading and re-reading it, I found several small ways to bring out the best of the budget to work to my advantage but it is really dependent upon whether my company will implement the incentives for tax exemption.

Employee benefits given by the employers will now be tax exempted. So I was hoping that the company would review and offer better packages as a whole to its employees. It’s a win-win situation, is it not? It remains to be seen if this will take place. Keep the fingers crossed, real hard!

To read more personal finance and money related articles, visit Penny Sense.

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