Monday, 30 September 2019

(NST) 'ECRL can be a test case for China's BRI'

KUALA LUMPUR: The East Coast Rail Link (ECRL) project can be one of the test cases for Belt and Road Initiative (BRI) in terms of financing and long-term risk mitigation, said Deputy International Trade and Industry Minister Dr Ong Kian Ming.

He said the government, in terms understanding how the rail project can be financially viable and sustainable for long term, had renegotiated the deal via a Memorandum of Agreement (MOA) between Malaysian Investment Development Authority (MIDA) and China Communications Construction Ltd (CCCC).

"As part of the MOA between MIDA and CCCC, the turnkey contractor has the obligation to build full infrastructure.

"In addition, there is also an obligation to build transit-oriented development (TOD) for the stations along the ECRL line as well as to build logistics hub for these stations so that the entire ecosystem in terms of goods as well as passenger-cargo being utilised can be enhanced," he told reporters at the launch of Belt and Road Economics Report entitled “Opportunities and Risks of Transport Corridors” here today.

He said there was a need to make sure that the capacity of the construction and complementary policies not only involve the turnkey project contractor but also the stakeholders. 

"This is so that we can build up the right kind of ecosystem for investment in the industrial park as well as trade bringing new businesses coming from China that can integrate with local small and medium enterprises (SME) so everyone can benefit.”

The ECRL, which originally had a price tag of RM65.5 billion, was cancelled when the Pakatan Harapan government came into power after May 9, only to be resumed on April 12 this year at a lower cost of RM44 billion. 

"Rather than we go back and relook at the cost to which we already negotiated, let's look forward to increase economic activities that we can generate from this enhance ECRL deal," he said.

Meanwhile, Ong said the BRI, with its focus on connectivity and integration, has the potential to contribute and create a more vibrant supply global chain.

He explained that there is a need in understanding on impacts of various BRI projects and how these projects can be translated into spillover effects and investments.

Ong said some areas had yet to be understood include the shifts in terms of production arising from the US-China trade war.

Through independent and empirical analysis, the BRI study is designed to help policymakers in developing countries weigh the potential benefits and risks of participating in BRI projects. 

It assesses the network of proposed transportation projects in about 70 countries along land and and provides a series of policy recommendations to help developing countries along those corridors maximise potential benefits while reducing the risks.

(NST) AirAsia set to implement reduced PSC at klia2 from tomorrow

SEPANG: AirAsia guests will have reason to celebrate on Tuesday as it proceeds with the implementation of the reduced passenger service charge (PSC) at klia2 and other international airports in Malaysia where it operates.

This follows last month’s announcement by the Malaysian Minister of Transport Anthony Loke of the Cabinet’s decision to revise downward the PSC for passengers travelling outside of Asean from RM73 to RM50 effective Oct 1.

“We fully respect the Cabinet’s decision and as per the minister’s announcement, we will proceed with charging the reduced PSC from 1 October 2019. As the airports belong to the Government, the Cabinet certainly has every power to implement changes to the PSC,” AirAsia Group President (Airlines) Bo Lingam said.

He said the fact that the Cabinet had chosen to reduce the applicable PSC to RM50 demonstrates that the PSC rates set by the Malaysian Aviation Commission (Mavcom) were maximum rates rather than fixed rates, consistent with statements made by Mavcom.

“For this reason, we believe there is no need for further gazetting of the lower PSC rate for it to become effective on Oct 1.”

He said that as a special thanks to its guests and supporters, AirAsia will be having a 23-hour “Shared Prosperity” promotion on Oct 1, offering a 23 per cent discount on all seats to destinations beyond Asean including Tianjin, Melbourne, Seoul, Jaipur, Tokyo and Taipei, for immediate travel through to Feb 9, 2020.

The “Shared Prosperity” promo will be available on and the AirAsia mobile app, and includes hotel bookings. There are also special discounts on merchandise and duty-free items on

“We would like to thank the Government and all Malaysians for supporting our cause towards a fair PSC and making air travel affordable for everyone. This will hugely benefit not only air travellers but also the tourism industry and economy as a whole,” said Bo.

Air travellers will enjoy cheaper PSC for international flights at all airports in Malaysia, except Kuala Lumpur International Airport (KLIA).

The PSC rate for domestic and Asean flights at all airports remains at RM11 and RM35 respectively.

The government decided to review the PSC charges to reduce tax burden, in light of the new levy tax under the Departure Levy Act 2019 which came into place on Sept 2.

In July last year, Malaysia Airports Holdings Bhd had imposed a new PSC of RM73 on passengers using klia2 to destinations beyond Asean, which is the same rate applied at the full-service KLIA terminal and RM23 higher than the previous rate of RM50.

(NST) A sovereign wealth fund to build a port, bridge for RM12b in Labuan?

KUALA LUMPUR: A neighbouring country’s sovereign wealth fund, which manages US$226 billion portfolio, has presented a RM12 billion proposal to Labuan Corp, a prospect that will single-handedly uplift Labuan's economy.

This is one of a dozen proposals that have been submitted to the authority to help develop the federal territory.

Labuan Corp has also received proposals from foreign big names including China State Construction Engineering that are also keen to take part in the island's economic uprising.

Labuan Corp chairman Datuk Seri Amir Hussien said the sovereign wealth fund’s proposal entails its grandiose plan to build a new multi-cargo port and a bridge connecting Labuan and Sabah, which will likely cost around RM4-RM5 billion.

It also involves a development of Labuan's Pulau Daat for tourism as well as an investment into Labuan Financial Services Authority (LFSA), he added.

"The RM12 billion is a long-term investment. They are serious. Although this would have a significant impact on Labuan's economy, we will continue to work aggressively to attract more foreign direct investments.

"The firm had sent a few teams to Labuan for due diligence to look into a few sectors which may be value accretive for them. This includes infrastructure, logistic and tourism," Amir Hussien told the New Straits Times.

He said under the proposal, the wealth fund was looking into building a bridge that would link Labuan, Pulau Daat and Menumbok, Sabah.

"With that, the cost to build a bridge may be higher. We are looking at around a range of RM4-RM5 billion," he said.

In early September, Federal Territories Minister Khalid Abdul Samad said a high-level working committee was compiling proposals and be officially calling for request for proposal for the construction of the bridge.

Amir Hussien said the proposed new port will be located in Rancha Rancha Industrial Estate, not far from Labuan Port.

An analyst contacted by the NST said building and operating a multi-cargo port in the island would be a strategic move for the neighbouring country to expand its port footprint in the region.

"It will be a strategic move for the neighbouring country to take advantage of growing trading activities in the South China Sea region," Putra Business School business development manager Assoc Prof Dr Ahmed Razman Abdul Latiff said.

However, he said there must be a few considerations that need to be made.

"Firstly, will this project going to be a collaborative work with its Malaysian counterpart, Khazanah Nasional Bhd? If the project is viable and potentially can bring high income, we would also want to be a partner in form of joint venture or equity sharing," he said.

Secondly, Razman said Malaysia also needs to consider the security issue by having a port that is managed by a foreign country in Labuan.

"In short, this kind of plan requires detailed discussion and negotiations between the two governments to ensure it will be a win-win situation for both,” he added.

(NST) Forever 21 to file for bankruptcy

FOREVER 21, the California retailer that helped popularize fast fashion in the United States with its bustling stores and US$5 tops, said night that it would file for bankruptcy, a sign of the eroding power of shopping malls and the shifting tastes of young consumers.

The private, family-held company capped months of speculation about its restructuring efforts by saying that it would cease operations in 40 countries, including Canada and Japan, as part of a Chapter 11 filing. It will close up to 178 stores in the United States and up to 350 overall.

Forever 21 said that it would continue to operate its website and hundreds of stores in the United States, where it is a major tenant for mall owners, as well as stores in Mexico and Latin America.

“What we’re hoping to do with this process is just to simplify things so we can get back to doing what we do best,” Linda Chang, the chain’s executive vice-president, said in an interview. Chang’s parents, Do Won and Jin Sook Chang, who still run the chain, founded Forever 21 in the 1980s after immigrating to California from South Korea.

The bankruptcy is a blow to a company that prided itself on embodying the American dream, as well as a reminder of how quickly the retail landscape is transforming.

Forever 21 experienced big success in the early 2000s with its troves of merchandise that imitated of-the-moment designer styles at rock-bottom prices.

It joined Zara and H&M in making fast, disposable fashion widely available to American shoppers, especially young women, who were exposed to new wares seemingly every time they entered a store.

Forever 21, which said e-commerce made up 16% of its sales, saw its revenue drop to US$3.3 billion last year, down from US$4.4 billion in 2016. It expects the restructured company to bring in US$2.5 billion in annual sales. The company employs about 32,800 people, down from 43,000 in 2016.

(The Star) Gearing up to draw tourists

JOHOR BARU: Tourism Malaysia is doubling up local and international promotion as part of its efforts to achieve Visit Malaysia 2020’s (VM2020) target of 30 million tourist arrivals and RM100bil in tourism receipts.

Tourism Malaysia deputy director-general (planning) Zulkifly Md Said said some of the initiatives were rolled out earlier this year, such as optimising the use of information and communication technology and engaging in smart partnerships with industry players.

“Optimising information and communication technology is an engaging approach in promotion, publicity and advertising efforts while social media is one of the best platforms for promoting Malaysia.

“We have initiated various smart partnerships with our industry players aside from leveraging on the presence of international hotel brands who continue to place their trust by setting up their hotels in Malaysia, ” he said in his speech at the Tourism Malaysia Media Night at R&F Sales Gallery.

He added that Tourism Malaysia had partnered with the Tourism, Art and Culture Ministry, Tourism Johor, R&F Sales Gallery, Legoland Malaysia as well as private operators to encourage more familiarisation participants.

Tourism Malaysia also partnered with hotels such as Amari Hotels & Resorts, DoubleTree by Hilton Hotels, Westin Hotels & Resorts, Hard Rock Hotel, One & Only Resorts and Anantara Hotels & Resorts.

Zulkifly also pointed out that as of June 20, Tourism Malaysia has 3.3 million Facebook followers, 76,684 Instagram followers, 422,632 Twitter followers and 45.7 million views on YouTube.

He added that in 2018, it managed to record 25.8 million international tourist arrivals with tourist receipts amounting to RM84.1bil.

“As a comparison, Malaysia received a total of 25.9 million international tourists in 2017, with RM82.2bil in tourism receipts.

“As for 2019, in this first six months, Malaysia recorded a positive tourist arrival growth of 6.8%, registering a total of 13,354,575 tourist arrivals compared to 12,730,368 in the same period last year, ” he added.

Zulkifly said this was the result of strategic initiatives and other promotional efforts.

Meanwhile, Johor tourism, women, family and community development chairman Liow Cai Tung said the state government was gearing up and creating lots of interesting upcoming events and packages for next year’s Visit Johor 2020.

“We are trying to pump up the online content on Johor’s tourism products and tourism sector to create an even stronger online presence.

“We want more information on Johor’s attractions to be available online through search portals and social media channels, ” she said.

Liow added that it was the state government’s aim to create more content to eliminate the frustration faced by travellers who have heard of Johor but could not find much information on the state.

“The media, whether mainstream or social platforms, play an important role as partners of the tourism industry to spread awareness and publicity on tourism products and packages to the public, ” she added.

(The Star) Making e-commerce social

E-commerce has made quite a mark in the retail scene. As brick-and-mortar businesses face the challenge of slower sales and the need to adapt, the fast growing digital retail segment, it seems, is also faced with increasing competition as e-commerce evolves.

Newly launched e-commerce operator Fingo says there is a new business model in town and this is expected to eventually catch on with merchants and consumers.

Its chief executive officer Dong Fang says that Fingo is a social e-commerce platform, a concept made popular in China thanks to companies such as Nasdaq-listed Yunji and Beidian. These social-based e-commerce platforms operate on the new retail management model known as the S2B2C (supply-to-business-to-customer) model.

Like Yunji, Fingo is a membership-based e-commerce platform. Through the platform, merchants are able to reach out to an ever growing network of consumers, which enables them to gather data and feedback that would give them a better idea of what customers are looking for, says Dong. Consumers or members, on the other hand, are encouraged to grow the network by sharing product links and related content with new users. They assist in the buying and selling of products and are then rewarded with points and coupons when others use their referral links.

Dong explains that this model combines social media and e-commerce elements. While it is an e-commerce platform, it uses the group-sharing and marketing model to market products and merchants on the site.

Fingo works with established names in the consumer products industry from China as well as emerging local brands.

Dong says there is an untapped potential in South-East Asia for this new model and he is confident that it can compete with established e-commerce players as it addresses a new segment of consumers who are essentially social media savvy and are more drawn to the opinion of trend setters.

According to Dong, Fingo is currently ranked sixth in terms of the number of downloads in Malaysia.

He has a clear ambition: to be the dominant e-commerce and marketing platform for SMEs in the region.

New era: Dong says there is vast potential for social e-commerce to thrive in South-East Asia.

The company will start talks by this year to raise up to US$100mil (RM419mil) in new funds to help its expansion into at least six other markets in the Asean region, says Dong. It is targeting investments from Chinese venture capitals (VC) and other South-East Asia technology focused funds.

Dong and Messi Wang Nan, Fingo’s co-founder and chief operating officer, are currently the majority shareholders in the company while a China-based VC holds a minority stake.

The company started its Malaysian operations in December last year. Expansion into Thailand, Vietnam, Singapore and Indonesia is expected to start in the next few months, followed by the Philippines by the end of the year.

Fingo currently has more than 200,000 active members in Malaysia alone and the number is expected to exceed 500,000 by year-end, says Dong.

Dong says the company has invested about RMB100mil (RM58.9mil) over the past one year to set up the entire operations, including an IT support operation in Hangzhou, China and its Malaysia mobile e-commerce app and operation platforms.

He adds that Malaysia made for a good base for Fingo due to the favourable demographic, relatively cheaper cost and high penetration rate for social media platforms. Operations here will provide the company with a strategic base to eventually penetrate the major markets in Asean.

Hangzhou remains its preferred IT support hub as the city has become an e-commerce hub thanks to Alibaba’s headquarters and the city’s proximity to consumer goods suppliers, many of whom have factories in the region.

Troubled start

While many see the present as the “golden age” of e-commerce, Dong notes that the industry is rife with competition in almost every area. But with the right data and strategy, he says it is not impossible for a new kid on the block to make a breakthrough.

Fingo has laid out a clear vision on how to change the e-commerce landscape here with its retail concept, but it has to clear a few hurdles following its initial introduction in Malaysia.

After its public launch in July, Fingo received some unpleasant surprises. There were complaints from the public unfamiliar with its model and calls to stay away from the site.

Dong maintains that Fingo has obtained the necessary approvals to operate its platform. The company has also taken the effort to meet with the relevant ministry to explain its model and seek assurances that its business is legit.

“Our B2C platform does not require any sales agents or distributors and all sales and distribution including after-sales service and collections are managed entirely by Fingo Malaysia. We are purely an e-commerce platform that offers referral incentives, ” he says.

Inflection point

Fingo is convinced that most Asean countries are at an inflection point in e-commerce, similar to where China was 10 years ago when Alibaba first pioneered the adoption of online commerce in the country.

Dong, who spent 13 years with the Alibaba Group, says Asean, including Malaysia, presents the company with a vast opportunity to introduce its services. To demonstrate the potential the region has, Dong points to the value of China’s market.

The market scale of China’s social commerce sector is expected to reach RMB2.07 trillion (RM1.2 trillion) in 2019, an increase of 63.2% year-on-year, given the increasing use of mobile technologies to access social media.

One of the reasons social commerce has become a driving force for e-commerce is due to the growth of mobile technology. With more and more people using their mobile phones and tablets to do online shopping, group buying has gained traction and fuelled the proliferation of e-commerce on social networking platforms.

However, he notes that each market in the region has its own unique characteristics, which means the company has to take on a careful approach with each market. Malaysian consumers, he notes, favour a good mix of diversified and personalized products.

Currently, more than 80% of Fingo’s products that are listed on the platform are from Alibaba’s e-commerce sites Tmall and Taobao but Dong expects that over time, over 60% of the total products will be sourced from merchants and businesses from within Asean. He adds that many local entrepreneurs are already thinking about starting an e-commerce business and this could be a good opportunity for them.

Another potential that the company is hoping to tap is the opening up of cross-border marketing for SMEs in the region. Compared with the traditional e-commerce model, the essence of social e-commerce is to leverage the role of consumers in the sales process. Through the decentralisation of customers and services, businesses will have better market reach.

Having taken the bold step of making Malaysia its base, Fingo aims to be the catalyst for business owners to embrace change not just in the way products and services are sold, but also in the way businesses communicate directly with consumers.

Should Fingo’s social commerce model gain traction, it would certainly attract more tech newcomers to join the fray. While competition will no doubt intensify as the market in South-East Asia matures, Dong says Fingo’s first mover advantage will ensure its pole position in replicating Alibaba’s success in this new era of e-commerce.

(The Star) Waterfront development set to be Sabah’s crowning glory

KOTA KINABALU: Crown Service Suites, a RM900mil high-end mixed development project located in the heart of the city, is set to meet the growing number of tourists to Sabah.

Derek Wong Kit Leong, chief executive officer of Ho Hup Group, the project’s developer, said Sabah had been seeing an encouraging increase in tourist arrivals, particularly from China, Korea, Japan and Hong Kong.

“They have been fuelling the growth of the hospitality industry, especially in the tourism real estate sector.

“We believe everyone, from tourists to investors, will really appreciate what the Crown Service suites have to offer, ” Wong said at the launch of the suites sales gallery and show unit by Chief Minister Datuk Seri Mohd Shafie Apdal.

The waterfront project comprises 323 high-end service suites, 376-room five-star international suites and 4,625sq m of retail space.

The size of the suites ranges from 126sq m to 185sq m.

Wong said sales had been good so far, with a 60% take-up rate for properties ranging from RM1.26mil to RM2.43mil.

The duplex units and penthouses are priced between RM3mil and RM4.61mil.

The project is expected to be completed in 2022.

Shafie said the project, a joint venture with Kota Kinabalu City Hall, was needed for Sabah to meet the growing demand in the state’s tourism industry.

“I am told that there is high interest among buyers, which reflects positively on investor interest in the state, ” he added.

Shafie said such a development would create employment opportunities for local youths with spin-off for local businesses through the arrival of more tourists.

(The Star) ‘Govt needs to widen tax base’

KUALA LUMPUR: The government has to widen its tax base to strengthen the country’s fiscal position because the current system based on the Sales and Services Tax (SST) is only predicted to collect RM22bil this year, says the Malaysian Institute of Certified Public Accountants (MICPA) president Dr Veerinderjeet Singh (pic).

This is a huge shortfall as the previous tax system – the Goods and Services Tax (GST) – had managed to collect RM44bil.

In a recent announcement, Finance Minister Lim Guan Eng said there will be no new tax measures in the upcoming Budget 2020.

Tax experts said with current oil prices hovering around US$55 (RM220) to US$65 (RM260) per barrel, the 2020 budget should be drafted in that range to avoid over dependency on Petronas’ reserves.

Since last year, the benchmark Brent Crude had peaked at US$84 per barrel before sliding to US$53 per barrel in January.

Veerinderjeet said that in the current economic situation, the government should consider widening the tax base.

“Currently, only two million of the workforce are contributing to income tax. Besides the workforce, there are also people with high levels of income who do not pay income taxes. This is because our current low salary level, coupled with various tax incentives, have caused many to be excluded from paying taxes, ” he told Bernama.

He added that SST only covers 38% of the basket of goods, compared with 60% under GST.

He said with technological advancements, the Inland Revenue Board, commercial banks and Bank Negara Malaysia should have an interlinked system to identify tax evasion.

“With technology, it would be difficult for tax evaders to run away, hence bringing those people under the tax net, ” said Veerinderjeet, who added that the government should also look into the shadow economy as some studies show this sector accounts for approximately 30% of the nation’s gross domestic product.

From an economic and tax policy perspective, there has also been support for reverting to the GST due to its transparency and ability to collect higher revenue.

Veerinderjeet said what makes GST clearer is the input and output tax, which is difficult to manipulate.

Meanwhile, Deloitte Global Indirect Tax Clients & Industries Leader, Senthuran Elalingam, said the reintroduction of GST will provide a wider tax base and a more efficient collection.

“The government has acknowledged that GST is a more efficient system than the current SST regime. However, the question remains on the timing, ” he said, adding that there needs to be a study how it can be effectively implemented, including solving issues such as late payments of GST refunds.

“If Malaysia is to reintroduce the GST at some point, we would need to learn from what didn’t work so well the first time and have measures in place to ensure GST 2.0 succeeds, ” he said.

While the government has announced that it would implement a service tax of 6% on digital services on Jan 1,2020, the Customs Department has yet to announce the guidelines. — Bernama

Sunday, 29 September 2019

(NST) Malaysia, Singapore agree to extend deadline of RTS link project to Oct 31

KUALA LUMPUR: Malaysia and Singapore have agreed to extend the deadline to decide on the Johor Baru-Singapore Rapid Transit System Link (RTS Link) project by another month.

The Transport Ministry in a statement said the deadline has been extended to Oct 31 this year without involving any additional cost.

The Supplemental Agreement to suspend the RTS Link from April 1 to Sept 30, 2019, was signed by Malaysia’s Minister of Transport Anthony Loke Siew Fook and Singapore’s Coordinating Minister for Infrastructure and Minister for Transport Khaw Boon Wan on May 21 this year.

The project was initially scheduled for construction this year and expected to be completed by December 2024.

It was aimed at addressing congestion in the daily commute between the two countries.

The RTS Link project would cover 4km of rail linking Bukit Chagar (Johor Baru) and Woodlands (Singapore), with the capacity to ferry 10,000 passengers per hour.

According to Loke, under the original agreement, the one-way fare was set at RM15 and would burden some Malaysians who travel daily to Singapore for work. -- Bernama

(The Star) Lee: Vital to provide social safety net for senior citizens

PETALING JAYA: Malaysia could emulate the approach taken by other countries which have introduced various financial incentives for employers to hire or retain older workers and subsidise job training for them, says social activist Tan Sri Lee Lam Thye.

Lee said since the cost of living was expected to increase in the years to come, it was important to provide a social safety net, including allowing healthy and experienced senior citizens to work.

“Malaysia must also have a more comprehensive social security programme since studies show that the retirement income for most older people is inadequate, ” he said in welcoming the government’s proposal to introduce a legislation to protect the rights of the elderly.Describing this as “timely” due to the growing number of elderly people in the nation, Lee said he often heard stories of senior citizens who were not properly taken care of and even left to live in deplorable conditions.

“It pains me whenever I read about parents being abandoned at a hospital, welfare home or even bus stop by their own children or relatives, ” he said in a statement here yesterday.

On Monday, Deputy Prime Minister Datuk Seri Dr Wan Azizah Wan Ismail had said that a Bill for senior citizens was expected to be tabled in Parliament in early 2021 due to the increasing number of cases of neglect and abuse of the elderly.

Lee also called for more non-governmental organisations to be set up to care for the elderly neglected by their family members or suffering from illnesses, adding that more help was also necessary to ensure that they remain in the community by providing daycare centres and day hospitals, social clubs, rehabilitation, counselling and consultation centres, volunteer schemes and home nursing.

Lee said the Social Welfare Department’s “Homehelp Volunteers” programme, which allowed volunteers to visit senior citizens at least thrice monthly to monitor their health and social development, had helped to solve many problems faced by the elderly in their neighbourhood.

It also made neighbours more aware of the problems and needs of a senior citizen living among them, he added.

“Our main aim in caring for the elderly is to ensure that they can have a quality life in their twilight years.

“But the most important thing for the young generation now is to practise noble values, including respecting and caring for the elderly who have sacrificed a lot to raise us up.”

(The Star) Budget to focus on women’s participation in workforce

GEORGE TOWN: Budget 2020 will focus on women’s participation in the employment sector, says Lim Guan Eng (pic).

The Finance Minister said one of the issues that would be addressed in the new Budget would be the shortage of women in the workforce.

“Based on the statistics, only 56% are women while 80% of men are currently employed.

“It is important to improve women’s participation and create more job opportunities for them.

“More women participation in the workforce will be good and beneficial for the country because it is something that can further boost productivity, ” he said at a press conference in Mount Miriam Cancer Hospital in Tanjung Tokong yesterday.

Lim said another focus was to see the unemployment rate go down.

“We want to reduce unemployment among youths and graduates, and increase productivity, ” he said.

Lim added that it was also incumbent upon the private sector to play a greater role in the economic development.

“If we want Malaysia to achieve a developed nation status, it has to be led by the private sector. The private sector is more efficient and productive, ” he said.

Lim is scheduled to table Budget 2020 in Parliament on Oct 11.

Saturday, 28 September 2019

(NST) 'Walkway will ensure travellers' safety, comfort'

JOHOR BARU: The plan to build a covered, three-storey pedestrian walkway on the Causeway received the thumbs up from travellers who frequently commute between Johor and Singapore.

Most of them feel that the walkway will provide comfort and safety for people who would walk on the busy overland link than endure traffic congestion.

Some of them said it would be a joy to use a walkway built for pedestrians.

Singaporean Ben Low, 66, said travellers would no longer have to suffer from the hot sun or rain if the walkway was built.

“It is a good idea by the Malaysian government. It would make it more comfortable for travellers,” said Low, who travels to Johor Baru several times a week.

He said it took him about 20 minutes to walk across the Causeway.

“Although I no longer walk as often as I used to, I know the hardship that pedestrians on the Causeway go through.

“This walkway will benefit us.”

Another commuter, Osman Talib, 36, said besides comfort, a walkway would ensure the safety of pedestrians.

“What is more important is that the safety of the travellers will be assured. At the moment, there is no proper pedestrian lane.

“If it is possible, why not make the walkway air-conditioned? By building it that way, maybe more people would walk across the Causeway and this may reduce congestion,” he said,

The Johor government recently announced a proposal for the construction of a 1.2km pedestrian walkway on the Malaysian side of the Causeway as part of efforts to reduce congestion at the checkpoint.

The project was one of the recommendations at the first meeting of the Special Committee on the Causeway Congestion, chaired by Prime Minister Tun Dr Mahathir Mohamad on Aug 21.

The committee also announced a slew of improvements, with an initial RM70 million allocation, which will mostly go towards improvements to Immigration clearances at the Sultan Iskandar Customs, Immigration and Quarantine Complex.

(The Star) Stories for young designers

Avenue K shopping centre has launched a pop-up store in collaboration with Esmod Kuala Lumpur, featuring 11 of the latter’s designers and renown veteran fashion designer Eric Choong.

Esmod is a local fashion design school, under The One Academy, with affiliation to Esmod Paris fashion design school.

The pop-up store called Stories was launched by Avenue K general manager Phang Sze Sze.

Phang said Stories would be an ideal platform to highlight emerging talents in the Malaysian fashion industry.

“At Stories, the young fashion designers from Esmod are showcased alongside Choong’s batik-inspired apparel.

“Avenue K hopes to contribute to raising Malaysia’s competitive advantage by providing a fashion avenue for local talent to innovate and position the country as a thriving fashion capital, ” she said.

A chic attire suitable as officewear designed by Hooi.

“We envisioned this space to be a place where local talents can come tell their stories hence the name Stories.

“If you are a fashion designer, your designs celebrate the story of your life or an inspiration of a story that has happened in your life, ” Phang said.

She added that Stories was not just a place for fashion but also for food and beverage, with Midorie Cafe and Artigiano ice-cream kiosk located at the pop-up store.

The One Academy representative Loke Va Nee said, “We are very delighted to see Esmod’s graduates put pedal to the metal and actually feel what the industry is all about at Stories.

“Stories is a place where we really want to see local talents come together and have a platform to share, ” she said, adding that Malaysians can support these local talents by buying their apparel.

The launch was accompanied by a showcase of the selected designers’ work.

"I thought it would be a great platform for my graduate students to present their own brands." - Eric Choong

Models paraded 30 outfits from the young designers and six pieces from The Art of Eric Choong by Eric Choong collection.

The designers from Esmod were Tay Sin Yee, Shawn Er, Hooi Ho Mun, Scott Tian, Joanne See, Giovani Phandi, Liew Hui Ying, Will Lim and Au Ee (who started the brand Lazyheads together), Pong Zi-Qing and Liren Ho.

They are aged between 20 and 25.Choong, who is also Esmod’s fashion design programme leader, helped select the fashion designers whose work were showcased at Stories.

“Avenue K approached me about a collaboration for a pop-up store. I thought it would be a great platform for my graduate students to present their own brands.

“I interviewed the students I mentored and selected the individuals who were keen and ready to come up with their own brand, ” he said.

Regarding his own collection, Choong said he wanted to represent Malaysia and its culture.

“I have always used batik fabric in my designs.

An ensemble from Ho's brand, Liren.

“It is a very vibrant and artistic fabric, and it represents Malaysia to the world, ” he said.

Newcomer Hooi, 21, said her brand Homun Hooi was inspired by her boyfriend.

“I love to wear my boyfriend’s shirts.

“It reminds me of the one I love, and it is comfortable to wear.

“Similarly, I want my collection to be comfortable and also remind the wearer to cherish those who love them, ” she explained.

One of Liew’s designs under her brand, LHY.

Tian, meanwhile, became interested in fashion design when he was 17 after watching a Lady Gaga music video.

“I was amazed by the clothes in the video and I researched the designer.

“From there, I started to like fashion designing, ” he said.

“My brand is called Scotty, as my friends call me Scotty so I want my customers to feel like they are my close friend, ” he added.

Tian said his debut collection at Stories was inspired by his tattoo.

The Stories pop-up store collaboration is at Lot M-1, Mezzanine Floor of Avenue K in Jalan Ampang, Kuala Lumpur, until February next year.

(The Star) New place to stay in the highlands

The 11th and latest addition to the Swiss-Garden International Hotels, Resorts and Inns family has been unveiled.

Swiss-Garden Hotel and Residences, Genting Highlands, offer guests cool climate with average temperatures of between 19°C and 25°C.

It is also the hotel chain’s third in Pahang, with the other two being Swiss-Garden Beach Resort Kuantan and Swiss-Garden Resort Residences, Sungai Karang.

Pahang Mentri Besar Datuk Seri Wan Rosdy Wan Ismail launched the hotel by signing a plaque.

Also present were OSK Group executive chairman Tan Sri Ong Leong Huat, OSK Group executive director Datuk Saiful Bahri Zainuddin, OSK Group managing director Ong Ju Yan, Swiss-Garden International chief operating officer Peter Gan and hotel general manager Sonny Gan.

To mark the event, there was a muhibah drum performance, ribbon-cutting ceremony and lion dance.

Saiful said the 40-storey hotel, which has 561 rooms, is a 40-minute drive from Kuala Lumpur and caters to both leisure and business travellers.

He said guests could also look forward to dining at the Garden Terrace Café which is located on the fifth floor with panoramic views of the highlands.

“The café has indoor and outdoor dining options and serves local and international dishes.

“It is a perfect venue for events and meetings and can accommodate up to 300 guests, ” said Saiful.

The residences block is expected to be opened to the public by the end of October.

The Alcove on Level 41 is ideal for wedding receptions, business meetings and private events.

Other facilities include an indoor gym, rooftop heated pool, outdoor jacuzzi, squash and tennis court, and playground. There are 500 parking bays for the hotel and residences.

Guests can take advantage of the nearby theme park, casino, entertainment, cinema as well as the dining and retail options including the Genting Highlands Premium Outlets.

Wan Rosdy said the Pahang government practises an open-door policy and welcomes investors.

He said during a recent state government trade mission to Singapore, they attracted investments worth about RM1.13bil.

The hotel is located at Windmill Upon Hills, Jalan Permai, Genting Highlands, Pahang.

For details, call 03-9213 0777, visit or email

(The Star) LIAM: Need to make life insurance more affordable

There have been calls to make life insurance policies in Malaysia more affordable in order to boost the take-up of coverage among the rakyat, especially the Bottom-40 (B40) group, who make up the lowest-earning households in Malaysia.

According to Life Insurance Association of Malaysia (LIAM) chief executive officer Mark O’dell (pic), while the government has in the past introduced various measures to help lower insurance premiums in the country, more can still be done to encourage the B40 segment to get individual coverage.

Speaking to Starbizweek, O’dell says LIAM’S wish for Budget 2020 is for the government to introduce a subsidy scheme to support the take-up of policies under the Perlindungan Tenang – Mampu & Mudah initiative.

To increase the take-up rate of insurance among the B40 households, the life insurance industry has come up with the Perlindungan Tenang – Mampu & Mudah initiative (in 2017), which is a low-insurance-premium-protection-plan programme, to serve the needs of all Malaysians, especially the B40 segment,” he says.

He notes the importance of the programme has been recognised by the government, which under Budget 2019, granted incentives such as stamp-duty waiver for all the affordable plans under the Perlindungan Tenang initiative.

“Recognising that premium affordability is key, we further propose that the government provides a one-to-one subsidy for the premiums paid by this group of rakyat, so as to bring down the effective cost to them to below 50 sen per day. This can be introduced on a phased-in approach,” he says.

O’dell says the proposed subsidy could be granted on a voluntary basis.

“For instance, an individual under the Bantuan Sara Hidup scheme can select whether or not he/she wishes to purchase the Perlindungan Tenang plan. If the premium for this individual (and his household) is RM100 per annum, the insurance premium payable by this family will be RM50. The RM50 could be deducted from the Bantuan Sara Hidup disbursement, while the balance RM50 will be supported by the government,” he explains. (see diagram)

At present, the number of households enrolled in the Bantuan Sara Hidup, a government’s cash aid programme, is estimated at four million.

Assuming the take-up rate for the voluntary Perlindungan Tenang programme is 1%, or 40,000 households, the costs to be borne by the government per year would be RM2mil.

“This subsidy could be introduced for a limited period of time, say, two years. This will provide an opportunity for the B40 group to appreciate the importance of life insurance protection (particularly if the insured member or family receives a claim) and to continue with the insurance after the two-year period,” O’dell explains.

The social and economic welfare of the rakyat is important as a key indicator of progress and development of the nation. As such, the importance of the population having some form of insurance protection is critical, especially the B40 group, who is vulnerable to financial disturbance, O’dell points out.

“The support from the government is important to empower the B40 group to take the first step to introduce financial planning in their families,” he says.

“Ultimately, it is hoped that through the government’s support in pushing the B40 segment to take up Perlindungan Tenang protection plans for themselves and their families, it would help materialise the nation’s aspiration of insuring 75% of the population,” he adds.

Finance Minister Lim Guan Eng early this month hinted that Malaysia would unlikely achieve its national-insurance-penetration-rate target of 75% by 2020.

At present, almost half of the Malaysian population remains uninsured, he said.

Lim noted the country’s life insurance penetration rate had been relatively stagnant for several years now at 55%.

On the situation, he said: “I think it’s a question of pricing and affordability.”

Urging insurers to develop insurance protection plans for the under-served and under-protected, largely from the B40 group, Lim said insurance policies in Malaysia must be made more affordable in order to boost the country’s insurance penetration rate.

(The Star) Budget 2020 – a balancing act

In exactly two weeks, the Pakatan Harapan government will unveil Budget 2020, against a grim backdrop of a weakening external environment.

With no resolution in sight to the ongoing global trade tensions, and the possibility of a global economic recession in the near future – the government has its work cut out for it.

Economists and analysts have all been weighing in with their opinions about what needs to be incorporated in the upcoming budget announcement, in order to shield and strengthen the local economy.

The general consensus seems to be that the government must take an expansionary approach to Budget 2020, which will also be the last under the 11th Malaysia Plan.

An expansionary fiscal policy refers to efforts by the government to expand the supply of money in the economy.

This can be done by increasing expenditure or decreasing taxes, or both, in order to provide households and businesses with more disposable income.

Pakatan Harapan has also indicated that it could go down the expansionary route, with Finance Minister Lim Guan Eng saying last month that while the government wants to consolidate its debts, it is not completely ruling out an expansionary budget to mitigate the effects of the trade war.

When it comes to increasing expenditure, however, there is also the budget deficit to worry about, and as a consequence, the risk of the country having its credit rating downgraded by international agencies.

The government’s initial target was to bring down the federal government budget deficit to 3% in 2020.

The fiscal deficit was 3.7% last year and is expected to be down to 3.4% this year.

At the same time, Pakatan Harapan is also under pressure due to the many promises in its election manifesto that it is still yet to fulfil, and faces financial constraints given the debt-ridden government it inherited on May 9, 2018.

Affin Hwang Capital chief economist Alan Tan says there is a need to introduce an expansionary budget to sustain economic growth as well as revenue from direct taxation.

Looking at conditions going into 2020, and the recent findings of the Trade and Development Report 2019 published by the United Nations Conference on Trade and Development (UNCTAD), Tan says it is clear that 2020 will be a challenging year.

The report, launched last Wednesday, found that while a global recession was looming, most policy-makers globally were unprepared for the economic downturn.

“We need to preserve our revenue collection from direct taxation.

“Assuming the global economy and the Malaysian economy slows, revenue from direct taxation will also deteriorate,” he says.

To prevent this, Tan says an expansionary budget is necessary, in order to sustain domestic demand and the economy.

Revenue collection from direct taxation, he notes, fluctuates closely with economic performance.

The expansionary measures, he says, will likely come from a possible higher allocation for development expenditure, with a much higher multiplier effect on the economy.

Even with an expansionary approach, Tan expects the fiscal deficit to only rise to 3.2% of gross domestic product (GDP) in 2020.

“When we look at the country’s fundamentals, Malaysia’s current account is still in surplus.

“We also expect oil prices to hover at about US$70 per barrel next year, which will support our oil revenue,” he says.

On risks to Malaysia’s credit rating, he says a downgrade is unlikely.

“Given the uncertainties in the external environment, rating agencies will take note that fiscal measures are needed, and that this will result in some deterioration in the deficit,” he says.

UOB Research senior economist Julia Goh, meanwhile, expects the government to set aside around Rm5bil to Rm8bil in contingency funds to cushion the economy against any adverse impact of Us-china trade tensions and a potential global slowdown.

Early last month, the Finance Minister said the upcoming budget would put in place contingency measures to insulate the country from effects of the ongoing trade war.

Goh, in a note, drew comparison from two stimulus packages that were announced during the global financial crisis in November 2008 and March 2009, which included a direct spending package, other measures and incentives that covered government guaranteed funds, private finance initiatives and off-budget projects.

In the first fiscal stimulus of Rm7bil, announced in November 2008, priority was given to projects with a high multiplier effect, low import content and which could be implemented expeditiously.

These included upgrading, repair and maintenance of public amenities and public transport; building low- and medium-cost houses; and investment funds to attract private investment.

Later, as the global recession deepened and Malaysia’s external sector weakened, a second, more comprehensive stimulus package amounting to Rm60bil was announced in March 2009.

The package, realised over two years, was aimed at stimulating the economy in the short term while building its long-term productive capacity.

Its key measures included a direct fiscal injection of Rm15bil, guarantee funds of Rm25bil and Rm10bil in equity investments, among others.

“We think the priority of contingency measures for 2020 would be on high-impact and high-multiplier projects,” Goh says.

If the contingency funds are fully utilised, she expects that Malaysia’s fiscal deficit could widen to between 3.5% and 3.7% of GDP next year, above the research house’s baseline forecast of 3.2%.

“We do not expect this to necessarily pressure Malaysia’s sovereign ratings in view that these are counter-cyclical measures aimed to stabilise the domestic economy amid a sharp deterioration in the global landscape,” she adds.

Increased assistance required for businesses

The weakening global economy and decline in exports signifies tough times for any business that is involved in international trade.

In Malaysia, it is estimated that about 98.5% of the country’s businesses fall under the SME category.

This, KPMG Malaysia head of tax Tai Lai Kok says, means it is vital that the government puts in place strategic measures to help the group.

“In view of the ongoing challenges, SMES will need more assistance than in previous years,” he says in an interview.

Tai also notes that, given the weaker ringgit at the moment, SMES could be provided with assistance to boost exports.

“We must intensify efforts to provide funding support for SMES, perhaps even providing micro-financing - we must do all we can to make it easier for them to compete in a tough market,” he says.

On another note, he says the government should also consider tightening its belt, given that about 83% of the expenditure in Budget 2019 was allocated for operating expenditure, and only 17% or Rm54bil was used for development.

He suggests that a higher allocation is provided for development in Budget 2020, while not causing too much of an impact on the deficit.

The government, he says, can do this by reviewing how much is spent on subsidies, given that Rm22bil was spent on this in Budget 2019 on petrol subsidies and cash handouts.

“Although this is a contentious issue, it must be noted that many economies have taken the position that subsidies are not an effective measure.

“People will continue to expect handouts and this is not an effective way to utilise government resources,” he says, adding that providing more targeted assistance to those in need would be a better option.

Another area to consider, Tai says, is the country’s debt service charges or interest payments, which amounted to Rm33bil in the previous budget.

“If we continue to have a deficit, we will continue to incur these costs.

“While we do need an expansionary budget, we must ensure that our revenue goes up,” he says.

Noting that while the government’s efforts to increase revenue via the ongoing tax amnesty programme have raked in significant revenue, it is a one-off measure.

The Special Voluntary Disclosure Programme (SVDP), which will come to an end on Sept 30, was introduced in Budget 2019 to coax taxpayers to voluntarily declare any unreported income, including in offshore accounts, by promising a low penalty rate of only 10% to 15%.

The tax amnesty offer was to have ended in June this year, but was extended to Sept 30.

Tai says the government needs to explore other ways to improve tax revenue while not increasing tax rates or introducing new taxes that will burden taxpayers.

“We can look at defaulters - those who have never submitted tax returns.

“The government, via the goods and services tax (GST) database, has a wealth of information on businesses that had registered for the GST in the past,” he says.

Tai says some of the businesses that had registered for the GST may never have filed income tax returns before.

The government, he says, could cross-check its income tax database against its GST database to identify likely defaulters and pursue them.

“At the same time, the government must act responsibly to gain the confidence of taxpayers.

“While increasing enforcement is necessary, the government must also be quick when needed to provide refunds to taxpayers,” he says.

In a contrarian view on taxes, meanwhile, economist Prof Dr Hoo Ke Ping says that the only way to ride out the impending storm is for Pakatan Harapan to bite the bullet and reintroduce the GST.

This, he says, is a necessary move to bring in much-needed tax revenue for the country.

He suggests, however, that the tax is brought back at a lower rate of about 4% instead of the previous 6%.

Hoo says the implementation of the tax would not be difficult as all the systems are already in place, and businesses would not be burdened.

“Desperate times call for desperate measures.

“The government needs to swallow its pride and bring back the GST, which could easily generate RM25bil for government coffers next year,” he said.

While it may not be a popular move, she said, it is necessary given he weak economic conditions and he government’s financial conraints.

Instead of going after taxpayers, such as through the amnesty programme, Hoo says bringing back the GST is a much better solution.

It is worth noting, however, that the Finance Minister recently said that the government will not be proposing an increase in taxes in the upcoming budget.

He was quoted as saying that while increasing taxes, including the corporate tax, was the global trend, the government would not propose it for the time being. Hoo, in an interview, adds that another measure the government must consider is improving and increasing tax incentives to spur domestic and foreign investments. “Malaysia is losing foreign investors to neighbouring countries – we need to go all out to fight for these investments,” he says, adding that the capital market is also in need of a boost.

Datuk Harjit Singh Sidhu, CEO of business consultancy HSS Advisory Sdn Bhd, on the other hand, is of the opinion that a tax exemption is the way to go.

To help Malaysians deal with an impending rise in the cost of living, and to boost their disposable income, he says the government could consider exempting tax payments for those earning monthly salaries of RM8,000 and below

“Instead of collecting taxes from individuals with an annual income of RM96,000 and below, the government can consider exempting these individuals to increase their disposable income.

“This can create a ripple effect of increased spending throughout the economy,” he says.

Harjit estimates that this would give these individuals an additional disposable income of RM5,000 to RM7,000 which could be put towards household spending on goods and services.

The tax collected from the individuals under this tax bracket, he says, is negligible compared to corporate and other taxes.

Another measure, he says, would be to stimulate the property market as the number of unsold units continues to rise.

“With this in mind, the government can propose a tax exemption for a year or two on the disposal of any assets or shares in a real property company to further stimulate the property market.

“This means that there will be no real property gains tax (RPGT) for the period,” he says, adding that the collection from the RPGT market in 2018 was also relatively insignificant at Rm1.47bil.

Third, he suggests that targeted tax incentives, such as 10-year tax breaks can be introduced for foreign companies, such as Fortune 500 companies.

For these companies to qualify, they must fulfil certain conditions such as a strict employment of 95% Malaysian workers and professionals and a requirement to buy Malaysian produce or products.

The Finance Minister is scheduled to table Budget 2020 in Parliament on Oct 11.

(The Star) Budget 2020: Expansionary stance on the cards

With more flashing signs of less propitious global economic backdrop and the risk of a global recession is “high and rising” going into 2020, Malaysia’s real GDP growth is likely to decelerate to 4.5% in 2020 from an estimated 4.7% in 2019.

After making some sacrifice in Budget 2019, the nation is expecting a public cum business-friendly and pro-growth Budget 2020 against the backdrop of rising global recession risks, the trade tensions’ disruption on exports, lack of private investment especially domestic direct investment, income distress for B40 households, graduates’ unemployment and the lack of policy direction.

Focusing on the appropriate budgetary stance and being prepared to be more expansionary is especially crucial during rising global economic uncertainties. We advocate pragmatic fiscal policy, which focuses on economic stabilisation amid domestic challenges and global uncertainties. The budget must contain short-and medium-term strategic measures to provide a genuine counter-cyclical stimulus if the downside risks to the global economy do transpire.

The government should not be too fixated on achieving the targeted fiscal deficit while finding a balance in turbulent times. The budget must manage trade-offs between supporting domestic demand, protecting social spending, and ensuring the optimal mix of spending depending on sector-specific requirements.

The budget deficit for 2020 is estimated to be around 3.2% of GDP, a slight improvement from estimated 3.4% of GDP in 2019. Gross development expenditure is estimated to rise by 4.6% to RM56bil in 2020 (estimated RM53.5bil in 2019).

We expect the budget to balance priority and gives direction to the economy, focusing on high impact sectors, quick gains initiatives and measures that would protect growth-enhancing spending and investment. The key thrusts, which amongst others to strengthen economic resilience, sustain domestic spending and investment, save jobs, create jobs and help viable companies staying afloat. It also prepares Malaysia to emerge stronger and enhance our enterprise and worker capabilities and competitiveness for the long term.

A. Sectoral allocation

Allocate more budget for development expenditure, focusing on education, utilities, ports, healthcare, housing, digital infrastructure, tourism, industrial development and SMEs.

Smart and green technology projects and climate change, including flood mitigation, renewable energy, public infrastructure, airports upgrading and ports projects. Development of suburban nodes, roads and rail networks, drainage and sewerage networks, and public housing community, especially the low-cost flats and apartments rejuvenation.

Allocation for the maintenance and repairs, including renovation and restoration of government buildings and complexes.

Continuation of existing and potential new projects include LRT3, MRT2, highways, airport, power plants, Johor Baru-Singapore Rail Transit System Link (RTS), and Pan Borneo Highway Sabah. Some of the delayed implementation of 121 projects valued at RM13.93 billion earmarked for 2019 due to the adoption of open tender as well as implementation capacity constraint, will be carried forward into 2020 and beyond.

B. Jobs preservation and creation

On job prospects and disruptions caused by technology, the following thrusts are vital to ensure quality job creation, raise workforce adaptability, enhance inclusiveness and complementarity between local and foreign workers, and build fair and progressive workplaces.

Provide jobs credit for the training and employment of graduates and diploma students; skills upgrading program; and the freezing of foreign workers’ levy hikes in 2020 and also defer the implementation of a tiered foreign levy till 2021;

Establish a one-stop jobs bank and non-stop online marketplace that are user-friendly to provide better search functions for job seekers. The online marketplace is to be equipped with individual learning portfolio portal to upskill their capabilities;

Expand the channels of job-matching services through closer collaboration between academia, industry and private-sector employment agencies through focus on active job seekers, not passive job seekers;

Introduce the “Attach-Train-Employ” programme by giving some form of incentives and tax rebates to incentivize private sector in providing job opportunities for fresh graduates; and

Introduce New Enterprise incentive scheme to support eligible job seeker, who is interested in starting and running a small business, and will get practical small business training, business mentoring and financial assistance from the scheme.

C. Uplifting productivity and manpower development

Provide allocation for Skill and Productivity Enhancement through the revamping of Technical and Vocational Education and Training (TVET). Tax deductible training expenses should be given to private sector in manpower training and development, including a revamp of Human Resource Development Fund (HRDF);

Introduce various measures such as SkillsFuture and Workforce Skills Qualifications Fund to ensure that Malaysians remain employable in the face of automation and digital disruption; and

Introduce the skills for education and employment program for fresh graduates and college students to improve soft skill such as speaking, reading, writing or communication in the workplace.

D. Reinvigorate private investment

Private investment’s momentum had moderated from 12.1% pa in 2011-15 to 5.9% pa in 2016-18. Though private investment printed a higher growth of 1.8% yoy in 2Q19 (0.4% in 1Q), uncertainty surrounding global trade tensions and prevailing weaknesses in the broad property segment continued to weigh on the investment growth performance.

Approved domestic direct investment (DDI), which had declined by 8.8% per annum from RM175.1bil in 2014 to RM121.2bil in 2018, continued to contract by 29.6% to RM42.5bil in the first half-year of 2019.

Increase the grant for technology, industrial deepening and R&D as well as automation to facilitate SME in the adoption of IR 4.0;

Extend Reinvestment Allowance (RA) indefinitely from the current qualifying period of 15 years of assessment, focusing on companies investing in information, communication and technology (ICT), digital, high technology equipment and automation;

Enhance Accelerated Capital Allowance (ACA) for machinery and equipment;

A moratorium on hikes in foreign worker levy for next three years till 2021 to ease manpower cost of SMEs. In efforts to increase labour productivity and production efficiency, the levies should be ploughed back into a Designated Industrial Revolution/Adjustment Fund that provides financial support or technical assistance to firms to facilitate automation, mechanisation and technological development;

Enhancement of bank lending guarantee, especially to SMEs through enhancing existing schemes on risk-sharing initiative; and

Enhancing business cash-flow and cost of doing business via a rebate in quick rent and assessment for industrial and commercial properties, business fees and licences; road tax rebate for taxi, buses and lorries.

E. Enhancing domestic consumption

Supporting households, especially B40 and targeted vulnerable group via direct cash assistance;

Special cash assistance of RM500-RM1,000 for 1.6 million civil servants;

Review personal income tax rate so that the middle- and high-income earners do not hit the highest tax rate bracket so quickly. This is to reward productivity and boost consumption;

House rental payments to be given a personal tax relief of up to RM4,000 annually, mainly for M40 households. In the 2018 Budget, a 50% income tax exemption was given on rental income not exceeding RM2,000 per month for each residential home. This is to encourage landlords to reduce their rents but intrinsically rents are market driven based on the supply and demand;

Personal tax relief on tuition fees (primary & secondary) up to RM2,000 annually;

“Buy Malaysian Products” campaign;

Re-introduce tax relief for interest payments on housing loan up to RM10,000 per year. The interest relief is only entitled for one unit of residential property for owner-occupied and not renting out;

To increase lifestyle tax relief from RM2,500 to RM3,000 annually;

To revise personal tax relief from current RM9,000 to RM10,000. The last revision was in 2010; and

Increase the tax relief for EPF’s contribution and life insurance premium to RM6,000 each.

F. Easing property overhang pressure

The persistent overhang in residential and commercial properties require urgent attention and prompt policy intervention. Since 2012, growth of the construction sector had continued its downward trend, with the annual growth rate decelerating sharply to 4.2% in 2018 and 0.4% in the first half-year of 2019 from an average annual growth of 11.4% per annum in 2014-2018. Both residential and non-residential subsector had contracted in 2018 and in 1H 2019 amid the oversupply of residential and commercial properties.

In 2Q 2019, total overhang of residential properties remained high to increase by 12.3% y-o-y to 32,810 units valued at RM19.7 billion. For commercial properties, the number of overhangs increased by 25.5% from 4,361 units in 1Q 2018 to 5,472 units in 1Q 2019, with the value jumped 42.9% to RM4.5 billion from RM3.2 billion 1Q 2018.

Growth in Malaysia’s House Price Index (HPI) has slowed for six consecutive years, from 13.4% in 2012 to 3.1% in 2018 (6.5% in 2017). In 1Q 2019, house price index eased further to 1.3%.

With the construction sector supporting the growth of around 140 other downstream industries, a sustained weak growth would have ripple effects on the economy.

The government must be pragmatic and flexible, recalibrating the Real Property Gains Tax (RPGT) in times of lackluster property market condition against the backdrop of weakening economic and business environment.

Review the threshold for the foreign purchase of properties. Between 2012-2016, foreign purchases of properties only accounted for 0.3% (706 units) -1.0% (2,406 units) of total properties transacted;

Review of RPGT, including the abolishment of 5% RPGT on the disposal of property after the fifth year; and

Extend the National Home Ownership Campaign (HOC) until 31 December 2020, together with the stamp duty exemption.

Lee Heng Guie is the Socio-Economic Research Centre executive director. The views here are the writer’s own.