Malaysia Budget 2018 Commentary by Datuk Yasmin Mahmood, CEO of Malaysia Digital Economy Corporation (MDEC).
We are delighted that Budget 2018 is focused on accelerating growth and enhancing the well-being of the rakyat as well as further enhancing Digital Malaysia.
During the 29th Implementation Council Meeting (ICM), Prime Minister Dato’ Sri Najib Tun Razak emphasised the importance of the digital economy and how it can become the new engine of growth for Malaysia. He also announced a new stream of initiatives to boost nationwide digital transformation, and details of these initiatives were unveiled at the Budget 2018 announcement.
Digital inclusivity and generating income for the rakyat
The RM100 million (mn) allocation for the eRezeki and eUsahawan programmes would ensure that the digital Economy continues to be inclusive for the well-being of the rakyat, particularly to the B40 and M40 groups. With both programmes going into their third year, we estimate that 150,000 people will be trained in 2018; resulting in 341,745 rakyat participating in both programmes with an estimated total income and revenue of RM544mn.
We are also pleased to note that digital inclusivity has also been extended to a new flagship initiative called eLadang, encouraging farmers to leverage the latest smart farming technologies, such as Internet-of-Things (IoT) and Big Data Analytics (BDA), to improve yield and profits.
Talent Development for the Future of Work
A total of RM250mn has been allocated for future education of the National Transformation 2050 (TN50) generation, which will be used to develop Science, Technology, Engineering and Mathematics (STEM) centres and improve Computer Science modules. From the RM250mn, RM190mn is allocated for two thousand classes to be transformed into Smart Classrooms for 21st Century learning to increase creative and innovative learning.
MDEC is pleased with this allocation as this would ensure Malaysia’s students have exposure to the #mydigitalmaker education initiative that aims to transform the youth community from being users of digital innovation to producers and digital innovators. This includes skills such as coding, app development, robotics, embedded programming and creative technology; all of which will ultimately help to strengthen problem-solving and creativity amongst our future generation.
Nurturing Malaysia’s startup ecosystem
It was also announced that the Malaysian Government will assist startups by introducing a slew of initiatives to encourage venture capital activities. The Prime Minister announced that investors from major institutions will allocate RM1 billion (bn) for venture capital investments in selected sectors.
These initiatives include income tax exemption being widened to include management fees and performance fees, as well as a reduction in minimum investment limit in a venture company from 70% to 50%, starting 2018 to 2022. Companies or individuals investing in venture capital companies will be given a tax deduction equivalent to the amount of their investments, which will be limited to a maximum of RM20 million ringgit per year.
This is a visionary stance by the Malaysian government as the start-up ecosystem is the job creators of the future.
Fortifying the Fourth Industrial Revolution and Digital Economy
The Malaysian g vernment would also be providing grants worth RM245mn under the Domestic Investment Strategic Fund to upgrade Smart Manufacturing services. This move is aimed at supporting investment and business activities under the Industrial Revolution 4.0.
In addition, the Futurise Centre in Cyberjaya will be upgraded as a one-stop centre for corporate companies and universities to develop product prototypes as well as to boost innovation. The government will also extend incentive periods for Fast Capital Allowance by 200% on automation appliances for assessment year of 2018 until 2020, while incentives for the manufacturing and services sector for Fast Capital Allowance by 200 per cent will also be given.
For information communication technology appliances, capital allowances can be claimed from assessment year of 2018 until 2020. These moves stem from the reality today that, in a hyper-connected world, it is becoming abundantly clear that artificial intelligence (AI) is the defining force of the Fourth Industrial Revolution.
AI is the natural progression from data analytics. Therefore, Malaysia should start looking at developing a National AI Framework. This will then be an expansion of the National BDA (Big Data Analytics) Framework.
Digital Free Trade Zone (DFTZ)
DFTZ is proving to be a massive game changer for Malaysia which will see Malaysia’s SMEs doubling exports, and establish Malaysia as a regional trans-shipment hub for e-commerce logistics while creating 60,000 jobs by 2025.
I am happy to say that the DFTZ will ‘go live’ on 3 November and 1,900 export-ready SMEs will be flagged off to begin their export journey. This is an encouraging number of SMEs as our previous target was 1,500 SMEs.
For the first time, the world will see physical and virtual zones with additional online and digital services to facilitate cross border eCommerce and invigorate internet based-innovation.
Malaysia Budget 2018 Commentary by Shareen Shariza Dato’ Abdul Ghani, CEO Of Talent Corporation Malaysia Berhad (TalentCorp)
TalentCorp welcomes the government’s announcement for Budget 2018, which puts special emphasis on human capital development, particularly women, and its plans toward nation building. We remain focused in developing Malaysia’s talent landscape through attracting, nurturing and retaining skilled talent in the country.
First of all, we laud the announcement to introduce the National Leaders’ Circle programme to be spearheaded by TalentCorp. Malaysia is not short of leadership talent, it is short of people in leadership roles. However, through the National Leaders’ Circle programme, we will work with Government-Linked Companies (GLCs) and Government-Linked Investment Companies (GLICs) to develop future leaders and facilitate sharing of best practices and knowledge transfer within the companies to solve national-level issues.
The National Leaders’ Circle will enhance the nurturing and retention of Malaysia’s top talent to drive national economic growth for the country by 2050.
We also support the announcement that 2018 is the year of Women Empowerment, as part of the government’s effort to enhance the contribution of women in the workforce. The announcement of individual income tax exemption on income earned within 12 months for women’s re-entry into the workforce is in line with TalentCorp’s Career Comeback Programme.
This will be a strong contributor to the nation’s Female Labour Force Participation Rate (FLFPR) target of 59% by 2020. In addition, the mandatory maternity leave for private sector to be increased from 60 to 90 days bodes well for the flexible work arrangements (FWAs) and Diversity and Inclusion agenda advocated by TalentCorp.
We are pleased to see that more is done to increase FWAs, flexible benefits, childcare centre in main offices and ease of working hours for pregnant women for GLC employees. Benefits of FWAs include:
- Work-life integration, where employees can balance professional and personal commitments.
- Provide support to parents working at home.
- Motivate employees to work to their fullest capability.
- Retain valuable employees; reduce tardiness and absenteeism, while keeping costs managed.
There are already more than 60 companies in Malaysia that have implemented FWAs since TalentCorp launched its FWAs efforts. We will continue working closely with employers on offering FWAs as a key strategy to attract and retain talent in the workforce. We are positive that Budget 2018 is a progressive undertaking that will help in TalentCorp’s efforts to prepare the nation for the future of work.