Pakatan Rakyat Budget 2014-EnG

PAKATAN RAKYAT
2014
BUDGET

Al-Baqarah, 188:

And do not eat up your property among yourselves for vanities,
nor use it as bait for the judges, with intent that ye may eat up wrongfully and
knowingly a little of (other) people's property.
[Tafsir Abdullah Yusuf Ali]

akaLan 8akyaL 8udgeL 2014
1

1ab|e of Contents
SAILGUAkDING 1nL LCLL'S IN1LkLS1S 8LICkL 1nL LCCMING S1CkM 3
1nkUS1 I: CCNSCLIDA1ING IISCAL CSI1ICN AND LNnANCING U8LIC IINANCLS 7
5ectloo 1. 5peoJloq fflcleocy ooJ kotlooollsotloo 8
5ectloo 2. xomples of cost-cootolomeot ooJ 5ovloqs loltlotlves 9
5ectloo J. 1lme ls Not klqbt to lottoJoce CooJs ooJ 5etvlces 1ox (C51) 11
5ectloo 4. Mote poltoble keveooe Ceoetotloo Mecboolsms 12
5ectloo 5. 1okloq Actloo oo tbe AoJltot Ceoetol's kepott 1J
1nkUS1 II: LNnANCING 1nL WLLL-8LING CI 1nL LCLL AND 1nLIk UALI1 CI LIIL - 1nL
AGLNDA CI A CAkING NA1ICN 1S
5ectloo 1. AJJtessloq tbe nlqb cost of llvloq 15
Sub-SecLlon 1.1: lood rlces 13
Sub-SecLlon 1.2: Pouse rlces 16
Sub-SecLlon 1.3: CosLs of LducaLlon 17
Sub-SecLlon 1.4: PealLhcare and harmaceuLlcal CosLs 18
Sub-SecLlon 1.3: uLlllLy 1arlffs 18
5ectloo 2. kolsloq Mlolmom noosebolJ locome to kM4,000 19
5ectloo J. keJefloltloo of tbe lovetty lloe locome ooJ kevlew of welfote 8eoeflts fot tbe
loot, tbe MotqloollseJ, ooJ tbe uoJetptlvlleqeJ 19
Sub-SecLlon 3.1: More 8eallsLlc overLy Llne lncome 19
Sub-SecLlon 3.2: lmprovlng Welfare 8eneflLs and Soclal SafeLy neL 20
Sub-SecLlon 3.2.1: AdopLlon of mykaslh SysLem 20
Sub-SecLlon 3.2.2: LsLabllshmenL of Lhe 8ural lnsurance Scheme 21
Sub-SecLlon 3.2.3: 8evlew of Lhe 1Malaysla 8eLlremenL Savlngs Scheme 21
Sub-SecLlon 3.2.4: LxLenslon of SCCSC Coverage 22
Sub-SecLlon 3.2.3: SLrengLhenlng 8eneflLs for Lhe ulfferenLly-Abled eople 22
Sub-SecLlon 3.2.6: SLrengLhenlng 8eneflLs for Senlor ClLlzens 23
5ectloo 4. NotloowlJe ltoqtomme of ltovlJloq AffotJoble Ooollty nomes lo tbe low-cost
ooJ MeJlom-cost coteqotles 2J
5ectloo 5. llqbt Aqolost ctlme 24
5ectloo 6. 1ocklloq 1tofflc cooqestloo 25
5ectloo 7. AJJtessloq lssoes of noosebolJ loJebteJoess ooJ 8ooktoptcy 25
5ectloo 8. wlJeoloq of locome 1ox 8tockets 26
1nkUS1 III: LNSUkING A MCkL 8ALANCLD, INCLUSIVL AND SUS1AINA8LL LCCNCMIC
DLVLLCMLN1 28
5ectloo 1. oboocloq coooectlvlty to Nottow tbe kotol-utboo ooJ keqloool ulvlJes 28
Sub-SecLlon 1.1: an-8orneo Plghway 28
Sub-SecLlon 1.2: Affordable lnLerneL Access 28
5ectloo 2. locteosloq womeos lottlclpotloo lo ooJ coottlbotloo to tbe cooomy 29
Sub-SecLlon 2.1: Malayslan Women's ConLrlbuLlon lund 29
Sub-SecLlon 2.2: More Women Leaders" ollcy 30
5ectloo J. kevlew of tbe cobotoqe lollcy fot 5obob ooJ 5otowok J0
5ectloo 4. 5tteoqtbeoloq Notloool lollcles fot utllltles, Jocotloo, neoltbcote, looJ ooJ
ovltoomeot J0
Sub-SecLlon 4.1: lmprovlng AccesslblllLy Lo uLlllLles and LducaLlon ln Lhe lnLerlor of
2
Sabah and Sarawak, and Some arLs of enlnsular Malaysla 30
Sub-SecLlon 4.1.1: 1owards 100 LlecLrlclLy and WaLer Coverage 30
Sub-SecLlon 4.1.2: lmprovlng Access Lo LducaLlon ln 8ural Malaysla and amongsL
MlnorlLy 8umlpuLeras 31
Sub-SecLlon 4.2: 8evlew of naLlonal LducaLlon ollcles 31
Sub-SecLlon 4.3: revenLlon of non-Communlcable ulseases 32
Sub-SecLlon 4.4: Suhakam's lndlgenous Land 8ecommendaLlons 33
5ectloo 4.5. lollcles oo ovltoomeot J4
1nkUS1 IV: UNLLASnING MALASIA'S 1kUL C1LN1IAL AND LNnANCING I1S LCNG-1LkM
CCML1I1IVLNLSS 3S
5ectloo 1. ltomotloq looovotloo, cteotlvlty, voloe cteotloo ooJ ottepteoeotsblp J5
5ectloo 2. 5oppottloq 5Ms os tbe 8ockbooe of tbe cooomy J6
5ectloo J. uolockloq tbe loteotlol of ootb - AJJtessloq ootb uoemploymeot J7

3

SAILGUAkDING 1nL LCLL'S IN1LkLS1S 8LICkL 1nL
LCCMING S1CkM

GD, CI & Ck 2009 2010 2011 2012 2013 k 2014 k
kea| GD Growth () -1.3 7.4 3.1 3.6 4.7 3.2
Average CI Growth () 0.6 1.7 3.2 1.6 2.0 - 2.3 2.3 -3.3
ear-Lnd Ck Leve|s () 2.00 2.73 3.00 3.00 3.00 3.23

ILDLkAL GCVLkNMLN1
IINANCL
2010 2011 2012 2013 L 2014 k
kevenue (kM bn) 139.633 183.419 207.913 218.309 226.724
Cperat|ng Lxpend|ture (kM bn) 131.633 182.394 203.337 216.931 214.384
CurrenL Surplus/ueflclL (8M bn) 8.02 2.823 2.376 1.37761 12.14
Gross Deve|opment
Lxpend|ture (kM bn)
32.792 46.416 46.932 47.730 47.633
Loan 8ecovery (8M bn) 1.496 1.082 2.606 1.024 1.231
Net Deve|opment Lxpend|ture
(kM bn)
31.296 43.334 44.326 46.726 46.384
1oLal LxpendlLure (8M bn) 204.423 229.010 237.024 264.681 262.219
Cvera|| Def|c|t]Surp|us (kM bn) -43.276 -42.309 -41.930 -43.348 -34.244
ercentage of GD () -3.4 -4.8 -4.3 -4.6 -3.2

noLwlLhsLandlng lncreased markeL volaLlllLy and publlc anxleLy over Lhe posslble
wlnd-down of moneLary sLlmulus measures by ma[or cenLral banks worldwlde slnce
lederal 8eserve Chalrman 8en 8ernanke's 22 May 2013 congresslonal LesLlmony,
hlnLlng aL a Laperlng" of Lhe uS's quanLlLaLlve easlng or scale-back of lLs monLhly
uS$83 bllllon bond purchase programme, and a revlew of lLs quasl-zero shorL-Lerm
lnLeresL raLes, Lhe speed of global recovery seems Lo have slackened ln recenL
monLhs, ln parLlcular ln emerglng economles desplLe some lmprovemenL ln ma[or
advanced economles.
1hls has led Lo a gloomler global ouLlook for Lhls year as evldenced by recenL
downgrades ln global Cu growLh forecasLs for 2013 by Lhe CLCu (Lo 3.1 from
3.4), lMl (Lo 2.9 from 3.2) and World 8ank (2.2 from 2.3) vs. 3.2 ln 2012.
Powever, all Lhree mulLllaLeral organlsaLlons foresee much rosler prospecLs for Lhe
global economy nexL year of 4.0 (CLCu), 3.6 (lMl) and 3.0 (World 8ank)
compared Lo 2013, alLhough Lhe dlvergence ln pace and progress beLween counLrles
and reglons remalns.
lndeed, we are currenLly wlLnesslng a mulLlple-speed recovery across Lhe globe and
4
changlng global growLh dynamlcs wlLh an encouraglng pace of growLh ln developed
economles buL loss of momenLum ln emerglng economles:
relaLlvely sub-par recovery ln Lhe uS (+2.3 ?o? ln Lhe 2C2013) due Lo
ongolng flscal consolldaLlon, buL wlLh a rosler ouLlook ln 2014, drlven by
prlvaLe secLor demand Lhanks Lo Lhe houslng markeL upLurn and rlslng
household wealLh whlle Lhe parLlal governmenL shuLdown LhaL began on 1
CcLober 2013, lLs flrsL ln 17 years, was shorL-llved and Lhe debL celllng
deadllne was exLended Lo lebruary 2014,
LenLaLlve pullouL from lLs longesL recesslon ln hlsLory as soverelgn debL
lssues and flnanclal condlLlons sLablllse ln Lhe Luro zone glven slgns of a
Lurnlng polnL ln core Luro counLrles alLhough conLlnued dampenlng effecLs
of ausLerlLy measures and hlgh unemploymenL remaln a drag on perlpheral
Luro naLlons,
dlsappolnLlng economlc performance for Lhe world's 2
nd
largesL economy,
Chlna durlng Lhe flrsL Lhree quarLers of 2013 wlLh Cu growLh averaglng aL
7.7 ?o?, on Lrack Lo achleve Lhe full-year LargeL of 7.3, lLs worsL ln 23 years
due Lo economlc rebalanclng Lowards a consumpLlon-based model away
from an lnvesLmenL blnge and eluslve recovery ln Asla's 3
rd
largesL economy,
lndla,
Abenomlcs" or Lhe comblned pollcy package of flscal sLlmulus and
moneLary easlng, has led Lo more upbeaL prospecLs for !apan, whlch could
be deralled by Lhe blg hlke ln Lhe value Added 1ax (vA1) Lo 8 from 3
sLarLlng from Aprll 2014, and Lhe expecLed unwlndlng of flscal spendlng and
reconsLrucLlon acLlvlLles,
slgns of ad[usLmenL faLlgue ln oLher global englnes of growLh mosLly due Lo
sLagnaLlon rlsks for some developed economles or belng sLuck ln Lhe
"mlddle-lncome Lrap" for some emerglng economles.
Movlng forward, as LhreaLs from soverelgn debL woes ln Lurope and flscal
uncerLalnLles ln Lhe uS appear Lo have abaLed, Lhe ma[or downslde rlsks Lo Lhe
global economy ln Lhe near Lo medlum Lerm are:
(a) slde-effecLs of Lhe move by cenLral banks worldwlde parLlcularly ln developed
economles as Lhey pull Lhe plug on masslve quanLlLaLlve easlng schemes and
oLher easy moneLary easlng programmes, a challenge especlally for counLrles
wlLh hlgh publlc debLs and hence hlgher debL servlclng cosLs,
(b) dlmlnlshlng role of domesLlc demand as ma[or source of sLrengLh for many
emerglng economles, whlch could prove Lo be vulnerable Lo any sudden
moneLary pollcy LlghLenlng or reversal ln forelgn caplLal flows glven mounLlng
household debLs ln many Aslan counLrles,
3
(c) Lwln deflclLs, l.e. budgeLary and currenL accounL shorLfalls (due Lo sagglng
global demand for goods and servlces ranglng from commodlLles Lo
manufacLured goods whlle lmporLs conLlnue Lo surge Lhanks Lo robusL
domesLlc demand, buoyed by easy credlL and lax flscal pollcy), or aL leasL
deLerloraLlng flscal deflclLs and Lrade balances as well as worsenlng Lwln
peaks, l.e. publlc and household debLs across Asla,
(d) a shlfL Lo lower growLh paLh or a "new normal" for Lhe global economy ln
parLlcular ma[or lmporL absorbers such as Chlna as well as oLher Aslan and
88lC economles, alLhough we are noL yeL able Lo ascerLaln wheLher lL ls due
Lo: l) shorL Lo medlum Lerm sLrucLural weaknesses as posL-global 2008-2009
crlsls ad[usLmenLs Lake effecL longer Lhan usual due Lo sLrucLural reforms and
economlc rebalanclng modes underLaken ln many large developlng
economles, or ll) wheLher lL polnLs Lo a perslsLenL Lrend.
1he long-run lmpacL of aggresslve and premaLure moneLary LlghLenlng worldwlde,
boLh ln advanced and emerglng economles, could be damaglng Lo Lhe recovery
process ln emerglng economles due Lo Lhe rlse ln long-Lerm lnLeresL raLes and Lhelr
repercusslons on Lhe cosL of caplLal, penallslng lnvesLmenL acLlvlLles and evenLually
lowerlng overall economlc growLh Lhan Lhe raLher shorL-Lerm effecLs from
excesslvely hlgher volaLlllLy ln forelgn exchange, sLock, bond and money markeLs on
caplLal flows, prlce and flnanclal secLor sLablllLy.
Accordlng Lo Lhe World 8ank's laLesL esLlmaLes, longer-Lerm poLenLlal ouLpuL could
be knocked off by 7-12 ln emerglng economles wlLhouL effecLlve mlLlgaLlng
measures as a resulL of abrupL and preclplLous exlLs from ulLra-loose moneLary pollcy
ln developed economles. Cf laLe, we have wlLnessed a serles of markeL rouLs and
sell-downs as lnvesLors are poslLlonlng Lhemselves for a posL-super easy money era
by selllng ouL rlskler asseLs especlally ln emerglng markeLs ln favour of developed
markeL asseLs whlch appear a beLLer and safer beL.
AfLer a dlsmal performance of [usL a 4.2 ?o? raLe on average ln Lhe flrsL half of
2013 and ln vlew of a recenL array of slugglsh leadlng lndlcaLors, akaLan 8akyaL has
Lrlmmed lLs full-year Cu growLh forecasLs for Malaysla ln 2013 Lo 4.7 on Lhe
premlse of a sLronger showlng of 3.0-3.3 ln Lhe 2P2013 as a resulL of Lhe
pro[ecLed global recovery. lndeed, Lhe mosL recenL offlclal Cu growLh forecasL for
2013 has been revlsed downward Lo beLween 4.3 and 3, much ln sync wlLh Lhe
markeL consensus.
Powever, should more wldespread and deflnlLlve global recovery noL maLerlallse,
Lhe currenL exporL slump wlll conLlnue Lo puL pressures on Malaysla's manufacLurlng
acLlvlLles unLll year-end, dragglng Lhe overall Cu growLh Lo an even slower pace and
pushlng Lhe concluslve rebound for Lhe Malayslan economy Lo Lhe 2C2014,
noLwlLhsLandlng commendable conLlnuous supporL from domesLlc demand, ln
parLlcular caplLal and consumer spendlng, from boLh prlvaLe and Lo a lesser exLenL
publlc secLors. lor now, akaLan 8akyaL foresees Lhe Malayslan economy growlng aL
6
a pace of 3.2 ln 2014.

LxpecLaLlons of furLher subsldy cuLs, lncreases ln sln Laxes" or exclse duLles on
Lobacco and alcohol producLs, and lnLroducLlon of Lhe Coods & Servlces 1ax (CS1) as
parL of Lhe flscal consolldaLlon programme Lo prevenL a poLenLlal effecLlve
downgrade Lo Malaysla's soverelgn credlL raLlng followlng Lhe revlslon ln ouLlook Lo
negaLlve from sLable by llLch 8aLlngs ln laLe !uly 2013, as well as Lo meeL lLs
self-lmposed publlc debL celllng aL 33 and deflclL reducLlon LargeL of 3 Lo Lhe Cu
by 2013, could exerL upward pressures on lnflaLlon movlng forward. 1he conLlnuous
sllde ln Malaysla's currenL accounL surplus, narrowlng Lo only 8M2.33 bllllon ln Lhe
2C2013 vs. Lhe quarLerly average of 8M23.93 bllllon beLween 2003 and 2012,
lncreases Lhe llkellhood of Lhe Lwln deflclL headache for Malaysla ln Lhe
noL-Loo-dlsLanL fuLure.

Clven Lhls backdrop, akaLan 8akyaL ls pleased Lo announce lLs verslon of 8udgeL
2014 wlLh Lhe Lheme of Safeguardlng 1he eople's lnLeresLs 8efore 1he Loomlng
SLorm."

1he AlLernaLlve 8udgeL 2014 comprlses four ma[or LhrusLs, namely:

(a) ConsolldaLlng flscal poslLlon and enhanclng publlc flnances,
(b) Lnhanclng Lhe well-belng of Lhe rakyaL and Lhelr quallLy of llfe - Lhe agenda
of a carlng naLlon,
(c) Lnsurlng a more balanced, lncluslve and susLalnable economlc developmenL,
and,
(d) unleashlng Malaysla's Lrue poLenLlal and enhanclng lLs long-Lerm
compeLlLlveness.

7

1nkUS1 I: CCNSCLIDA1ING IISCAL CSI1ICN AND
LNnANCING U8LIC IINANCLS

akaLan 8akyaL acknowledges LhaL Lhe susLalnablllLy of Malaysla's soverelgn credlL
proflle and Lhe exLenL of lLs flscal flrepower ln Lhe near-Lo-medlum Lerm are under
Lremendous pressure ln vlew of Lhe perennlal budgeL deflclLs slnce 1998 and
balloonlng federal governmenL debL amounL slnce 2009 due Lo Lhe followlng facLors:
(a) llmlLed dlverslflcaLlon of Lhe revenue base, alLhough only abouL:
o 1.8 mllllon people pay personal lncome Lax, equlvalenL Lo only 28 of Lhe
LoLal 6.4 mllllon reglsLered lndlvldual Laxpayers or 14 of Lhe overall
workforce of 13 mllllon,
o 107,043 companles pay corporaLe lncome Lax ouL of 308,130 reglsLered
Laxpaylng companles,
(b) over-dependence on oll and gas whlch accounLs for 33-40 of LoLal
revenue,
(c) wasLages and leakages ln governmenL expendlLure (a small sample can be
found ln Lhe Annual AudlLor Ceneral's 8eporL), esLlmaLed Lo amounL Lo 8M28
bllllon and 8M40 bllllon a year accordlng Lo varlous esLlmaLes reflecLlng
varlous reasons such as:
o overpaymenLs or overprlclng of goods and servlces supplled by vendors
versus markeL prlces,
o non-compllance wlLh Lhe orlglnal ob[ecLlves or sLandard operaLlng
procedures (SCs) or speclflcaLlons or Lerms and condlLlons,
o laLe dellvery wlLh cosL overruns or even abandonmenL of pro[ecLs as a
resulL of Lhe lack of experlence or experLlse of conLracLors (chosen
because of know-who and noL because of know-how),
o servlce dellvery efflclency such as fallure Lo collecL Laxes or duLles, parLlal
collecLlon or LoLal non-collecLlon of flnes, llquldaLed and ascerLalned
damages and oLher forms of compensaLlon,
o elemenLs of corrupL pracLlces such as award of conLracLs Lo pollLlcally
connecLed conLracLors or cronles alLhough Lhe pro[ecLs/programmes
have no parLlcular beneflLs for Lhe people, and,
o oLher admlnlsLraLlve weaknesses,
(d) ever lncreaslng subsldy bllls and overly generous pre-elecLlon governmenL
handouLs,
(e) overshooLlng or even recklessness ln governmenL spendlng as evldenced by
Lhe conslsLenL requesLs by Lhe federal governmenL for supplemenLary
allocaLlons or 'perbekalan Lambahan' mld-way Lhrough Lhe year whlch derall
budgeL deflclL reducLlon LargeLs,
(f) oLher sLrucLural weaknesses ln Malaysla's publlc flnances.

lndeed, slnce 1970, Malaysla has en[oyed only flve sLralghL years of budgeL surplus
beLween 1993 and 1997 (whlch recorded Lhe blggesL surplus of 8M6.6 bllllon), buL
8
suffered Lhe worsL deflclL ln 2009 ln Lerms of amounL (-8M47.4 bllllon) and as a
percenLage of Cu (-6.7). 1he federal governmenL debL-Lo-Cu raLlo also
worsened from [usL 39.8 ln 2007 Lo 31.1 ln 2009 and 33.3 by end-2012, among
Lhe hlghesL ln Lhe reglon compared Lo 31.3 ln Lhe hlllpplnes, 44.3 ln 1halland
and 23 ln lndonesla. 1aklng lnLo accounL exlsLlng conLlngenL llablllLles, esLlmaLed Lo
be worLh 8M147 bllllon aL presenL, Lhe publlc debL-Lo-Cu could easlly hlL 70 by
end-2013.

lollowlng warnlngs lssued by llLch 8aLlngs and SLandard & oor's of a posslble credlL
raLlngs downgrade ln laLe AugusL 2012 and early SepLember 2012 respecLlvely, as
well as Lhe revlslon Lo Malaysla's soverelgn credlL raLlng ouLlook Lo negaLlve from
sLable by llLch 8aLlngs ln laLe !uly 2013, does Malaysla run a hlgh rlsk of an effecLlve
downgrade Lo lLs soverelgn credlL raLlngs ln Lhe near-Lo-medlum Lerm and wheLher lL
ls one of Lhe ma[or macroeconomlc dangers?

1hls AlLernaLlve 8udgeL 2014 ls akaLan 8akyaL's aLLempL Lo lnLroduce real flscal
reforms or more coherenL and counLercycllcal flscal sLraLegles ln order Lo:
(a) meeL Lhe self-lmposed mld-Lerm LargeLs of 3 for Lhe budgeL deflclL-Lo-Cu raLlo
by 2013 and malnLaln Lhe publlc debL-Lo-Cu raLlo below Lhe sLaLuLory debL celllng
of 33 (whlch was lncreased from 43 ln !uly 2009 and from 40 ln Aprll 2008 Lo
accommodaLe Lhe masslve sLlmulus package ln response Lo Lhe 2008/2009 global
flnanclal crlsls and recesslon), and,
(b) achleve a balanced federal governmenL budgeL l.e. a budgeL surplus wlLhln Lhe
flrsL Lerm ln power aL Lhe federal level lf glven Lhe mandaLe.

akaLan 8akyaL's flscal reforms hlnge on maklng Lhe LaxaLlon sysLem more
progresslve, or aL leasL less regresslve, more slmpllfled and more accounLable wlLh
Lhe posslblllLy of lnLroduclng Lax cholce as well as puLLlng ln place respecL for
lnLenLlon, prlnclples and mechanlsms of flscal recLlLude. lf akaLan 8akyaL's
programme of flscal dlsclpllne on how Lo plug Lhe gap ls followed rellglously from
2014 onwards, Malaysla should be able Lo achleve a balanced budgeL or even eke
ouL a small surplus by 2018 aL Lhe laLesL. 1hls should help Malaysla:
(a) break Lhe vlclous cycle of mounLlng publlc debL ln excess of 8M300 bllllon
and Lhe ever growlng annual debL servlce charges of approxlmaLely 8M20
bllllon aL presenL or abouL 10 of annual operaLlng expendlLure,
(b) preserve economlc reslllence ln Lhe medlum-Lo-long Lerm ln Lhe face of a
very challenglng global economlc and flnanclal envlronmenL,
(c) move away from a borrowed growLh model" wlLh a rlslng share of Lhe
governmenL spendlng-led economlc acLlvlLles.

Sect|on 1: Spend|ng Lff|c|ency and kat|ona||sat|on

ldeally, akaLan 8akyaL holds Lhe vlew LhaL Lhe gap beLween Lhe operaLlng and gross
developmenL expendlLure ln Lerms of share ouL of LoLal expendlLure should be
narrowed and changed Lo 60:40, compared Lo abouL 80:20 aL presenL. 1o reduce
federal governmenL's expendlLure, especlally operaLlng expendlLure, akaLan 8akyaL
9
proposes:
(a) broad cosL raLlonallsaLlon programmes aL all mlnlsLrles and governmenL
deparLmenLs/agencles Lo achleve an across-Lhe-board 10 cuL Lo annual
operaLlng expendlLure by:
o Lemporarlly freezlng payrlse and raLlonallslng allowances for federal
governmenL cablneL mlnlsLers and Lop-echelon offlcers,
o revlewlng Lhe governmenL expendlLure pollcy, especlally regardlng
procuremenL such as award of governmenL conLracLs Lo an open Lender
sysLem, and sLrlngenL cosL conLrols, among oLhers, Lo mlnlmlse wasLages
and leakages as supplles and servlces remaln Lhe 3
rd
largesL componenL
of operaLlng expendlLure slnce 2011,
o underLaklng a sLrlcLer conLrol of subsldy bllls, Lhe 2
nd
blggesL componenL
of operaLlng expendlLure Lowards a falrer and LargeLed subsldy reglme by
revlewlng corporaLe subsldles en[oyed by corporaLlons and lnLroduclng
effecLlve mechanlsms Lo prevenL abuse and smuggllng of subsldlsed
lLems ln parLlcular dlesel, peLrol, sugar and flour uslng Lhe proposed
eeLrol SysLems' cashless paymenL sysLem for lnsLance,
(b) prlorlLlslng all Lypes of expendlLure Lo exLracL savlngs such as defermenL,
cuLback ln or even ellmlnaLlon (Lemporarlly or permanenLly) of
non-producLlve publlc caplLal expendlLure and oLher unnecessary expenses:
o suspenslon or moraLorlum for aL leasL a year Lo Lhe naLlonal Servlce,
whlch cosLs Lhe federal governmenL much hlgher Lhan Lhe annual budgeL
for Lhe ?ouLh and SporLs MlnlsLry and resulLed ln 22 deaLhs over Lhe pasL
decade due Lo haphazard plannlng and execuLlon, Lo enable rechannellng
of publlc funds Lo more urgenL needs and Lo allow a arllamenLary SelecL
CommlLLee Lo reassess Lhe long-Lerm vlablllLy of Lhe programme and
reporL lLs flndlngs wlLhln a slx-monLh perlod,
o revlew all dlrecL Lransfer paymenL programmes ln parLlcular 881M ln
order Lo LlghLen Lhe ellglblllLy crlLerla Lo beneflclarles glven Lhe gap
beLween sLaLlsLlcs from Lhe Pousehold lncome Survey 2012 of 2.633
mllllon ellglble beneflclarles and Lhe acLual number of 4.3 mllllon
reclplenLs,
o defermenL of pro[ecLs wlLh hlgh lmporL conLenL and low mulLlpller
effecLs,
(c) lnLroducLlon of oLher cosL-conLalnmenL lnlLlaLlves.

Sect|on 2: Lxamp|es of Cost-Conta|nment and Sav|ngs In|t|at|ves

8ased on Lhe AudlLor Ceneral's 8eporL for 2012, lL ls esLlmaLed LhaL cosL savlngs
worLh up Lo 8M6.3 bllllon can be obLalned by geLLlng rld of falled programmes,
reduclng wasLage and plugglng leakages of whlch 8M3.7 bllllon lnvolve mlnlsLrles
and deparLmenLs of Lhe federal governmenL whlle Lhe remalnlng 8M0.8 bllllon are
from sLaLuLory bodles. Powever, lL musL be emphaslsed LhaL Lhls esLlmaLed amounL
of cosL savlngs was arrlved aL by analyslng only pro[ecLs and lnlLlaLlves ldenLlfled by
Lhe AudlLor Ceneral's 8eporL for 2012. As such, Lhe annual AudlLor Ceneral's 8eporL
could be only Lhe Llp of Lhe lceberg as lL merely reflecLs a small sample or snapshoL
10
plcLure of wasLages and leakages ln publlc flnances, l.e. more could be hldden
underneaLh.

(a) Defence rocurement

AfLer dropplng furLher Lo 'L' (very hlgh rlsk), effecLlvely placlng Malaysla ln Lhe same
league as counLrles such as Chlna, AfghanlsLan, 8angladesh , Zlmbabwe ln Lhe
uefence AnLl-CorrupLlon lndex from 'u' ln !anuary 2013, Malaysla ls deemed as
havlng a very hlgh rlsk of corrupLlon ln lLs defence spendlng and operaLlons.

ln vlew of Lhe huge budgeL allocaLlon for defence and securlLy, worLh 8M23 bllllon
under Lhe 10
Lh
Malaysla lan, akaLan 8akyaL proposes Lhe esLabllshmenL of a
blparLlsan uefence AccounLs CommlLLee or a parllamenLary overslghL commlLLee Lo
look lnLo defence expendlLure. 1o daLe, Lhere ls no overslghL over defence purchases,
noL even ln Lhe blparLlsan ubllc AccounLs CommlLLee whlch oversees all oLher Lypes
of governmenL spendlng noL classlfled as offlclal secreLs.

akaLan 8akyaL relLeraLes LhaL Lhe procuremenL process lncludlng Lhe declslon
maklng commlLLees should conslsL of members of Lhe rullng coallLlon and opposlLlon
ln consulLaLlon wlLh clvlllan experL groups Lo avold poLenLlal corrupL pracLlces and
purchase of 'unnecessary' equlpmenL LhaL are noL sLraLeglc aL any polnL of Llme
especlally lf we Lake lnLo accounL Lhe llve ower uefense ArrangemenL (luA). lor
example, under Lhe luA, Lhe prospecL of a convenLlonal mlllLary aLLack on our
LerrlLory has dlmlnlshed whlch may noL warranL Lhe purchase of cerLaln new
equlpmenL for Lhe nexL Lhree Lo flve years and ln Lurn should save Lhe counLry
bllllons of rlngglL. 1hls savlng could oLherwlse be used for developmenL of ln-house
defense research and developmenL LhaL wlll help reduce our over-dependency on
forelgn mlllLary equlpmenL, anoLher poLenLlal savlngs ln Lhe long run.

AnoLher poLenLlal savlng ls by leveraglng on clvlllan defence experLs who can provlde
useful lnslghL lnLo Lhe laLesL defence Lechnology and equlpmenLs, maxlmlslng LacLlcal
sLraLegy and Lhe use of caplLal resources. All ln all, akaLan 8akyaL esLlmaLes a LoLal
savlng of close Lo 8M3.3 bllllon ln defence procuremenL.

(b) Improv|ng ua||ty and Accountab|||ty |n Government Contracts

(1) "L|qu|dated Ascerta|ned Damages" (LAD) System

akaLan 8akyaL wlll ensure LhaL Lhe LAu sysLem becomes regular pracLlce Lo ensure
parLles LhaL do noL fulflll Lhelr responslblllLles ln compleLlng a pro[ecL are made Lo
compensaLe Lhe governmenL for losses lncurred due Lo cosLs and Llme wasLed. lL wlll
ensure governmenL pro[ecL developers Lake greaLer responslblllLy and employ more
rlgorous plannlng so LhaL pro[ecLs are compleLed on Llme. 1hose found Lo be low
performlng wlll be flned an approprlaLe amounL and blackllsLed from parLaklng ln
fuLure pro[ecLs.

11
2) ua||tat|ve Assessment for Government ro[ects

akaLan 8akyaL wlll creaLe a CuallLaLlve AssessmenL sysLem LhaL assesses pro[ecLs
noL only from a quanLlLaLlve buL also quallLaLlve aspecL, whlch wlll be lncorporaLed
lnLo Lhe annual AudlLor Ceneral's 8eporL. 1hls glves a clearer and more
comprehenslve plcLure Lo Lhe rakyaL on noL [usL how many kllomeLers of road have
been compleLed, buL also Lhe quallLy of sald road.

Sect|on 3: 1|me |s Not k|ght to Introduce Goods and Serv|ces 1ax (GS1)

Whlle ln prlnclple CS1 could serve as an effecLlve revenue generaLlon mechanlsm,
provlde Lhe poLenLlal lmpeLus for enhancemenL Lo Lhe governmenL's servlce dellvery
and Lax admlnlsLraLlon sysLem, and acL as a caLalysL Lo greaLer falrness for all
buslnesses regardless Lhe lndusLry/secLor whlle curLalllng Lhe black economy" and
Lax evaslon, belng a carlng federal governmenL-ln-walLlng, akaLan 8akyaL Lakes Lhe
poslLlon noL Lo brush aslde Lhe concerns of Lhose opposlng Lhe CS1. We noLe:

(a) CS1 ls a regresslve Lax whereby as a proporLlon of lncome, Lax payable ls
hlgher for Lhe lower lncome group Lhan Lhe hlgher lncome group, l.e. Lhe
low-Lo-mlddle lncome groups wlll bear much hlgher Lax burden Lhan Lhe rlch
noLwlLhsLandlng Lhe posslblllLy of Laklng several remedlal sLeps Lo make CS1
a more progresslve or aL leasL a less regresslve Lax,

(b) 1he posslblllLy of abuse by Lhe federal governmenL as a shorL-cuL and an easy
way ouL Lo lncrease lLs revenue slnce ralslng CS1 raLes appears less obLruslve
Lhan a rlse ln lncome Lax raLes Lo Lhe polnL of lnfllcLlng huge burden on Lhe
rakyaL especlally Lhe low-Lo-mlddle lncome group,

(c) posslblllLy of Lhe CS1 becomlng Lhe ma[or source of lnflaLlon durlng Lhe flrsL
few years of lLs lnLroducLlon especlally ln Lhe Malayslan conLexL whereby
buslnesses may mlsuse Lhe CS1 as a [usLlflcaLlon Lo lndlscrlmlnaLely ralse
prlces, charges or Larlffs of Lhelr goods and servlces glven Lhe weakness of
enforcemenL of Lhe AnLl-roflLeerlng AcL, Lhe CompeLlLlon AcL or oLher acLs
whlch are supposed Lo proLecL consumers and lack of enforcemenL ln
general,

(d) uncerLalnLy wheLher:
o Lhe sales and servlce Lax (SS1) wlll be abollshed, l.e. wheLher CS1 wlll
genulnely be a replacemenL Lax for SS1 and avold double LaxaLlon, and,
o Lhe corporaLe and personal lncome Lax wlll be slmulLaneously reduced.

Llngerlng uncerLalnLy surroundlng Lhe fallure Lo replace Lhe SS1 and reduce Lhe
corporaLe and personal lncome Lax raLes upon CS1 lmplemenLaLlon may have
adverse lmpacL on aggregaLe demand. CS1 lmplemenLaLlon may also begln ln a
recesslon year slnce Lhe buslness cycle" seems Lo have shorLened ln recenL Llmes Lo
[usL seven from Len years prevlously. 1he lasL recesslon hlL Malaysla ln 2009, Lhus
12
Lhere ls a chance LhaL Lhe nexL recesslon may occur clrca 2016, wlLhln a year of
expecLed CS1 lmplemenLaLlon.

(e) fallure Lo comply wlLh cerLaln pre-requlslLes, mandaLory prlor Lo Lhe CS1
lmplemenLaLlon such as:
o mlnlmum naLlonal household lncome reachlng a level deemed necessary
and adequaLe Lo absorb shocks Lo Lhe people's purchaslng power as a
resulL of Lhe CS1 lmplemenLaLlon, ln parLlcular among low-Lo-mlddle
lncome earners,
o adequaLely wlde personal lncome Lax bands Lo prevenL Lhe
mlddle-lncome group from falllng lnLo Lhe hlgh Lop Lax brackeLs aL an
acceleraLed speed,
o exlsLence of a publlcly dlsclosed llsL of zero-raLed and exempLed goods
and servlces especlally for baslc necesslLy lLems.

Sect|on 4: More Lqu|tab|e kevenue Generat|on Mechan|sms

akaLan 8akyaL relLeraLes lLs commlLmenL Lo a progresslve LaxaLlon reglme from Lhe
perspecLlve of falrer sharlng of Lhe burden of flscal ad[usLmenL, Lo be borne more by
Lhe rlch and Lhe hlgh-lncome group. 1he prevalllng LaxaLlon sysLem appears dlverLlng
Lhe burden of LaxaLlon away from caplLal owners and hlgh-lncome earners wlLh
hlgher propenslLy of lnfllcLlng hardshlp on Lhe low-Lo-mlddle lncome group,
lncreaslng Lhe economlc dlsparlLy ln Lerms of lncome and wealLh beLween Lhe rlch
and Lhe poor. As such, lnsLead of lnLroduclng Lhe CS1, akaLan 8akyaL proposes
oLher lnlLlaLlves Lo dlverslfy Lhe federal governmenL's revenue base and broaden lLs
revenue sources parLlcularly Lhrough lndlrecL Laxes and non-Lax revenue.

(a) LsLabllshmenL of a commlsslon or a Laskforce on Lax reforms whlch wlll
revlew exlsLlng mechanlsms and recommend measures, afLer an exLenslve
consulLaLlve process wlLh all sLakeholders Lo sLrengLhen Lhe capaclLy of
Malaysla's Lax sysLem LhaL reflecLs lnLernaLlonal sLandards and besL pracLlces.
Among Lhe posslble areas of sLudy lnclude:
o broadenlng of Lhe Laxpayer base, boLh lndlvldual and corporaLe
Laxpayers and enhanclng Lax compllance, and,
o lnLroducLlon of a 8C1-llke caplLal galns Lax (CC1) on galns from Lhe
sale of flnanclal asseLs such as shares, bonds and oLher securlLles
alLhough Lhe sLudy ls llkely Lo begln wlLh Lhe cosL-beneflL analysls of
a CC1 reglme on neL galns arlslng from share Lradlng and oLher
relevanL deLalls such as conslderaLlon for a Llered raLe sLrucLure Lo
encourage long-Lerm lnvesLmenLs whlle dlssuadlng excesslve
speculaLlve elemenLs, puLLlng a mlnlmum Lhreshold so as noL Lo
dlssuade reLall parLlclpaLlon ln Lhe sLock markeL and underLaklng a
revlew of exlsLlng brokerage fees, clearlng fees and sLamp duLy.

(b) roperLy relaLed lndlrecL Laxes such as ad[usLmenLs ln 8C1 Lo pre-2007
levels (refer Lo 1hrusL ll),
13

(c) upward ad[usLmenLs Lo sLamp duLy raLes, currenLly beLween 1 and 3, Lo
3 for LransacLlons lnvolvlng hlgh-end properLles worLh aL leasL 8M2.3
mllllon and/or flnanclal asseLs (lf CC1 ls noL lnLroduced).

lL ls worLh noLlng LhaL Laxpayers seem Lo be dolng Lhelr besL Lo avold paylng Laxes
because of Lhelr unhapplness wlLh Lhe way Lhe governmenL spends publlc funds.
WlLh beLLer governance, accounLablllLy and Lransparency under a akaLan 8akyaL
governmenL, Malaysla should be able Lo lncrease lLs Lax collecLlon wlLhouL much
fuss.

Sect|on S: 1ak|ng Act|on on the Aud|tor Genera|'s keport

AlLhough Lhe Cfflce of Lhe AudlLor Ceneral of Lhe Malayslan lederaLlon was
esLabllshed slnce Merdeka Lo conducL audlL professlonally, ob[ecLlvely and
lndependenLly ln accordance wlLh leglslaLlon and enhance good governance of Lhe
publlc secLor lncludlng Lhe federal and sLaLe governmenLs, reglonal auLhorlLles,
lslamlc affalrs bodles, and sLaLe-owned enLerprlses (SCLs)/CLCs wlLh aL leasL 30
sLake whereby Lhe AudlLor Ceneral (AC) has Lhe obllgaLlon Lo reporL Lhe audlL resulLs
Lo Lhe arllamenL, Malaysla has yeL Lo opLlmlse Lhe AC's reporLlng process whlle
audlL correcLlve acLlons remaln relaLlvely opaque, vague and amblguous Lo Lhe
Malayslan publlc.
akaLan 8akyaL holds Lhe vlew LhaL a number of obvlous sLeps can be Laken Lo ensure
an adequaLe follow-up Lo Lhe reporL flndlngs and lmplemenLaLlon of recommended
measures Lo address any lssues or Lo close any gaps. Cne mechanlsm ls Lo ensure
LhaL Lhere ls sLrong purpose and drlve by Lhe Chlef SecreLary Lo Lhe CovernmenL
(keLua SeLlausaha negara, kSn) Lo Lhe respecLlve SecreLarles-Ceneral (keLua
SeLlausaha, kSus) aL Lhe federal mlnlsLry level Lo scruLlnlse and prepare an acLlon
plan Lo recLlfy leakages and wasLages.
1hls can be done aL Lhe annual meeLlng beLween Lhe kSn and kSus. 1he meeLlng
should esLabllsh a commlLLee or Lask force aL Lhe mlnlsLry level, headed by Lhe
respecLlve kSu, and LargeLs Lo remove procuremenL wasLages and leakages musL be
seL. 1he commlLLee's scope would lnclude ldenLlfylng and closlng Lhe gaps ln Lerms of
reduclng redundanL processes, lncreaslng efflclency of Lhe sysLem wlLh Lhe ouLcome
of closlng sysLemlc opporLunlLles for posslble leakages.
CovernmenL deparLmenLs should revlew Lhe levels of auLhorlLles, and re-deflne Lhe
level of empowermenL and responslblllLles aL Lhe varlous auLhorlLy levels. Culdellnes
or governance documenLs LhaL govern Lhe worklngs and processes for each mlnlsLry
musL be revlewed Lo lnclude Lhe lowesL level of auLhorlLy Lo ensure LhaL gaps are
effecLlvely addressed. 1he resulLs are Lhen measured agalnsL Lhe LargeLs seL earller.
1hese resulLs musL Lhen be presenLed ln arllamenL by Lhe respecLlve mlnlsLers who
are held accounLable for Lhe LargeLs, wlLh Lhe kSu responslble. 1he resulLs wlll Lhen
be dlsclosed Lo Lhe publlc for scruLlny.
14
AlLhough akaLan 8akyaL may have Lhe capaclLy Lo lmplemenL a slmllar mechanlsm
aL Lhe sLaLe level, Lhe onus ls on Lhe federal governmenL Lo lead by example glven Lhe
magnlLude, prevalence and frequency of wasLages and leakages aL Lhe federal level.
13
1nkUS1 II: LNnANCING 1nL WLLL-8LING CI 1nL LCLL AND
1nLIk UALI1 CI LIIL - 1nL AGLNDA CI A CAkING NA1ICN

Sect|on 1: Address|ng the n|gh Cost of L|v|ng

ln Lhe long run, akaLan 8akyaL's pollcy for addresslng escalaLlng cosLs of llvlng and
Lhe ablllLy of Lhe people, ln parLlcular Lhe low-lncome group, Lo Lackle Lhese rlslng
cosLs hlnges on Lhe Lwln plllars of:

(a) dlsmanLllng Lhe sysLem of llcenslng, quoLas, and renL-seekers whlch have
conLrlbuLed Lo keeplng cosLs of consumer goods and servlces, ln parLlcular
dally baslc necesslLles and bulldlng maLerlals, arLlflclally hlgh for
end-consumers whlle allowlng lnefflclenL manufacLurers and unscrupulous
Lraders Lo beneflL from lack of compeLlLlon, and,
(b) ensurlng LhaL wage and lncome growLh keeps pace noL only wlLh lnflaLlon buL
also meeLs Lhe ob[ecLlves of Malaysla aLLalnlng hlgh-lncome sLaLus and ralslng
mlnlmum household lncome Lo 8M4,000 by 2018.

As a general rule ln addresslng Lhe hlgh cosL of llvlng, akaLan 8akyaL calls for Lhe
enforcemenL of Lhe AnLl-CompeLlLlon and AnLl-roflLeerlng AcL Lo be LlghLened and
sLrengLhened whlle re-examlnlng Lhe currenL llsL of secLoral exempLlons ln boLh AcLs.
ln addlLlon, akaLan 8akyaL lnLends Lo lnLroduce an AnLl-Monopoly AcL Lo promoLe
compeLlLlon and llberallse non-core proLecLed lndusLrles or secLors.

Speclflcally, akaLan 8akyaL proposes Lhe followlng recommendaLlons Lo address Lhe
hlgh cosL of llvlng Lhrough measures Lo check rlslng prlces or cosLs of:
(a) foodsLuffs,
(b) houses,
(c) educaLlon,
(d) healLhcare or pharmaceuLlcal producLs, and,
(e) uLlllLles, ln parLlcular elecLrlclLy and waLer

Sub-Sect|on 1.1: Iood r|ces

1o check rlslng food prlces, akaLan 8akyaL recommends:
(a) lnLroducLlon of a more llberallsed reglme, ln parLlcular for rlce and sugar
lndusLrles,
(b) flne-Lunlng of Lhe prlce conLrol sysLem for all baslc food lLems,
(c) clampdown on abuse and smuggllng of subsldles on agrlculLural lnpuLs for
farmers and dlesel for flshermen, and,
(d) boosLlng Lhe lnLenslLy of enforcemenL of Lhe above AnLl-CompeLlLlon and
roflLeerlng AcLs, as well as Lhe lnLroducLlon of Lhe newly proposed
16
AnLl-Monopoly AcL parLlcularly durlng fesLlve seasons.

lor efflclenL and cosL-effecLlve proven producers of baslc foods, akaLan 8akyaL, as
parL of our naLlonal food securlLy pollcy, plans Lo underLake a feaslblllLy sLudy Lo
lnLroduce speclal lncenLlve schemes, such as maLchlng granLs, among oLhers.

Sub-Sect|on 1.2: nouse r|ces

akaLan 8akyaL recommends Lhe followlng "coollng" measures Lo conLaln splrallng
house prlces by curblng excesslve properLy speculaLlon acLlvlLy, ln Lhe shorL-Lerm
wlLh a focus on urban areas such as CreaLer kL, !ohor 8ahru and enang, Lo prevenL
Lhe overheaLed houslng markeL from ramplng up overall lnflaLlon LhaL may Lrlgger
sooner-Lhan-expecLed moneLary LlghLenlng:

(a) Ad[usLmenLs Lo Lhe 8eal roperLy Calns 1ax (8C1) on neL galns from Lhe sale
of resldenLlal properLles Lo pre-2007 levels as follows:
o Pouses dlsposed wlLhln 2 years afLer purchase: 30
o Pouses dlsposed beLween 2 and 3 years afLer purchase: 20
o Pouses dlsposed more Lhan 3 years afLer purchase: 0

(b) 1lghLer resLrlcLlons by 8ank negara Malaysla on Lhe amounL flnanclal
lnsLlLuLlons can lend ln morLgage flnanclngs by lncreaslng mlnlmum down
paymenL requlremenLs, or reduclng Lhe maxlmum loan-Lo-value (L1v) raLlo
for morLgage flnanclngs solely on new launches (Lo monlLor Lhe prlclng pollcy
of houslng developers whlle leavlng Lhe markeL for exlsLlng houses wlLh Lhe
L1v pollcy lnLroduced ln november 2010):
o 70 L1v raLlo for Lhe purchase of Lhe 2
nd
newly launched house
rd
Lh
Lh
newly launched house and
onwards

(c) 8esLrlcLlons by 8ank negara Malaysla ln Lhe form of a cap on Lhe share of
houslng relaLed debL and monLhly repaymenLs ouL of borrowers' LoLal debL
and lncome respecLlvely:
o home loans should noL exceed a borrower's LoLal debL-servlclng raLlo
of 60
o morLgage paymenLs should noL exceed 30 of a borrower's gross
monLhly lncome

1hese macroprudenLlal measures by 8ank negara Malaysla should help Lemper
loan growLh for properLy purchases and pare down Lhe bulld-up of sysLemlc rlsks
ln Lhe flnanclal sysLem, reduclng Lhe scope of huge lnLeresL raLe lncreases ln Lhe
near Lo medlum Lerm.
17

(d) Plgher Lhreshold or floor prlce allowable for forelgners Lo buy resldenLlal
properLles:
o 8M1 mllllon for aparLmenLs
o 8M3 mllllon for landed properLles

(e) SLrengLhenlng Lhe enforcemenL of affordable houslng quoLas for properLy
developers and lmposlng a mandaLory requlremenL LhaL affordable houslng
be locaLed wlLhln a 3 km radlus of Lhe boundarles of Lhe real esLaLe
developmenL area Lo:
o ensure LhaL real esLaLe developmenL pro[ecLs wlll conslsL of
adequaLely mlxed houslng (hlgh-end, medlum-cosL and low-cosL),
o prevenL Lhe emergence of gheLLoes and slums, and,
o lncrease Lhe supply of affordable quallLy homes closer Lo clLy cenLres.

ln Lhe medlum-Lo-long Lerm, sLrucLural reforms of Lhe houslng lndusLry as well as a
far-slghLed urban developmenL pollcy are requlred. 1hese lnclude: a decoupllng of
Lhe role of munlclpal and local auLhorlLles from belng boLh developers and regulaLors,
land pollcy speclflcally for affordable houslng, Lhe sLrengLhenlng of land zonlng
regulaLlons Lo prevenL land allocaLed for houslng from belng Lransformed lnLo
commerclal developmenL pro[ecLs, esLabllshmenL of a comprehenslve daLabase for
all houslng relaLed sLaLlsLlcs, and, Lhe revlew of Lhe role, responslblllLles and llmlLs of
all CLCs for properLy developmenL purposes.

Sub-Sect|on 1.3: Costs of Lducat|on

LducaLlon ls a rlghL for all. akaLan 8akyaL vlews educaLlon as an lmporLanL asseL for
Lhe developmenL of Lhe naLlon. As such, under akaLan 8akyaL, educaLlon wlll noL be
commodlLlsed. lree educaLlon from pre-school up Lo hlgher educaLlon for all clLlzens
ls a prlmary LhrusL Lo enhance Lhe rakyaL's parLlclpaLlon ln developlng Lhe economy.

ln Lerms of baslc educaLlon, akaLan 8akyaL proposes reflnlng Lhe pollcy of fundlng
allocaLlon for schools on a per-caplLa basls Lo be more reflecLlve of needs-based
parameLers slnce Lhe former perspecLlve ls blased Lowards schools wlLh larger
sLudenL populaLlons, Lyplcally locaLed ln urban areas. A needs-based fundlng
sLrucLure would ad[usL for facLors such as school locaLlon and quallLy
(rural/urban/dlsadvanLaged), represenLaLlve parenLal lncome, and famlly
background.

akaLan 8akyaL's commlLmenL Lowards free educaLlon (as per Lhe ManlfesLo akaLan
Parapan 8akyaL) remalns as follows:
(a) AddlLlonal allocaLlon Lo cover 10 of Lhe LoLal cosL ln publlc unlverslLles: 8M
600 mllllon,
(b) Annual 'Sara Pldup' llvlng allowance of 8M3,000 per sLudenL for 300,000
sLudenLs : 8M2.3 bllllon,
(c) lund for prlvaLe unlverslLles (fee subsldy and sLudenL loan) : 8M900 mllllon,
18
and,
(d) AbollLlon of 11n - 11n debL Lake-over (afLer 11n has been compleLely
abollshed) and lnsLallmenL paymenLs for 20 years : 8M 2.0 bllllon.

akaLan 8akyaL's proposed resLrucLurlng of Lhe 11n flnanclng scheme also calls for
a revlew of exlsLlng prlvaLe hlgher learnlng lnsLlLuLlons ln Lerms of quallLy and
performance. akaLan 8akyaL also proposes a sLudy lnLo Lhe vlablllLy of a
governmenL-supporLed flnanclng scheme where flnanclal lnsLlLuLlons lend dlrecLly Lo
sLudenLs ln prlvaLe hlgher learnlng lnsLlLuLlons.

Sub-Sect|on 1.4: nea|thcare and harmaceut|ca| Costs

1o ensure provlslon of affordable healLhcare Lo Lhe people, akaLan 8akyaL proposes
Lo gradually lncrease Lhe lederal governmenL's lnvolvemenL ln healLhcare Lhrough a
well deslgned dlvesLmenL sLraLegy for CLCs Lo exlL prlvaLe healLhcare whlle ralslng
publlc healLhcare expendlLure from 3.3 of Cu Lo 3 of Cu, Lhus meeLlng World
PealLh CrganlsaLlon (WPC) sLandards.

1he governmenL's heavy lnvolvemenL vla CLCs ln Lhe prlvaLe healLhcare secLor ls
creaLlng a confllcL of lnLeresL wlLh Lhe governmenL's provlslon of publlc healLhcare
servlces. ln Lhe same veln, akaLan 8akyaL wlll ensure LhaL lnsLlLuL !anLung negara
(l!n) wlll noL be prlvaLlsed Lo remaln an affordable cenLre of excellence ln
cardlovascular and Lhoraclc care wlLh world-class medlcal and surglcal servlces for
boLh adulL and paedlaLrlc paLlenLs.

AL Lhe same Llme, akaLan 8akyaL also proposes Lo renegoLlaLe Lhe concesslon
conLracLs for Lhe provlslon of medlclnes and servlces Lo publlc hosplLals and cllnlcs
and shorLen Lhe concesslon perlod Lo seven years ln order Lo lmprove compeLlLlon
and beLLer dellverables.

Sub-Sect|on 1.S: Ut|||ty 1ar|ffs

akaLan 8akyaL proposes Lo revlew and renegoLlaLe all lopslded concesslon
agreemenLs, ln parLlcular conLracLs for newer lndependenL power producers (ls),
companles lnvolved ln Lhe LreaLmenL and dlsLrlbuLlon of waLer, and Lhe naLlonal
sewerage company, lndah WaLer konsorLlum, Lo enable rechannellng of corporaLe
subsldles dlrecLly Lo Lhe people. Such reforms are Lo be underLaken ln a pragmaLlc
manner so as noL Lo negaLlvely affecL Lhe bond markeL.

1o ensure no oversupply of power generaLed by ls LhaL 1enaga naslonal 8erhad as
Lhe sole power dlsLrlbuLor ls obllged Lo Lake and pay, akaLan 8akyaL ls commlLLed Lo
observlng Lhe generally accepLed lnLernaLlonal sLandard and besL pracLlces ln Lhe
power lndusLry by keeplng Lhe reserve margln below 20. AlLhough Lhe reserve
margln level has gone down Lo 31.3 aL presenL from more Lhan 40 prevlously,
operaLlng wlLh such overcapaclLy ls helplng ls enrlch Lhemselves on gas subsldles
19
and wasLlng vlLal energy resources on unused elecLrlclLy.

Sect|on 2: ka|s|ng M|n|mum nouseho|d Income to kM4,000

akaLan 8akyaL ls commlLLed Lo ralslng Lhe monLhly mlnlmum wage Lo 8M1,100
wlLh a schedule for perlodlc upward ad[usLmenLs. AL Lhe same Llme, akaLan 8akyaL
wlll puL ln place mechanlsms Lo ensure LhaL forelgn workers' levles are lowered by
removlng mlddlemen fees pald by employers. CollecLlons of forelgn workers' levles
wlll be channeled Lo up-skllllng programmes for lower-lncome worklng groups.

akaLan 8akyaL also proposes a sLudy Lo lnLroduce an lncenLlve scheme for
companles ln selecLed lndusLrles Lo offer managemenL Lralnee programmes for
hlgh-flylng graduaLes aL a monLhly enLry-level salary of 8M4,000.

AL Lhe same Llme, Lo narrow Lhe skllls gap, ln boLh hard and sofL skllls, akaLan
8akyaL proposes sLrengLhenlng career-advlsory servlces aL unlverslLles and hlgher
learnlng lnsLlLuLlons, effecLlve lnLernshlp programmes as mandaLory parLs of Lhe
syllabus aL all faculLles ln publlc unlverslLles, and maklng Lngllsh a compulsory pass
for SM.

Sect|on 3: kedef|n|t|on of the overty L|ne Income and kev|ew of
We|fare 8enef|ts for the oor, the Marg|na||sed, and the
Underpr|v||eged

Sub-Sect|on 3.1: More kea||st|c overty L|ne Income

CVLk1 LINL INCCML (LI) (kM)
1ota| Urban kura|
en|nsu|ar Ma|ays|a 830 840 790
Sabah 1,090 1,080 1,120
Sarawak 920 960 870
Sources: Malaysla's Pousehod lncome Survey (PlS) 2012

1he monLhly overLy Llne lndex (Ll) used by Lhe 8arlsan naslonal governmenL ls
8M830 for households ln enlnsular Malaysla, 8M1,090 ln Sabah and Labuan, and
8M920 ln Sarawak. akaLan 8akyaL holds Lhe oplnlon LhaL Lhls Ll ls Loo low and
unreallsLlc and musL be revlewed Lo beLLer reflecL Lhe acLual condlLlons experlenced
20
by socleLy and ensure Lhe welfare of Lhe ma[orlLy of people deslgnaLed as poor. As
such, akaLan 8akyaL proposes LhaL Lhe baskeL of goods and servlces used Lo
calculaLe Lhe Ll should lnclude noL only lmpuLed renLs buL also Lhe cosL of
purchaslng houses. ln addlLlon, urban Ll should be reflned Lo dlfferenLlaLe cosLs of
llvlng ln dlfferenL clLles.

Accordlng Lo Lhe 2012 Pousehold lncome Survey, even Lhough Lhe average
household lncome ln Malaysla ls 8M3,000, half of all Malayslan households have a
monLhly lncome below 8M3,626. 8oughly 60 of all urban households have monLhly
lncomes below 8M3,000, whlch ls an lnsufflclenL amounL Lo geL by ln Lhe clLy. 1hls ls
Lhe reallLy faced by Lhe ma[orlLy of Malayslan households wlLh 3 Lo 3 famlly
members LhaL have Lo subslsL on such an amounL desplLe rlslng cosLs and oLher
pressures.

Pence akaLan 8akyaL proposes LhaL Lhe monLhly Ll ls revlewed and reseL aL a level
of around 8M1,300 for enlnsular Malaysla, 8M1,800 for Sabah and Labuan, and
8M1,630 for Sarawak so LhaL more households become ellglble Lo recelve
governmenL welfare asslsLance.

Sub-Sect|on 3.2: Improv|ng We|fare 8enef|ts and Soc|a| Safety Net

AL presenL, Lhere ls a myrlad of agencles provldlng soclal welfare paymenLs and
beneflLs for Lhe poor and dlsadvanLaged. akaLan 8akyaL proposes LhaL Lhese varlous
soclal welfare paymenLs be coordlnaLed and synchronlzed lnLo one umbrella soclal
beneflLs sysLem Lo faclllLaLe LargeLed dlsLrlbuLlon and monlLorlng, ln addlLlon Lo Lhe
ongolng work Lo creaLe a comprehenslve welfare daLabase (whlle e-kaslh ls
exLenslve, lL cannoL be scaled up).

Sub-Sect|on 3.2.1: Adopt|on of mykas|h System

Cver 8 of Malayslans llve below Lhe exlsLlng Ll LhaL does noL address Lhe hardshlp
of currenL reallLles where Lhousands of households earn less Lhan 8M1,000/monLh.
1he usual pracLlce by !abaLan keba[lkan MasyarakaL (!kM) ls Lo credlL cash dlrecLly
lnLo reclplenLs' accounLs whlch someLlmes leads Lo problems of conslsLenL delays ln
cash Lransfer and lnablllLy Lo properly ascerLaln wheLher Lhe lnLended ouLcomes are
meL ln Lhe flrsL place.

AlLhough flnanclal ald ls dlsLrlbuLed, nuLrlLlonal needs are noL meL, healLh sLandards
sllp, Lhe chlldren's educaLlon suffers, whlch ln Lurn could lead Lo poor [ob prospecLs.
1he cycle of hardshlp and poverLy perslsLs unabaLed, leadlng Lo Lhe need for a new
mechanlsm LhaL ls far more efflclenL LhaL addresses LargeL groups and ls able Lo
monlLor Lhe reclplenLs' evenLual exlL from Lhe cycle of poverLy.

As parL of Lhe efforLs Lo ensure a falrer and beLLer LargeLed subsldy reglme and
encompasslng welfare sysLem, akaLan 8akyaL Lherefore proposes Lo replace Lhe
21
currenL !kM's welfare dlsLrlbuLlon sysLem wlLh Lhe a cashless paymenL sysLem whlch
enables quallfled reclplenLs Lo selecL paymenL for exacLly whaL Lhey need wlLhouL
uLlllslng cash. Welfare beneflclarles could use Lhelr Mykad as a paymenL Lool aL
deslgnaLed local reLall ouLleLs. CredlL conLalned ln Lhe reclplenLs' Mykad ls used Lo
purchase essenLlals such as rlce, flour, sugar, eLc. 1he Mykad can also be used Lo
Lrack Lhe expendlLure made by reclplenLs and comblned wlLh oLher programmes
wlLh oLher mlnlsLrles such as keeplng klds ln schools and addlLlonal LuLorlng for
slngle moLhers, among oLhers.

Sub-Sect|on 3.2.2: Lstab||shment of the kura| Insurance Scheme

akaLan 8akyaL also suggesLs Lhe creaLlon of a 8ural lnsurance Scheme or more
speclflcally, Lhe larmers, llshermen and LlvesLock 8reeders lnsurance Scheme
(llL8lS) LhaL ls more comprehenslve Lo asslsL Lhls segmenL of socleLy Lo deal wlLh Lhe
lmpacL of uncerLaln weaLher condlLlons, Lhe change ln seasons and oLher
unexpecLed clrcumsLances LhaL wlll lnadverLenLly affecL Lhelr llvellhood.

lor example, under Lhe currenL llshermen lnsurance Scheme, compensaLlon for
flshermen who pass away and allowance for hosplLal admlsslons are provlded. Lven
so, Lhls scheme sldellnes oLher rlsks LhaL may affecL flshermen, such as reduced
caLch durlng Lhe monsoon season LhaL negaLlvely lmpacL Lhe healLh and safeLy of
flshermen. 1he change ln seasons also lmpacLs Lhe yleld of rubber Lappers and
farmers. unexpecLed lncldences such as ouLbreak of dlsease LhaL affecL llvesLock and
planLs wlll also affecL Lhe lncome of Lhls group.

akaLan 8akyaL proposes LhaL Lhe llL8lS ls creaLed based on a 'locaLlon approach'
for losses lncurred by Lhe change of seasons and an 'lndlvldual approach' for losses
lncurred by naLural dlsasLers and ouLbreak of dlseases.
lL ls esLlmaLed LhaL Lhe federal governmenL need only allocaLe a LoLal of 8M363.3
mllllon per annum Lo execuLe Lhls scheme based on Lhe followlng assumpLlons:
(a) full annual premlum ls 8M1,000 LhaL wlll be shared equally beLween Lhe
farmer/llvesLock breeder/flsherman (8M300) and Lhe governmenL (8M300),
and
(b) abouL 30 of Lhe LoLal number of farmers, llvesLock breeders and flshermen
- or approxlmaLely 733,000 persons - wlll parLake of Lhls scheme each year.

Sub-Sect|on 3.2.3: kev|ew of the 1Ma|ays|a ket|rement Sav|ngs Scheme

akaLan 8akyaL ls concerned abouL Lhe faLe of ordlnary Malayslans especlally
labourers or Lhose who are self-employed wlLhouL a sLeady source of lncome,
lncludlng blue-collared workers or Lhose lnvolved ln lnformal work such as farmers,
flshermen, Lax drlvers, peLLy Lraders, hawkers, people dolng odd [obs, housewlves
and oLhers who earned below 8M1,300 a monLh, whlch ls Lhe Ll level suggesLed by
akaLan 8akyaL.
22
akaLan 8akyaL calls for a revlew of Lhe 1Malaysla 8eLlremenL Savlngs Scheme whlch
ls presenLly admlnlsLered by Lhe Ll Lo ensure worklng class people and Lhose
wlLhouL secure lncome have some reLlremenL fund vla a volunLary conLrlbuLlon
scheme.
1he governmenL's conLrlbuLlon raLe of 3 of Lhe LoLal conLrlbuLlon, capped aL 8M60
per annum from 2010 Lo 2014 ls a shorL-Lerm measure and ls noL a susLalnable
measure for Lhls caLegory of people, parLlcularly lf Lhey lose Lhelr source of lncome,
ln order Lo overcome poverLy and Lhe economlc pressures upon enLerlng reLlremenL.
akaLan 8akyaL Lherefore proposes a new pollcy whereby Lhe governmenL wlll
lncrease lLs conLrlbuLlon Lo 13 per annum of Lhe year's LoLal conLrlbuLlon as an
lncenLlve for Lhls group Lo conLlnue wlLh Lhe scheme, ln order LhaL Lhey may en[oy
varlous beneflLs besldes Lhe penslon fund lLself, lncludlng healLhcare expenses,
educaLlon and houslng, as well as geLLlng Lhem ouL of poverLy ln Lhe long run.

Sub-Sect|on 3.2.4: Lxtens|on of SCCSC Coverage

AL presenL, Lhere are very few alLernaLlve lnsurance schemes for lower lncome
workers, whlle SCCSC covers only accldenLs LhaL occur when workers commuLe Lo
work and durlng worklng hours. As such, akaLan 8akyaL proposes a LrlparLlLe
conLrlbuLlon Lo puL ln place a 24-hour lnsurance coverage for accldenLs occurrlng
ouLslde of worklng hours wlLh Lhe federal governmenL, employer, and Lhe employee
each conLrlbuLlng 8M1 exLra per monLh.

Sub-Sect|on 3.2.S: Strengthen|ng 8enef|ts for the D|fferent|y-Ab|ed eop|e

Accordlng Lo Lhe unlLed naLlons (un) world populaLlon sLaLlsLlcs, approxlmaLely 10
of Lhe world's populaLlon are dlfferenLly-abled persons, lf we were Lo exLrapolaLe
Lhls flgure, approxlmaLely 2.8 mllllon Malayslans are ln Lhls caLegory. Lven so, Lhe
ueparLmenL of Soclal Welfare has only recorded 313,683 persons up unLll 2010,
whlch ls less Lhan 11.2 of Lhe esLlmaLed LoLal number. Pence, akaLan 8akyaL alms
Lo reglsLer 400,000 dlfferenLly-abled persons a year beglnnlng 2014 so LhaL Lhe LoLal
reglsLered wlll be 80 wlLhln flve years' Llme, Lo ensure Lhls communlLy wlll recelve
Lhe full beneflLs enLlLled Lo Lhem.
ln order Lo enforce Lhe ersons wlLh ulsablllLles AcL 2008 whlch ls rlghLs-based,
akaLan 8akyaL wlll conLlnue Lo emphaslse lncreaslng access for dlfferenLly-abled
persons Lo faclllLles, amenlLles, servlces and publlc LransporL, whlch lncludes for
example ensurlng LhaL Lhe LoLal number of car park bays for dlfferenLly-abled
persons follows un sLandards, whlch ls one dlfferenLly-abled person car park bay per
30 ordlnary car park bays, wlLh Lhe approprlaLe car park slze and locaLlon, as well as
Lo lmprove road surfaces so LhaL non-sLep busses can be fully uLlllzed by
dlfferenLly-abled persons. akaLan 8akyaL wlll also allocaLe 8M300 mllllon per year
Lo:
23
(a) lncrease subslsLence allowance from 8M300 Lo 8M300 per monLh for
dlfferenLly abled persons who work buL wlLh a monLhly lncome below
8M1,200, and,
(b) provlde a speclal allocaLlon for Lhose wlLh severe dlsablllLles, up Lo a
maxlmum of 8M1,000 per monLh.

Sub-Sect|on 3.2.6: Strengthen|ng 8enef|ts for Sen|or C|t|zens

8y deflnlLlon, an aged naLlon ls achleved when Lhose above Lhe age of 60 years
represenL 13 of Lhe LoLal populaLlon. Pence Malaysla ls esLlmaLed Lo achleve Lhls
sLaLus by 2030 as, based on esLlmaLes ln Lhe naLlonal ollcy for Lhe Llderly, Lhe raLlo
of Lhe elderly Lo Lhe LoLal populaLlon ln Malaysla wlll lncrease by a slngle fold from
7 Lo 14 ln 28 years Llme.
key focus areas ln preparlng for an aglng populaLlon lnclude healLhcare and welfare.
akaLan 8akyaL belleves LhaL more gerlaLrlclans musL be Lralned ln order Lo prepare
Lhe counLry for Lhls evenLuallLy, Malaysla musL lncrease Lhe LoLal number of
gerlaLrlclans from approxlmaLely 16 Loday Lo aL leasL 1,000 by 2030.

Sect|on 4: Nat|onw|de rogramme of rov|d|ng Affordab|e ua||ty
nomes |n the Low-Cost and Med|um-Cost Categor|es

1oday, Lhere ls compeLlLlon for flnlLe land space beLween affordable houslng,
medlum-cosL houslng and hlgh-end properLles. akaLan 8akyaL holds Lhe vlew LhaL
houslng ls a rlghL of every clLlzen and remalns commlLLed Lo ensurlng LhaL each
Malayslan can afford Lo own a decenL and comforLable home. Pence, Lhe
governmenL musL Lake responslblllLy ln provldlng affordable houslng lnsLead of
lmmedlaLely Lurnlng Lo prlvaLe developers. As had been announced ln Lhe ManlfesLo
akaLan Parapan 8akyaL ln CL13, akaLan 8akyaL lnLends Lo lnvesL 8M3 bllllon ln Lhe
flrsL year and 8M2 bllllon per year afLer LhaL Lo ensure LhaL Malayslans are able Lo
afford Lo buy Lhelr own homes.
8M3 bllllon wlll be allocaLed Lo bulld 130,000 unlLs of affordable houses coverlng
low-cosL houslng (below 8M73,000) and medlum-cosL houslng (beLween 8M130,000
and 8M230,000).
SyarlkaL erumahan negara 8erhad (Sn8) wlll be Lasked wlLh ensurlng comforLable
homes are bullL aL a reasonable prlce. akaLan 8akyaL holds Lhe oplnlon LhaL
emphasls musL be glven Lo susLalnable developmenL pro[ecLs LhaL ls approprlaLe for
every LargeLed lncome brackeL. Pouslng developmenL pro[ecLs musL be
well-lnLegraLed wlLh clLy plannlng pollcles and Lhe developmenL of lndusLrlal and
commerclal cenLres. As an lncenLlve Lo bulld more affordable homes, akaLan 8akyaL
suggesLs speclflc lncenLlves for developers such as Lax deducLlons, reasonably
lowerlng land premlums for bulldlng a quoLa of affordable houslng unlLs as
proposed, and oLhers.
24
ln llne wlLh Lhe ldea of bulldlng 130,000 unlLs of low- and medlum-cosL homes,
akaLan 8akyaL plans Lo esLabllsh a naLlonal Pouslng CorporaLlon (nPC). nPC ls
responslble Lo oversee large-scale affordable houslng developmenL pro[ecLs and has
Lhe larger mandaLe Lo organlze federal governmenL agencles LhaL are dlrecLly
lnvolved ln esLabllshlng pollcy guldellnes for publlc houslng pro[ecLs. nPC ls Lo be Lhe
prlmary agenL Lo plan, coordlnaLe, oversee and develop affordable houslng schemes.
nPC wlll be Lasked wlLh bulldlng homes Lo be sold aL an affordable prlce for Lhe
LargeLed groups ln order Lo balance markeL prlces seL by prlvaLe developers.

Sect|on S: I|ght Aga|nst Cr|me

ollclng ls a cruclal servlce provlded by Lhe execuLlve arm Lo malnLaln law and order,
and Lo promoLe publlc securlLy and well-belng. A lack of confldence ln Lhe capaclLy
and lnLegrlLy of Lhe pollce ls reflecLlve of a broader dlsappolnLmenL wlLh Lhe
governmenL. 8ellance on emergency powers and deLenLlon wlLhouL Lrlal Lo flghL
organlsed crlme ls a slgn of a crlsls of compeLence ln Lhe pollce and Lhe lnablllLy Lo
achleve human rlghLs-based pollclng.

uue Lo lack of lmplemenLaLlon by Lhe governmenL, akaLan 8akyaL recommends a
repeaL of our 2013 budgeL proposals, broadly followlng Lhe recommendaLlons of Lhe
8eporL of Lhe 8oyal Commlsslon Lo Lnhance Lhe CperaLlon and ManagemenL of Lhe
8oyal Malayslan ollce chalred by 1un uzalddln (Lhe uzalddln 8eporL"):
(a) locus on lmprovlng Lhe efflclency of olls ulra[a Malaysla's (u8M) human
resources, coverage, and servlce dellvery by opLlmlslng 'core' over 'non-core'
funcLlons l.e. skllled, unlformed pollce personnel should be Lransferred ouL of
admlnlsLraLlve work and lnLo pollce work proper. Clvlllans can be hlred Lo
fulflll admlnlsLraLlve funcLlons. u8M does noL requlre Lhe 30 manpower
lncrease proposed by Lhe Pome MlnlsLry (represenLlng around 40,000
addlLlonal offlcers) slnce by 2011 Malaysla had one pollce offlcer Lo every 270
clLlzens (1:270). 1hls ls very close Lo ln1L8CL's recommended raLlo of 1:230.
(b) 8evlew of and 8e-Lasklng Lhe Ceneral CperaLlons lorce (CCl/asukan
Cerakan Am). CurrenLly, Lhe Cmnlpresence lnlLlaLlve under Lhe Crlme nk8A ls
belng conducLed wlLh asslsLance from 8LLA and !AM. akaLan 8akyaL ls of
Lhe vlew LhaL only quallfled and professlonal pollce should be enLrusLed wlLh
Lhls [ob. non-pollce reserves such as 8LLA should be LranslLloned ouL of
pollclng work or glven Lhe opporLunlLy Lo quallfy as pollce offlcers Lralned
wlLh full knowledge of procedures and Lhe law. WlLh 14,331 personnel ln
2010 and wlLh communlsL lnsurgency no longer a LhreaL Lhere needs Lo be a
revlew of wheLher Lhe CCl ls oversLaffed, has overlapplng funcLlons wlLh Lhe
Malayslan Armed lorces, and ls overly concenLraLed ln Lhe enlnsula when
greaLer securlLy problems exlsL ln LasL Malaysla. Clven Lhelr pollce Lralnlng
CCl personnel should be glven Lhe opporLunlLy Lo redeploy ln crlme-flghLlng
as parL of Lhe efforL Lo reduce Lhe paramlllLary characLer of u8M and
concenLraLe fully on crlme.
(c) uramaLlcally lncrease Lhe lnvesLlgaLlve capaclLy of u8M. 1he Crlmlnal
23
lnvesLlgaLlon ueparLmenL (Clu) or !abaLan SlasaLan !enayah should have an
lnvesLlgaLlng Cfflcer (lC) Lo a case raLlo of 1:3, as per Lhe uzalddln 8eporL.
Malaysla needs aL mlnlmum a furLher 1,000 lCs. WlLh Lhe offlclal crlme raLe
llkely belng under-reporLed Lhere wlll llkely be more lCs needed once
Lransparency on crlme daLa ls achleved.
(d) SupporL Lhe creaLlon of a genulnely lndependenL and effecLlve lndependenL
ollce ComplalnLs & MlsconducL Commlsslon (lCMC) whlch ls essenLlal Lo
erase doubLs abouL u8M's accounLablllLy and commlLmenL Lo publlc servlce.
(e) LsLabllshmenL of an adequaLely sLaffed Crganlsed Crlme unlL.

Sect|on 6: 1ack||ng 1raff|c Congest|on

1o address Lrafflc woes parLlcularly ln urban areas, akaLan 8akyaL proposes
measures LhaL wlll encourage usage of publlc LransporL especlally bus LranslL servlces
such as:
(a) free publlc LransporL for cerLaln secLlons of socleLy, especlally senlor clLlzens,
sLudenLs, slngle moLhers and dlfferenLly-abled people wlLhln a cerLaln radlus of clLy
or Lown cenLres, and,
(b) free or subsldlsed bus rldes from selecLed houslng areas Lo publlc LransporLaLlon
hubs and from Lhese publlc LransporLaLlons hubs Lo Lhe workplace.

Sect|on 7: Address|ng Issues of nouseho|d Indebtedness and
8ankruptcy

AL presenL, Malaysla's household debL-Lo-Cu raLlo sLands aL 83, among Lhe
hlghesL ln Lhe reglon, up from 71.7 ln 2009 and 39 aL Lhe sLarL of Lhe Aslan
flnanclal crlsls ln 1997. Malaysla's household debL has expanded aL a pace of 11.3
per annum over Lhe pasL flve years, ouLpaclng Lhe nomlnal Cu growLh of 7.3 on
average.

AparL from Lhe macroprudenLlal measures proposed above Lo cool Lhe properLy
markeL, akaLan 8akyaL also recommends Lhe followlng lnlLlaLlves Lo address Lhe
lssue of hlgh household lndebLedness and rampanL bankrupLcy cases especlally
among youLh:
(a) lnLroducLlon of mandaLory flnanclal llLeracy lessons aL all levels of educaLlon
Lo fosLer sound undersLandlng, knowledge and skllls Lowards maklng
responslble flnanclal declslons and debL managemenL,
(b) SLrengLhenlng of oLher macro-prudenLlal measures Lo be lmposed by 8ank
negara Malaysla on flnanclal lnsLlLuLlons such as:
o lncreaslng Lhe mlnlmum monLhly lncome requlremenL for Lhe
possesslon of credlL cards,
o a cap on credlL card llmlL noL exceedlng a cerLaln percenLage of a
cardholder's lncome,
o a cap on vehlcle loans noL exceedlng a percenLage of a borrower's
26
LoLal debL,
(c) SysLemaLlc and coordlnaLed efforLs among all relevanL governmenL
deparLmenL and agencles Lo Lackle predaLory lendlng lssues ln parLlcular
relaLed Lo loan sharks and oLher Lypes of lllegal money lenders.

Sect|on 8: W|den|ng of Income 1ax 8rackets

AmldsL escalaLlng cosLs of llvlng, mlddle-lncome earners appear Lo feel Lhe plnch Lhe
mosL and Lo be on Lhe loslng end slnce Lhey are noL ellglble for governmenL flnanclal
asslsLance or cash handouLs such as 8anLuan 8akyaL 1Malaysla (881M). 1o ease Lhe
burden of Lhls lncome group, akaLan 8akyaL proposes:
(a) a revamp ln Lhe personal lncome Lax sLrucLure wlLh lLs presenL very narrow
chargeable lncome Lax bands so LhaL mlddle-lncome earners wlll noL be
pushed Lo hlgher Lax brackeLs aL an acceleraLed pace desplLe a marglnal
payrlse, and/or,
(b) speclflc and LargeLed Lax exempLlons for Lhe mlddle-lncome group.

ASSLSSMLN1 LAk 2012 - INLAND kLVLNUL 8CAkD
Chargeab|e Income
8rackets (kM)
Ca|cu|at|ons (kM) kate () 1ax Amount (kM)
0 - 2,300 Cn Lhe flrsL 2,300 0 0
2,301 - 3,000 nexL 2,300 1 23
3,001 - 10,000
Cn Lhe flrsL 3,000
nexL 3,000
3
23
130
10,001 - 20,000
Cn Lhe flrsL 10,000
nexL 10,000
3
173
300
20,001 - 33,000
Cn Lhe flrsL 20,000
nexL 13,000
7
473
1,030
33,001 - 30,000
Cn Lhe flrsL 33,000
nexL 13,000
12
1,323
1,800
30,001 - 70,000
Cn Lhe flrsL 30,000
nexL 20,000
19
3,323
3,800
70,001 - 100,000
Cn Lhe flrsL 70,000
nexL 30,000
24
7,123
7,200
Lxceedlng 100,000
Cn Lhe flrsL 100,000
nexL.....
26
14,323
......

27
kCCSLD NLW 1Ak 8kACkL1S ICk ASSLSSMLN1 LAk 2014
Lx|st|ng Chargeab|e Income
8rackets (kM)
kate ()
roposed Chargeab|e Income
8rackets (kM)
0 - 2,300 0 0 - 10,000
2,301 - 3,000 1 10,001 - 23,000
3,001 - 10,000 3 23,001 - 40,000
10,001 - 20,000 3 43,001 - 60,000
20,001 - 33,000 7 60,001 - 80,000
33,001 - 30,000 12 80,001 - 123,000
30,001 - 70,000 19
123,001 - 173,000
70,001 - 100,000 24 173,001 - 230,000
Lxceedlng 100,000 26 Lxceedlng 230,000

lL ls hoped LhaL Lhese measures wlll help ralse naLlonal dlsposable lncome and
dlscourage Malayslans from looklng for greener pasLures abroad.
28
1nkUS1 III: LNSUkING A MCkL 8ALANCLD, INCLUSIVL AND
SUS1AINA8LL LCCNCMIC DLVLLCMLN1

Sect|on 1: Lnhanc|ng Connect|v|ty to Narrow the kura|-Urban and
keg|ona| D|v|des

akaLan 8akyaL sLrongly belleves LhaL lncreased domesLlc and lnLernaLlonal
connecLlvlLy ln Lhe form of lnLerneL or LerresLrlal hlghways wlll go far Lowards
ensurlng a more balanced, lncluslve and susLalnable growLh. oor connecLlvlLy, boLh
physlcal and onllne, and lnfrasLrucLure deflclencles, especlally ln Sabah and Sarawak,
form Lhe maln sLumbllng blocks Lo Malaysla's plan Lo opLlmlse lLs full poLenLlal. More
governmenL efforLs are needed Lo acceleraLe Lhe developmenL of beLLer loglsLlcs
sysLems and lnfrasLrucLure Lo connecL rural areas Lo urban growLh cenLres ln Lhe
same sLaLe or anoLher reglon, and Lo llnk up naLlonwlde ln order Lo provlde huge
economlc beneflLs such as lmprovlng Lhe dellvery of soclal servlces, creaLlng a more
conduclve buslness cllmaLe, promoLlng lnnovaLlon, creaLlvlLy and use of new
Lechnology, and generaLlng [ob opporLunlLles.

Sub-Sect|on 1.1: an-8orneo n|ghway

akaLan 8akyaL proposes Lo fasL Lrack Lhe compleLlon and upgradlng of Lhe
an-8orneo Plghway llnklng all Lowns and clLles ln Sabah and Sarawak as promlsed ln
ManlfesLo akaLan Parapan 8akyaL. 1he currenL Lrunk road connecLlng Lowns ln
Sabah and Sarawak ls lnadequaLe for LransporL and economlc developmenL.
uegradaLlon of road quallLy has also led Lo frequenL faLallLles. rlorlLy wlll be glven Lo
rehablllLaLlng degraded and dangerous areas whllsL lmplemenLlng a proper,
well-malnLalned dual-carrlageway hlghway ln sLages sLarLlng from 2014. Comblned
wlLh Lhe llfLlng of Lhe caboLage pollcy, akaLan 8akyaL sees Lhls as a ma[or boosL Lo
Sabah and Sarawak's economlc compeLlLlveness.

Sub-Sect|on 1.2: Affordab|e Internet Access

akaLan 8akyaL acknowledges Lhe lmporLance of lnLerneL access Lo economlc growLh
and [ob creaLlon ln developlng economles. Accordlng Lo flndlngs of Lwo sLudles,
every:
(a) 10 percenLage polnL lncrease ln hlgh-speed lnLerneL connecLlon could llfL
Cu growLh by addlLlonal 1.3 percenLage polnLs (Lhe Clobal lnformaLlon &
CommunlcaLlons 1echnology ueparLmenL of Lhe World 8ank/llC),
(b) 10 lncrease ln Lhe number of people onllne could boosL a naLlon's Cu by
1 whlle doubllng Lhe average broadband speeds ln a counLry could lncrease
29
Lhe Cu by addlLlonal 0.3 (Lrlcsson).

lndeed, Lhe World 8ank has ldenLlfled moblle as Lhe slngle mosL powerful way Lo
reach and dellver publlc and prlvaLe servlces Lo hundreds of mllllons of people ln
remoLe and rural areas across Lhe developlng world." lL ls Lherefore akaLan 8akyaL's
lnLenLlon Lo provlde access Lo very affordable hlgh-speed lnLerneL connecLlon
naLlonwlde Lo beneflL low-lncome households ln remoLe and rural areas Lo enable
a more lncluslve and susLalnable developmenL across all levels of Lhe economy and
socleLy. A Lechnology-enabled economy ls more dlsposed Lo creaLe more new [obs
especlally for youLh.

Sect|on 2: Increas|ng Women's art|c|pat|on |n and Contr|but|on to the
Lconomy

Sub-Sect|on 2.1: Ma|ays|an Women's Contr|but|on Iund

WlLh Lhe lncrease of Lhe number of Malayslan women Lo 13.9 mllllon ln 2009
compared wlLh 11.3 mllllon ln 2000, and an almosL equal male-female raLlo, akaLan
8akyaL ls confldenL LhaL women wlll conLlnue Lo be a maln conLrlbuLor Lo Lhe
naLlon's economy. 8ased on Lhe 8Mk-10 8eporL, parLlclpaLlon of women ln Lhe
workforce has lncreased Lo 46.4 ln 2009 from 44.7 ln 1993. 18.9 of all worklng
Malayslan women are ln Lhe 23-29 age brackeL. Lven so, Lhls flgure ls only 13.1 for
women ln Lhe 30-34 age brackeL as more women are prone Lo leave Lhe [ob markeL
early due Lo personal reasons or famlly commlLmenLs.
As a form of appreclaLlon for Lhe conLrlbuLlon of women Lowards naLlonal
developmenL, and Lo encourage greaLer parLlclpaLlon ln Lhe growLh of Lhe naLlonal
economy, akaLan 8akyaL wlll allocaLe beglnnlng 2014:
(a) 8M1,200 a year for each worklng moLher Lo pay for Lhe full or parLlal daycare
charges for Lhelr chlldren below Lhe age of 12,
(b) 8M3 bllllon a year Lo Lhe naLlonal Women's ConLrlbuLlon Scheme (nWCS), a
comprehenslve soclal safeLy neL for wlves and especlally housewlves as
ouLllned ln Lhe ManlfesLo akaLan Parapan 8akyaL for CL13.

1o execuLe Lhls scheme, Lhe husband musL conLrlbuLe on behalf of hls wlfe aL a
mlnlmum raLe of 8M120 up Lo 8M1,200 per annum accordlng Lo whaL he can afford,
whlle Lhe governmenL wlll conLrlbuLe 8M600 per annum regardless of Lhe husband's
conLrlbuLlon. Savlngs vla nWCS can be wlLhdrawn when a spouse dles, dlvorce,
permanenL dlsablllLy, loss of source of lncome, and oLhers. lf any of Lhese lncldences
do noL occur, Lhe housewlfe may fully wlLhdraw aL Lhe age of 30, where Lhe amounL
saved would aL Lhe very leasL be 8M30,000.

30
Sub-Sect|on 2.2: "More Women Leaders" o||cy

As menLloned ln Lhe akaLan Parapan 8akyaL ManlfesLo for CL13, Lhls pollcy sLrlves
Lo meeL Lhe LargeL of aL leasL 30 women parLlclpaLlon ln clvll servlce, corporaLe
managemenL, and naLlonal leadershlp ln boLh Lhe publlc and prlvaLe secLors by 2017.

As a nexL sLep for Lhe Women's Agenda and ln keeplng wlLh Lhe gender equallLy
prlnclple, akaLan 8akyaL pledges Lo push for a law LhaL lmposes elLher gender Lo
occupy noL less Lhan 30 of all power and declslon-maklng organs. 1he elecLoral
reforms LhaL akaLan 8akyaL has been pushlng for may also conslder lncorporaLlng
speclal elecLoral quoLa measures such as esLabllshlng all-women shorLllsLs and/or
reservlng aL leasL 30 of newly creaLed elecLoral seaLs excluslvely for women
candldaLes Lo lncrease women represenLaLlon ln any leglslaLlve assembly.

1he Selangor sLaLe governmenL has seL Lhe bar hlgh ln keeplng wlLh akaLan 8akyaL's
gender-bllnd commlLmenL wlLh four sLaLe assemblywomen ln Lhe LxCC llne-up and
one as Malaysla's malden women speaker of any leglslaLlve assembly.

Sect|on 3: kev|ew of the Cabotage o||cy for Sabah and Sarawak

ln order Lo reduce economlc dlsparlLles beLween enlnsular Malaysla and Sabah and
Sarawak, akaLan 8akyaL calls for a compleLe llberallsaLlon of Lhe caboLage pollcy Lo
allow shlps of any naLlonallLy Lo load and unload goods aL any porLs ln Sabah and
Sarawak wlLhouL havlng Lo flrsL dock aL elabuhan kelang. 1he caboLage pollcy has
been ldenLlfled as among Lhe ma[or causes of hlgh frelghL cosLs ln Sabah and
Sarawak, pushlng up prlces of consumer goods and servlces and overall cosL of dolng
buslness. 1hls llberallsaLlon move wlll cerLalnly help brlng down prlces of goods (and
servlces) golng Lo and from Sabah and Sarawak whllsL glvlng a nudge Lo porL servlces
and relaLed lndusLrles and even Lhe emergence of manufacLurlng clusLers as goods
and servlces become more cosL compeLlLlve.

Sect|on 4: Strengthen|ng Nat|ona| o||c|es for Ut|||t|es, Lducat|on,
nea|thcare, Land and Lnv|ronment

Sub-Sect|on 4.1: Improv|ng Access|b|||ty to Ut|||t|es and Lducat|on |n the
Inter|or of Sabah and Sarawak, and Some arts of en|nsu|ar Ma|ays|a

Sub-Sect|on 4.1.1: 1owards 100 L|ectr|c|ty and Water Coverage

Lven ln hlghly developed sLaLes such as Selangor, Lhere are rural and seml-rural
areas wlLhouL adequaLe elecLrlclLy and fresh waLer supplles. akaLan 8akyaL
31
proposes LhaL such vlllages be elLher connecLed Lo Lhe grld or lnsLalled wlLh
decenLrallsed renewable energles (whlchever ls more cosL effecLlve) such as
mlcro-hydro, blomass, wlnd and/or solar. WaLer can be pumped and fllLered wlLh
decenLrallsed power sysLems. Speclal aLLenLlon wlll be pald Lo esLabllsh rellable,
off-grld elecLrlclLy supply Lo promoLe lndusLrlal developmenL ln Lhe lnLerlor of Sabah
and Sarawak ln parLlcular for Lhe purpose of [ob creaLlons.

Solar phoLovolLalc 'farms' can be lnsLalled on vacanL or oLherwlse unusable land Lo
supply elecLrlclLy Lo Lhe grld or remoLe communlLles. akaLan 8akyaL also holds Lhe
vlew LhaL new-generaLlon 'low veloclLy' wlnd Lurblnes should be LesLed for poLenLlal
ln Malaysla as a poLenLlal breakLhrough low-cosL energy alLernaLlve. ln all cases,
locallsed feaslblllLy sLudles should be conducLed Lo deLermlne Lhe besL renewable
energy mlx ln each area. 1hls efforL should lnlLlally be LargeLed aL sLaLes where
poverLy ls hlgh and elecLrlclLy supply ls lnadequaLe such as Sabah and Sarawak.

Sub-Sect|on 4.1.2: Improv|ng Access to Lducat|on |n kura| Ma|ays|a and
amongst M|nor|ty 8um|puteras

LducaLlonal aLLalnmenL ln rural Malaysla lags behlnd urban areas, ln parLlcular
beLween Lhe more urbanlsed enlnsula and relaLlvely rural Sabah and Sarawak. 8y
eLhnlclLy, Crang Asll and Crang Asal fare worse Lhan oLher eLhnlc groups, wlLh many
falllng Lo obLaln cerLlflcaLlon beyond prlmary school. akaLan 8akyaL proposes Lo
close Lhls gap by focuslng on lncreaslng successful compleLlon of secondary school
by:
(a) esLabllshlng more accesslble schools ln Lhe lnLerlor of rural areas (whlch may
lnclude consLrucLlon of hosLels or accommodaLlon and LransporL
lnfrasLrucLure),
(b) fosLerlng more communlLy-based Leachers wlLh an emphasls on Lralnlng
locals,
(c) parLnerlng wlLh sLaLe educaLlonal foundaLlons Lo ensure all chlldren recelve a
baslc school sLarLer klL lncludlng shoes, unlform, books, sLaLlonery, eLc. along
Lhe llnes of ?ayasan Sabah,
(d) lnLroduclng a vlllage schoollng allowance,
(e) lnsLlLuLlng a needs-based scholarshlp fund for Sabahans, Sarawaklans and
Crang Asal along Lhe llnes of Lhe ?ayasan enera[u endldlkan 8umlpuLera.

Sub-Sect|on 4.2: kev|ew of Nat|ona| Lducat|on o||c|es

lollowlng our commlLmenL ln our ManlfesLo Parapan 8akyaL, 1,834 Sekolah !anaan
8akyaL (vernacular schools) across Lhe counLry wlll recelve addlLlonal asslsLance
(besldes Lhe exlsLlng conLrlbuLlon Lowards Lhe operaLlng cosLs) accordlng Lo Lhe
number of puplls, aL 8M300 per sLudenL each year, lnvolvlng an allocaLlon of 8M220
mllllon. 1hls addlLlonal asslsLance ls an lnvesLmenL by akaLan 8akyaL Lo lmprove Lhe
quallLy of educaLlon ln Lhese schools, whlch lncludes cosLs of bulldlng expanslons as
well as lmprovlng Lhe lnfrasLrucLure and faclllLles
32
1echnlcal and vocaLlonal educaLlon ls a caLalysL for naLlonal growLh. 1echnlcal and
vocaLlonal Schools aL secondary level musL possess Lhe capaclLy Lo wlLhsLand change
and produce workers wlLh quallLy. 1herefore akaLan 8akyaL alms Lo bulld flve
1echnlcal and vocaLlonal Schools aL Lhe secondary level (Lhree ln enlnsular
Malaysla, one ls Sabah and one ls Sarawak) as a plloL pro[ecL Lo enhance faclllLles and
[olnL venLures wlLh Lhe prlvaLe secLor Lo provlde [ob opporLunlLles. A LoLal of 8M100
mllllon wlll be allocaLed as a whole, or 8M20 mllllon per school.
lree LerLlary level educaLlon ls Lhe responslblllLy of Lhe governmenL ln order develop
Lhe nexL generaLlon of responslble, educaLed, and empowered clLlzens. akaLan
8akyaL remalns commlLLed Lo provldlng free LerLlary educaLlon, ln llne wlLh
ManlfesLo akaLan Parapan 8akyaL, and as such plans Lo allocaLe 8M6 bllllon per
year Lo Lake over all 11n debL (8M2 bllllon), supporL 10 of Lhe cosL ln publlc
LerLlary-level educaLlonal lnsLlLuLlons (8M600 mllllon), cosL of llvlng allowance for
300,000 sLudenLs (8M2.3 bllllon) and a fund for prlvaLe LerLlary-level educaLlonal
lnsLlLuLlons (8M900 mllllon).
LducaLors Loo play a key role ln ensurlng Lhe success of Lhe naLlon's educaLlon
pollcles. 1he governmenL musL ensure Lhe quallLy and welfare of educaLors so LhaL
Lhls segmenL remalns commlLLed Lo Lhelr professlon. akaLan 8akyaL wlll employ Lwo
approaches for Lhls ob[ecLlve:
(a) esLabllsh a '1eacher 8ecrulLmenL unlL & SpeclallsL 1eam' (18uS1) speclal
commlLLee ln each sLaLe Lo selecL Leachers from Lhe Lop 30 of each cohorL.
8M10 mllllon a year wlll be allocaLed for Lhls,
(b) a speclal Leacher's allowance of 8M300 per monLh, LoLalllng 8M2.4 bllllon per
annum.

1o ralse Lhe bar of educaLlon ln rural areas, a speclal program Lo Lraln 'communlLy
Leachers' among Lhe orang Asll and ln Lhe lnLerlor areas ln Sabah & Sarawak wlll be
esLabllshed. akaLan 8akyaL proposes Lo seL aslde 8M10 mllllon a year for Lhls
programme wlLh 10 plloL pro[ecLs ln Lhe lnlLlal years.
1o enhance Lhe educaLlon sysLem for speclal needs chlldren, flagshlp speclal needs
school wlll be esLabllshed. akaLan 8akyaL wlll allocaLe 8M20 mllllon for Lhe
esLabllshmenL of one prlmary and one secondary of such school.

Sub-Sect|on 4.3: revent|on of Non-Commun|cab|e D|seases

ln 2010, nearly 33,000 Malayslans dled due Lo hearL dlsease (prlmary cause) and
sLroke (secondary cause) whlle Lhousands more became dlsabled as a resulL of
compllcaLlons arlslng from non-Communlcable ulseases (nCus). Slnce nCus pose
among Lhe greaLesL healLh LhreaLs ln Malaysla Loday, akaLan 8akyaL proposes free
mass screenlng for rlsk facLors for nCus for Malayslans aged 33, followed by
approprlaLe counsellng and follow-up measures. ueLecLlng dlseases early and
prevenLlng compllcaLlons wlll noL only save llves buL also ln Lhe long-Lerm, Lhe huge
poLenLlal Lo save a loL of money, Llme and efforLs as well as Lo prevenL early losses of
33
LalenLs.

1he rlsk facLors and dlagnoses for mosL nCus such as obeslLy, dlabeLes, hyperLenslon,
and hearL dlsease, among oLhers, could be esLabllshed vla a slmple screenlng:
medlcal hlsLory, welghL, blood and urlne LesL. As such, lL ls relaLlvely slmple and
economlcal Lo do a mass screenlng of populaLlon aL rlsk. 1he age of 33 ls chosen
because of Lhe observaLlon LhaL hearL dlsease, sLroke and kldney fallure are now
affecLlng more and more people ln Lhelr laLe 30s. 8esldes, mosL cases of hearL aLLack
and sLroke occur ln Lhe age group of 43 Lo 63 years old. Slnce lL Lyplcally Lakes
around 10 years for Lhe compllcaLlons Lo develop, deLecLlng and LreaLlng obeslLy,
dlabeLes, hyperLenslon, eLc, screenlng aL Lhe age of 33 could prevenL Lhe
developmenL of such compllcaLlons.

1o underLake Lhls programme, an esLlmaLed 300,000 Malayslans aged 33 ln 2014 wlll
be lnvlLed for screenlng aL any governmenL faclllLles. 1he exerclse should be able Lo
ldenLlfy 43,600 dlabeLlcs or poLenLlal dlabeLlcs (abouL 13.2 ln Malaysla), 60,000
hyperLenslve (20), 60,000 obese lndlvlduals (20). SubsequenLly, counsellng and
medlcal lnLervenLlons, among oLhers, should go a long way ln prevenLlng
developmenL of nCus and compllcaLlons ln Lhe long run.

Assumlng a LoLal cosL of 8M100 per person for hlsLory, physlcal examlnaLlon, blood,
urlne LesLs plus dlscusslon of examlnaLlon resulLs, Lhls programme would cosL Lhe
governmenL 8M30 mllllon for 300,000 lndlvlduals.

Sub-Sect|on 4.4: Suhakam's Ind|genous Land kecommendat|ons

MlnorlLy (non-Malay) 8umlpuLeras are amongsL Malaysla's mosL marglnallsed
communlLles and on average fare poorer ln schoollng, houslng, lncome and baslc
amenlLles. A slgnlflcanL proporLlon of Lhls grouplng ls comprlsed of Crang Asll and
Crang Asal (13.8 of LoLal Malayslan populaLlon). uue Lo Lhelr sLrong dependence
on Lhe land for Lhelr llvellhoods and culLure, Lhe numerous land problems faced by
Malaysla's lndlgenous peoples have a negaLlve lmpacL on Lhelr well-belng.

ln llne wlLh Lhe recommendaLlons of Suhakam's recenLly compleLed naLlonal lnqulry
on Lhe Land 8lghLs of lndlgenous eoples, Lhe akaLan 8akyaL recommends an
lmmedlaLe budgeL allocaLlon Lo esLabllsh Lhe followlng:
(a) An lndependenL naLlonal Commlsslon on lndlgenous eoples LhaL would look
lnLo Lhe effecLlve recognlLlon, promoLlon and proLecLlon of Crang Asal rlghLs
Lo land and ldenLlLy. 1hls would lnvolve a Llme-bound, broad-based
afflrmaLlve acLlon approach LhaL promoLes lndlgenous peoples' developmenL
and well-belng, and close Lhe gap wlLh oLher secLlons of Lhe Malayslan
socleLy.
(b) An lndlgenous Land 1rlbunal Lo declde on land complalnLs.
(c) An lndependenL Cmbudsman Lo medlaLe land dlspuLes beLween and
amongsL lndlgenous peoples and communlLles. Success of Lhe Cmbudsman
would relleve Lhe burden on Lhe courLs and leave Lhem as a lasL resorL.
34
(d) CapaclLy enhancemenL Lralnlng for all land relaLed deparLmenLs l.e. Lands
and Surveys ueparLmenL (Sabah & Sarawak) and Lhe ueparLmenL of Land and
Mlnes (enlnsular Malaysla) Lo enable Lhem Lo engage more senslLlvely wlLh
lndlgenous peoples and respecL Lhelr land rlghLs as recommended ln Lhe
Suhakam 8eporL and conslsLenL wlLh lnLernaLlonal human rlghLs norms.
(e) A CompensaLlon and Land 8esLoraLlon lund.

Sect|on 4.S: o||c|es on Lnv|ronment

Natura| kesources Account|ng (NkA), closely relaLed Lo envlronmenLal-economlc
accounLlng, ls a way of recordlng Lhe economlc value of naLural resources boLh Lo
Lrack depleLlon as well as Lo measure Lhe value of 'ecosysLem servlces' provlded such
as how foresLs dellver blodlverslLy, carbon sequesLraLlon, fresh alr and waLer
caLchmenL servlces. LnvlronmenLal accounLs are all encompasslng, coverlng
resources as well as envlronmenLal lssues whlle Lhe n8A generally elaboraLes
speclflc asseLs of a counLry's naLlonal balance sheeLs LhaL may be parLlcularly
lmporLanL ln a counLry more Lhan ln oLhers. Accordlng Lo Lhe unlLed naLlons'
SLaLlsLlcs ulvlslon, waLer, energy, maLerlal flows (for example generaLlon of wasLe
and reslduals) and flsherles are among some of Lhe ma[or componenLs of Lhe n8A.

ConLlnulng wlLh Lhe example of foresLs, Lhelr conLrlbuLlon Lowards dellverlng waLer
caLchmenL and Lhus naLlonal waLer supplles ls currenLly undervalued or more
correcLly, ls valued aL zero. 1hls represenLs a serlous omlsslon ln naLlonal accounLlng.
lL ls harder for federal and sLaLe governmenLs as well as Lhelr agencles Lo make
accuraLe and responslble declslons abouL opporLunlLy cosLs wlLhouL such resource
assessmenLs.

akaLan 8akyaL proposes LhaL Lhe Lu, Lhe ueparLmenL of SLaLlsLlcs and Lhe
AudlLor-Ceneral's ueparLmenL work LogeLher wlLh federal mlnlsLrles and sLaLe
economlc plannlng unlLs Lo lncorporaLe n8A lnLo Lhelr accounLlng process.

akaLan 8akyaL also proposes Lhe esLabllshmenL of Lhe LIA Iund, a zero-cosL bllnd
fund admlnlsLered by Lhe ueparLmenL of Lhe LnvlronmenL (uCL) lnLo whlch
developers pay Lhe cosLs for preparlng envlronmenLal lmpacL assessmenL (LlA)
reporLs on Lhelr developmenL pro[ecLs. An LlA ls an assessmenL of Lhe posslble
lmpacLs LhaL a proposed pro[ecL may have on Lhe envlronmenL, conslsLlng of Lhe
envlronmenLal, soclal and economlc aspecLs. 1he uCL pays reglsLered envlronmenLal
lmpacL consulLanLs uslng Lhls fund. 1hls pracLlce wlll help lmprove Lhe accounLablllLy
and lnLegrlLy of LlAs as developers no longer dlrecLly pay for Lhelr own LlAs, lnsLead
paymenL ls made vla a sLaLuLory body wlLh a flduclary duLy Lo Lhe publlc.

33
1nkUS1 IV: UNLLASnING MALASIA'S 1kUL C1LN1IAL AND
LNnANCING I1S LCNG-1LkM CCML1I1IVLNLSS

As Malaysla moves from a commodlLy and low-end manufacLurlng-based economy
Lo a economy drlven by hlgh value-added manufacLurlng and servlces, Malaysla musL
up Lhe anLe ln promoLlng lnnovaLlon, creaLlvlLy, value creaLlon and enLrepreneurshlp
ln order Lo ralse Lhe long-Lerm underlylng poLenLlal of Malaysla's economlc growLh
Lo a susLalnable pace of beLween 6-7.

Sect|on 1: romot|ng Innovat|on, Creat|v|ty, Va|ue Creat|on and
Lntrepreneursh|p

akaLan 8akyaL relLeraLes lLs commlLmenL Lo provldlng a conduclve and enabllng
envlronmenL for buslnesses Lo Lhrlve ln order Lo make Malaysla a compeLlLlve and
vlable lnvesLmenL desLlnaLlon and Lo creaLe a vlbranL buslness communlLy by:
(a) underLaklng economlc, sLrucLural, lnsLlLuLlonal, pollLlcal, soclal and law
reforms as parL of akaLan 8akyaL's reformlsL agenda Lo ralse Malaysla's
long-Lerm underlylng growLh Lrend compeLlLlveness whlle ensurlng greaLer
Lransparency, accounLablllLy, governance and lnLegrlLy,
(b) furLher llberallslng Lhe economy Lo be conduclve Lo buslness wlLhouL
lmposlng hardshlp on Lhe rakyaL, ln parLlcular Lhe poor, Lhe underprlvlleged
and Lhe marglnallzed,
(c) redeflnlng governmenL lnLervenLlon and raLlonallslng lLs presence ln Lhe
buslness sphere vla CLCs, whlch has been one of Lhe ma[or causes of
lacklusLre prlvaLe enLerprlse ln Malaysla,
(d) dlsmanLllng monopolles/ollgopolles/carLels and revlewlng lopslded
concesslon agreemenLs,
(e) consLanLly looklng for ways Lo lower Lhe cosLs of dolng buslness ln Malaysla
vla provlslon of a human caplLal pool wlLh adequaLe knowledge, skllls and
compeLencles LhaL respond Lo buslness needs of mosL lndusLrles, adequaLely
prlced Larlffs for uLlllLles and efforLs Lo dlglLallse Lhe economy,
(f) revlewlng exlsLlng Lax and non-Lax lncenLlves for buslnesses Lo ensure more
equlLable and effecLlve wealLh Lransfers whlle promoLlng growLh-enhanclng
and susLalnable lndusLrles for lncluslve and susLalnable economlc growLh,
(g) slmpllfylng buslness processes and procedures Lo reduce red Lape and
sLreamllne cumbersome regulaLlons as parL of Lhe servlce dellvery
enhancemenL by boLh Lhe publlc and prlvaLe secLors, and,
(h) eradlcaLlng of sysLemlc lnefflclency and corrupL pracLlces, renL-seeklng
culLure and choklng cronylsm.

Clven Lhls commlLmenL by a akaLan 8akyaL federal governmenL and a new
economlc sLrucLure LhaL emphaslses Lhe value of work and Lhe lmporLance of
producLlvlLy, as a falr Lrade-off, buslnesses have Lo do Lhelr parL by creaLlng
hlgh-paylng [obs Lo meeL our goals of becomlng a hlgh-lncome, developed naLlon ln
36
lLs Lrue sense and achlevlng a mlnlmum household lncome of 8M4,000 by
lmplemenLlng Lhe mlnlmum wage pollcy and revlewlng accordlngly Lhe exlsLlng sLaff
salary sLrucLure and compensaLlon packages.

Sect|on 2: Support|ng SMLs as the 8ackbone of the Lconomy

ManlfesLo akaLan Parapan 8akyaL for CL13 conLalned several measures LhaL
conLrlbuLe Lo SML developmenL:
o LsLabllshmenL of Lhe Mlnlmum Wage lmplemenLaLlon laclllLaLlon lund
worLh 8M2 bllllon Lo asslsL buslnesses, especlally SMLs, ln lmplemenLlng
Lhe Mlnlmum Wage ollcy Lhrough auLomaLlon lncenLlves and mlnlmum
wage lmplemenLaLlon granLs for a speclfled perlod,
o LsLabllshmenL of Lhe naLlonal lnnovaLlon lund worLh 8M300 mllllon Lo
sLrengLhen Lhe copyrlghL lndusLry and Lhe ldea bank as well as Lo
promoLe Lhe commerclallsaLlon of ldeas and lnvenLlons,
o new SML pollcy Lo coordlnaLe and promoLe flnanclng Lo SMLs by
flnanclal lnsLlLuLlons, as well as a revlew of Lax lncenLlves Lo shlfL Lhe
focus of asslsLance from large companles Lo SMLs, especlally mlcro-slzed
and small esLabllshmenLs,
o LsLabllshmenL of Lhe MlllLary veLerans' Small LnLrepreneur wlLh an lnlLlal
allocaLlon of 8M300 mllllon Lo asslsL Lhe parLlclpaLlon of ex-soldlers ln
economlc acLlvlLles

akaLan 8akyaL remalns commlLLed Lo furLher developlng Lhe SML lndusLry by
explorlng Lhe followlng ldeas:
o SeLLlng up cooperaLlves speclflcally Lo help SMLs markeL Lhelr producLs,
expand organlcally, lncrease Lhelr markeL shares and boosL Lhelr
earnlngs,
o CLher forms of asslsLance Lo help SMLs come up wlLh an effecLlve
markeLlng sLraLegy compleLe wlLh lnlLlaLlves for promoLlon, adverLlslng
and brandlng because only by showcaslng unlqueness, creaLlvlLy and
lnnovaLlveness can SMLs compeLe successfully ln Lhe open markeL, aL
home and abroad,
o lnlLlal lnnovaLlon vouchers worLh beLween 8M23,000 and 8M30,000 for
SMLs Lo embark on Lhelr pro[ecLs, and,
o Lnhanclng mechanlsms Lo ensure greaLer coordlnaLlon and collaboraLlon
beLween SMLs and flnanclal lnsLlLuLlons oLher Lhan Lhe CredlL CuaranLee
CorporaLlon Malaysla 8erhad (CCC), Malayslan lndusLrlal uevelopmenL
llnance (Mlul), and SML 8ank.

37
Sect|on 3: Un|ock|ng the otent|a| of outh - Address|ng outh
Unemp|oyment

akaLan 8akyaL proposes measures LhaL wlll: enhance Lhe employablllLy and
markeLablllLy of youLh ln Lhe 13-29 age brackeL ln order Lo reduce Lhe mlsmaLch of
knowledge, skllls and compeLence, help Lhem make beLLer-lnformed declslons abouL
Lhelr fuLure by lmprovlng accesslblllLy Lo lnformaLlon abouL [ob avallablllLy and
fuLure careers, and lnLroduclng a dual" Lralnlng and work experlence programme,
provldlng exposure Lo Lhe worklng world:
(a) organlse career guldance programmes for youLh aL schools, vocaLlonal
Lralnlng lnsLlLuLes, and hlgher learnlng lnsLlLuLlons ln collaboraLlon wlLh
fuLure employers and educaLlon provlders,
(b) encourage all publlc and prlvaLe secLor employers Lo provlde
pracLlcal/lndusLrlal Lralnlng or lnLernshlp programmes such as "sLudenL
adopLlon programmes" as parL of Lhelr corporaLe soclal responslblllLy (CS8)
agenda Lo enable Lhe youLh Lo, whlle sLlll sLudylng:
o galn exposure Lo Lhe worklng world and hands-on experlence, and,
o muLually share knowledge ln a Lwo-way learnlng process Lhrough
menLorlng and oLher on-Lhe-[ob Lralnlng modules,
(c) organlse naLlonal-level [ob falrs on a regular basls as a plaLform for youLh of
all educaLlon backgrounds and levels Lo look for [ob opporLunlLles,
(d) seL up "[ob cenLres" aL each dlsLrlcL Lo faclllLaLe [ob placemenLs,
(e) organlse enLrepreneurlal workshops speclflcally Lallored Lo develop young
enLrepreneurs,
(f) esLabllsh closer cooperaLlon wlLh speclallsed flnanclal lnsLlLuLlons such as
SML 8ank Lo glve ouL mlcro-credlL as seed caplLal for youLh Lo sLarL a vlable
buslness venLure,
(g) offer Lax and non-Lax lncenLlves Lo SMLs/mlcro-enLreprlses, medlum-slzed
companles or blg corporaLlons Lo encourage youLh employmenL and enhance
greaLer parLlclpaLlon of Lhe youLh ln Lhe workforce such as double Lax
deducLlon for companles LhaL hlre Lhe local youLh and Lraln Lhem Lo reduce
over-rellance on forelgn workers,
(h) lnsLlLuLe a mlndseL change among educaLlon provlders so as noL Lo focus Loo
much on paper quallflcaLlons buL spend more efforLs ln preparlng sLudenLs Lo
face Lhe reallLy of whaL Lhe [ob markeL ls looklng for -- Lhe rlghL Lechnlcal
skllls, Lhe rlghL sofL skllls and Lhe rlghL aLLlLude ln order Lo land a [ob ln Lhelr
flelds of sLudy, and,
(l) push for educaLlon reforms especlally aL Lhe LerLlary level Lo produce
graduaLes LhaL meeL Lhe needs of Lhe naLlon Lo [usLlfy Lhe hlgh-paylng [obs
and puL a sLop Lo experlmenLaLlon of Lhe naLlonal educaLlon sysLem.

An lnlLlal 8M30 mllllon wlll be allocaLed Lo lmplemenL Lhese youLh employmenL
measures ln phases wlLh Lhe ob[ecLlve of reduclng Lhe youLh unemploymenL raLe Lo
around Lhe naLlonal unemploymenL raLe of 3.

Pakatan Rakyat Budget 2014-EnG

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