The Federation of Malaysian Manufacturers (FMM) commends YB Minister of Finance and the Government for tabling an excellent maiden budget which is comprehensive, inclusive and would reset the economy towards a firm and robust footing paving the way for future growth. Despite the difficult financial position, it is heartening that the Government has managed to maintain development expenditure to foster growth. In addition, sufficient grants and incentives have also been provided, mainly towards the adoption of new technologies of Industry 4.0, human capital development, promoting entrepreneurship, innovation and R&D, all of which are essential to achieve our ambition of a high income country.
Resetting the Economy
FMM supports the Government’s continuous commitment towards strengthening institutions, improving governance and minimising corruption. Zero-based budgeting is a step in the right direction towards prudent fiscal management. We also look forward to the implementation of the Fiscal Responsibility Act and Government Procurement Act, which would greatly enhance the confidence of investors.
Creating the Ecosystem to Implement & Support Industry 4.0
FMM thanks the Government for supporting the industry’s transition into Industry 4.0, especially with a special allocation for SMIs. The Budget incentives, which includes the creation of a RM3 billion Industry Digitalisation Transformation Fund, would help to create a comprehensive ecosystem covering human capital development and technology adoption to facilitate implementation of the National Policy on Industry 4.0.
FMM’s Wishlist Fulfilled
Specifically for the manufacturing sector, FMM thanks the Government for heeding our calls and taking up our proposals in the following areas:
Providing relief from Service Tax on taxable services to manufacturers and introducing a credit system for small companies to obtain inputs from non-registered businesses – FMM would appreciate if more details on the credit system mechanism as this could help to reduce double taxation;
A 1% reduction in corporate taxation rate for SMIs from 18% to 17%, which would help to mitigate the rising costs of doing business;
FMM is pleased to note that the Government has heeded our call to promote Buy Made-in-Malaysia and allocated funds for a promotion campaign which is the first time that this has been done. FMM looks forward to the enforcement of Buy Made-in-Malaysia in government procurement to reinforce support and confidence in locally manufactured products which meet quality standards;
Formation of a Task Force to drive regulatory reforms to ensure a more business friendly environment through improved business processes and tax administration;
Taking action to evaluate and redefine the role of Government in business to remove crowding out and allowing private sector to lead and grow the economy;
Making available the resources and facilities of TVET training institutes, including offering courses run by the private sector;
Ensuring more affordable fixed broadband through the National Fibre Connectivity Plan, which is expected to reduce prices by at least 25% – FMM hopes to receive confirmation that the price reduction is also applicable to businesses and should give priority towards better connectivity in industrial estates;
Extending the Green Technology Financing Scheme for another five years through an allocation of RM2 billion, which would encourage industries to step up investments in energy efficiency, renewable energy and waste minimisation initiatives contributing to a sustainable future for Malaysia.
FMM also welcomes the conversion of land in Pulau Indah into a Free Trade Zone to support and catalyse increased shipping and logistics activities in Port Klang. FMM believes this move would boost the development of export-oriented activities, create job opportunities and increase demand for real estate development closer to the port area.
Dato’ Soh Thian Lai
President, Federation of Malaysian Manufacturers