BUDGET 2018 - FMM says Budget 2018 covers all economic sectors, segments of population

PETALING JAYA: The Federation of Malaysian Manufacturers (FMM) commends the government for tabling a very broad-based budget, covering practically all economic sectors as well as all segments of the population.
The manufacturing sector in particular is pleased that a lot of emphasis has been given to industry, trade, Industry 4.0, the digital economy, education and training, it said in a statement.
"It is also reassuring to note that the government has kept the budget deficit to 3% and has committed to further reduce to 2.8% in next year's Budget."
FMM said the Budget initiatives to invigorate investment, trade and industry are most welcomed by the manufacturing sector, particularly for SMEs and trade promotion, which included topping up funds for: financial assistance schemes to further strengthen SMEs; export acceleration programmes, including the Market Development Grant; and encouraging alternative sources of fund for SMEs through venture capital.
In addition, it said the government's measures in encouraging youths to emphasise education in Science, Technology, Engineering and Mathematics (STEM) is in line with the manufacturing sector's call for more technically competent manpower.
Moreover, it said requiring private companies which have secured government contracts to allocate 1% of their contract value to the Skim Latihan 1Malaysia (SL1M) would allow more graduates to receive industrial training and enhance their employability.
Furthermore, FMM said it fully supports the government's programme to allocate RM4.9 billion to implement the TVET Malaysia Masterplan as well as the merger of all TVET institutions as TVET Malaysia.
FMM said the latter is also on its Budget wishlist to overcome fragmentation by placing TVET under a single champion agency.
"FMM hopes that all relevant stakeholders including the FMM are consulted on the Masterplan."
Meanwhile, the federation said the matching grants and tax incentives for smart manufacturing, automation and digital technologies would help to reduce the cost of implementing Industry 4.0 technologies for manufacturers.
Its wishlist had also called for a RM1 billion transformation fund and the setting up of Industry 4.0 centres. The incentives for green technology financing as well as efforts to resolve the non-revenue losses were also on its Budget wishlist.
However, FMM said it had hoped that the Budget could have included the extension of the reinvestment allowance, which is expiring in 2019, which it hoped that the government would consider for the 2019 Budget.
FMM added that the manufacturing sector is of the view that reducing the corporate tax rates would make Malaysia as competitive as neighbouring countries such as Hong Kong which has a corporate tax rate of 17%, with Singapore (18%), Thailand (20%) and Vietnam (20%).