These included a re-introduction of the goods and services tax (GST), channelling the foreign worker levy to support technical and vocational education and training (TVET), and trade incentives to support domestic recovery.
“We are disappointed the government did not take up (our) proposal to channel the foreign worker levy towards setting up a National TVET Apprenticeship Fund and National Automation Fund as a two-pronged approach to reduce dependence on foreign workers,” FMM president Soh Thian Lai said.
Nevertheless, FMM understood the challenges faced by the finance ministry in deciding budget allocations during a time of economic hardship.
“On balance, FMM feels the scope for fiscal restraint is limited and a budget that protects the well-being of the rakyat is warranted,” he said.
Areas of improvement
FMM is supportive of the RM100 million allocation for the SME and micro-traders’ digitalisation scheme, offering a matching grant of up to RM5,000 for the use of digital tools.
Noting SMEs’ low level of digital adoption, Soh said this was a good start on the part of the government.
“However, it would be more impactful if a grant of at least RM200,000 per company could be allocated under this scheme,” he said.
Another budget policy that FMM found to have fallen short of being impactful is the reduction in taxable income from 17% to 15% for the first RM150,000 for SMEs.
“We recommend it should be for the first RM600,000 in order for a more significant impact in improving SMEs’ financial standing in anticipation of an uncertain global economic environment,” he said.
Soh also pushed for faster 5G implementation and a review of its connectivity strategies, with an emphasis on industrial areas.
Meanwhile, though not all of the association’s proposals made it into the budget, he said an old request from 2019 had been included.
“The move to expedite the implementation of the long overdue Government Procurement Act is welcomed to support business and economic revival. FMM requests the policy to include states and government-linked companies (GLCs),” he said.
FMM believes the enactment of the Government Procurement Act will spur more domestic market demand for Malaysian-made products, particularly from the public sector.