KUALA LUMPUR (Oct 13): Top leaders of the banking institution have by and large commended the newly tabled Budget 2024 as one that demonstrates the government's resolve towards fiscal prudence, while addressing its people's needs, with an eye on sustainably lifting the country's growth.
Below are excerpts of the bankers' comments:
Datuk Khairussaleh Ramli
Group president and CEO, Maybank Bhd
Budget 2024 tabled by the prime minister is comprehensive and inclusive, with emphasis on sustainable economic growth and being pro-rakyat, in support of the Madani Economy, and the various policies and roadmap announced recently. We applaud the reinforced commitment towards fiscal discipline with a target of reducing the fiscal deficit to 4.3% next year.
The budget also aims to navigate the country through a new economic direction by alleviating cost of living, creating jobs, boosting global competitiveness and supporting a conducive investment climate. The intent to further support the underserved and unserved sustainably is clear, and we welcome the proposed increase in tax exempt spend to 35% to encourage greater social impact programmes.
The allocation of an additional RM10 million to enhance the effectiveness of the National Scam Response Centre (NSRC) is highly important. The banking industry is committed to working closely with Bank Negara Malaysia (BNM) on the setting up of a national fraud portal by mid-2024, where key data collected can be used to detect patterns and connections between the accounts used by scammers.
The initiative to develop the National Digital Identity will spur digital economic activities in the country and will certainly boost financial transactions and payment activities, apart from promoting greater efficiency and enhanced security for digital transactions. Banks are committed to participating actively in this initiative.
In addressing climate resiliency, the budget remains steadfast in prioritising renewable energy, green technologies and conservation efforts that support sustainable economic growth while ensuring a liveable environment for future generations.
The realisation of the National Energy Transition Roadmap (NETR) is certainly being prioritised, with the government and financial institutions coming together to provide financing of some RM200 billion to businesses as we continue Malaysia’s push towards a just transition towards a net-zero economy. We also welcome the allocation of the RM2 billion National Energy Transition Facility fund to facilitate this and the possible issuance of a RM1 billion biodiversity sukuk towards carbon credits.
Helping the MSMEs continues to be emphasised with financing and guarantee schemes to the tune of RM44 billion.
Datuk Abdul Rahman Ahmad
Group CEO, CIMB Group
We are pleased to see the Malaysian government’s continued focus on driving sustainable economic growth through the 2024 federal budget, the second Madani Budget. The budget forms a strong foundation towards achieving Malaysia’s long-term goals of safeguarding the rakyat’s wellbeing and strengthening the country’s business ecosystem within an increasingly volatile global macro-economic environment.
In accelerating economic growth, we are encouraged to see measures to support micro, small, and medium enterprises (MSMEs) as well as supporting the start-up ecosystem. In addition, we laud the focus on environmental sustainability and food security with specific allocation for MSMEs that operate within these two crucial areas. This will help support their growth and resilience, and subsequently futureproof the socioeconomic wellbeing of all Malaysians.
As a leading Islamic finance player, CIMB also supports the government’s focus on driving more active market participation as well as equitable distribution of wealth among the rakyat through value-based intermediation.
With the ongoing efforts by the financial industry to combat scams, we welcome the government’s continued commitment to combat financial scams by doubling the allocation for the National Scam Response Centre (NSRC) to RM20 million and the establishment of the National Fraud Portal (NFP) that will expedite the process of freezing and the repatriation of funds. CIMB remains committed to undertaking all necessary measures to further support and strengthen banking security and work together with the relevant authorities and our customers to combat scams collectively.
Overall, the announced budget suitably balanced fiscal responsibility with supporting growth and meeting rakyat’s needs.
Accordingly, CIMB is committed to collaborate with stakeholders across the private and public sectors and civil society in supporting the ambitions set out in the Malaysia MADANI Budget 2024 to create an inclusive and resilient economy that will help all Malaysians
to thrive in an ever-challenging landscape.
Tan Sri Datuk Seri Tay Ah Lek
Group managing director and CEO, Public Bank Bhd
While Budget 2024 will see a total expenditure bill of RM393.8 billion, the government’s resolve on continuing to champion fiscal prudence is to be applauded. Balancing the diverse needs of all can be a tall order. The government’s success in achieving this with Budget 2024 should therefore be commended.
Issues like high living costs, implementation of socio-economic measures to uplift the poor and low-income groups, empowerment of small-scale businesses, economic reforms, promotion of investments, enhancement of food security, affordable housing, improvement of basic public infrastructure and essential public services were addressed, amongst many others.
For those in need, various social assistance frameworks have been strengthened through wealth reallocation from subsidy rationalisations. With an estimated 20% of the M40 group having fallen into the B40 category due to the Covid-19 pandemic, it is imperative that social safety nets be widened. On this note, allocation to the Sumbangan Tunai Rahmah (STR) initiative will be increased to RM10 billion from RM8 billion, benefitting nine million recipients. For 2024, a total of RM58.1 billion will be set aside for the purpose of financing various aids to the rakyat, encompassing subsidies, incentives and financial aid.
Climate-related issues will be at the forefront of many decisions in the years ahead. Studies have shown Malaysia to be amongst the most vulnerable regions in Southeast Asia to the effects of climate change. Inaction is no longer an option.
The government’s pioneering plan for a RM1 billion biodiversity-based sukuk is a welcome move. The Public Bank Group is well underway in embarking on sustainability-based initiatives, reducing carbon emissions from our operations and undertaking responsible lending practices, amongst others.
Budget 2024 adequately addresses the needs of today for the challenges of tomorrow, and is broad-based. We continue to be fully supportive of the government’s initiatives in this well thought-out plan which will continue to strengthen the country’s economic fundamentals, while enhancing the well-being of the Rakyat.
Mohd Rashid Mohamad
Group managing director and group chief executive officer, RHB Banking Group
We commend the expansionary focus of Budget 2024, which promises essential support for strengthening the economy, enhancing business competitiveness, elevating the rakyat’s living standards, and maintaining fiscal prudence. This commitment aligns well with the improving global economic momentum expected in the coming year.
The government's steadfast dedication in striking a balance between economic development and fiscal sustainability is noteworthy. This approach will ensure that the nation will prosper while safeguarding financial stability.
The goal of transforming the nation into an Islamic investment hub is a commendable move as it will attract investments to stimulate economic growth and is very well aligned with the theme of "Economic Reformation, People Empowerment".
We will support the government aspirations under the National Energy Transition Roadmap (NETR) towards net carbon zero emissions by 2050 and will continue to play a significant role in elevating the nation's economic growth and development, particularly the growth of SMEs and driving financial inclusivity among the underserved segments by providing access to financial services that are digital secure and nimble.
Kevin Lam
Group managing director and CEO, Hong Leong Bank Bhd
We are very encouraged to see the follow-through announcement of additional details and actionable plans outlined in Budget 2024, covering not only the welfare of the rakyat, but also enhancing the micro, small and medium enterprises ecosystem, strengthening the Islamic banking positioning, combating financial scam and fraud incidences and providing welcoming policies to attract FDIs.
This could serve as a solid foundation to propel Malaysia towards meeting the New Industrial Master Plan 3 and the mid-term review of the 12th Malaysia Plan, contributing significantly to the long-term sustainability of the Malaysian economy.
As a community bank, we are also pleased to see the government’s dedicated commitment to fortify the SME ecosystem through an array of ongoing tax and non-tax incentives, coupled with financing grants that are poised to significantly bolster the competitiveness of SMEs within the global value chain.
This will pave the way towards doubling the share of export-oriented SMEs to 25% of vendor development by 2030, and lifting the share of domestic value added in manufacturing to 65% by the same timeframe. We believe this will strengthen the Malaysian economy in general as SMEs account for about 37% of Malaysia's GDP and offer about two-thirds of employment.
The government’s steadfast sustainability-related efforts, especially its commitment towards net zero by targeting to reduce CHG emission intensity to 45% by 2030, will set the tone for the nation as a whole. We are pleased to see the extension of RM2,500 personal income tax exemption for those who own electric vehicle charging facilities for up to four years, and the tax exemption for those who rent electric vehicles extended for two years. HLB will continue to support the sustainability journey of the nation through our robust green financing offerings.
In summary, we are positive the proposed budget initiatives will set the stage for longer-term sustainability of the Malaysian economy by addressing some long-standing economic and fiscal challenges.
Datuk Sulaiman Tahir
Group CEO, AMMB Holdings Bhd
Striking a balance between addressing immediate economic challenges and laying the groundwork for sustainable growth, Budget 2024 reflects the government’s commitment to strengthening the nation's socioeconomic development and driving long-term resilience and prosperity. Crucially, the target to narrow the budget deficit from 5% to 4.3% of GDP is indeed a welcome step in terms of enhancing the nation’s financial health.
Recognising the pivotal role of small to medium enterprises (SMEs) in economic growth, the allocation of RM44 billion which will go towards loans and credit guarantees for SMEs is set to further empower and enhance their competitiveness. With RM2.4 billion earmarked for micro-entrepreneurs and small traders through agencies such as Bank Negara Malaysia (BNM), Bank Simpanan Nasional and Tekun, this is expected to spur greater opportunities and ease the financial burden of SMEs, which is certainly timely amid the current economic volatility.
Supporting this, the allocation of additional funds of up to RM25 million in matching grants with financial institutions under the existing i-Tekad social finance programme is set to benefit more entrepreneurs. Alongside this, the RM900 million loan funds available under BNM will unlock potential for SMEs to move up the global value chain and increase productivity through automation and digitalisation.
Furthermore, the government’s focus on Environmental, Social, and Governance (ESG) principles reflects a forward-looking approach that integrates sustainability into economic policies. The allocation of RM2 billion for NETR charts a strategic course towards a more sustainable future for Malaysia. This is complemented by financing funds of RM200 billion by financial institutions, providing further impetus for industries to transition towards a low-carbon economy.
Indeed, Budget 2024 is exceptionally people-centric and timely.
Datuk Wan Razly Abdullah
President and group CEO, Affin Bank Bhd
We view Budget 2024 as expansionary and prudent, incorporating measures to support consumer spending and offer a series of measures to assist vulnerable household groups, alongside substantial allocation for development expenditure as well as ongoing people-centric infrastructure projects.
Budget 2024 also focuses on improving the people’s wellbeing through strategies that generate growth for the country’s prosperity.
We believe the budget is prudent as the federal government seeks to navigate a balance between re-establishing fiscal stability and promoting economic development.
We welcome the RM350 million allocation by the government for the promotion and marketing of our tourism industry, including Visit Malaysia 2026. Amongst other measures on tourism is the relaxation of Malaysia My Second Home (MM2H) programme conditions. The growth of our tourism industry will in turn spur more demand for our local goods and services.
We also support the government’s initiative to facilitate the growth and development of micro-SMEs and SMEs through loan and financing facilities. Tax exemption for those involved in Islamic Securities Selling and Buying (ISSB) must also be lauded. This will encourage more active involvement in the Islamic finance sector, promoting its growth and development. These initiatives collectively contribute to a more vibrant and inclusive economic landscape, fostering financial stability and empowering businesses.
We are encouraged to see that the strategies and programmes outlined in the Budget 2024 will support economic growth, facilitating industry transformation and productivity growth to create a conducive business environment.
Tan Chor Sen
CEO, OCBC Bank (Malaysia) Bhd
We at OCBC Bank see Budget 2024 as progressively building a prosperous nation and ensuring sustainability. This is done while seeking to place the country firmly on the regional map.
The budget also ensures that the nation’s economic backbone — MSMEs — continues to grow through the RM44 billion allocation in loans and guarantees, including the grants for digitalisation.
The move to improve efforts to encourage adoption of sustainable practices, such as installing solar panels is on the right track and OCBC Bank will lend its utmost support to this. And we are excited about the government’s proposal to extend support and tax benefits to those involved in Sustainable & Responsible Investments (SRI).
Ultimately, the national budget is one for the rakyat and does well to make good the unity government’s realigned 12th Malaysia Plan inclusive of the National Energy Transition Roadmap, New Industrial Master Plan 2030 and the Madani Economy Framework which will serve to achieve sustainable development and reinvigorate the economy.
Datuk Dominic Silva
CEO, MIDF Amanah Investment Bank
Budget 2024 can be seen as the starting point for realising the aspirations of Ekonomi Madani. It supports the various initiatives under the Ekonomi Madani umbrella such as the New Industrial Master Plan 2030, National Energy Transition Roadmap and 12 Malaysia Plan Mid-Term Review.
The budget announcement includes several significant measures for the upcoming fiscal year and is inclusive, comprehensive, and forward-looking.
It represents a balanced approach to fiscal management, removes overlaps and redundancies between institutions, buttresses key economic sectors without losing focus on environmental factors, positions the country to capitalise on emerging economic trends, while prioritising the welfare and development of the nation overall. It reflects a commitment to restructure the economy for a more inclusive, orderly, and sustainable growth.
The focus on empowering the SME segment is commendable, as these segments form the backbone of the economy. Providing them with the necessary support not only fosters economic growth and stability but also provides the transformative journey the country needs.
Nurjesmi Mohd Nashir
CEO, Affin Hwang Investment Bank
Budget 2024 introduces measures to create better market activity. The aim to improve market sentiment by introducing subsidy rationalisation and the mechanism of targeted fuel subsidy points towards the government's commitment to a sustainable growth path.
The likelihood of capital gains tax which can exempt disposal of unlisted shares in cases such as IPOs and mergers/acquisitions may stimulate the vibrancy of our otherwise subdued capital market.
The impact of income tax exemption on Shariah-based Securities Borrowing and Lending activities could also stimulate trading of smaller and mid-cap stocks.
On funds allocation for the NETR, this will greatly help both financial institutions and businesses in meeting sustainability targets and reduce carbon emissions.
From an ESG perspective, Budget 2024 also solidifies the government’s direction and commitment to promoting green growth and the low-carbon transition.
Go here for our comprehensive Budget 2024 coverage.