What’s in the revamped RM388bil federal budget

Free Malaysia Today, 24 February 2023

Prime Minister and Finance Minister Anwar Ibrahim seen tabling Budget 2023 in the Dewan Rakyat today. (Bernama pic)

PETALING JAYA: Prime Minister and Finance Minister Anwar Ibrahim has tabled a revised 2023 federal government budget, with a total allocation of RM388 billion.

This represents a RM15.8 billion increase compared to the RM372.3 billion initially allocated by the previous government of Ismail Sabri Yaakob.

Operational expenditure accounts for RM289 billion or 74%, with RM99 billion for development expenditure.

Here are the highlights of the 2023 budget.


  • RM40 billion in loan facilities for MSMEs through government agencies.
  • RM20 billion in loans to SMEs in high value sectors through Syarikat Jaminan Pembiayaan Perniagaan.
  • RM10 billion in loans for SMEs through Bank Negara Malaysia.
  • 7 billion in loan facilities under Bank Negara, BSN and Tekun.
  • RM176 million to upgrade business premises and facilities under Mara, DBKL, PUNB and Uda.
  • RM50 million to build and upgrade 3,000 stalls and kiosks nationwide
  • The government will introduce a New Industry Master Plan 2030.
  • This will include the restructuring of investment incentives.
  • Bank Negara to provide RM2 billion in loans to support green technology startups and help SMEs embrace low-carbon practices.
  • Incentives to local councils that make it easier for businesses to be set up.
  • Increased availability of Islamic financing.
  • Tun Razak Exchange to become the country’s international financial hub.
  • Bank Pembangunan Malaysia Bhd to provide RM6 billion in strategic funding on sustainability and automation.
  • RM100 million to support automation and digitisation among SMEs and petty traders.
  • RM1 billion to help micro SMEs automate and digitise their business.
  • Khazanah and EPF will invest RM1.5 billion in local startups.
  • RM40 million for the Malaysia Co-investment Fund (MyCIF)


  • 7 billion to repair and upgrade federal roads.
  • The government will use district engineers to speed up the repairing of federal roads.
  • RM525 million to upgrade the road network in Pengerang through construction of new lanes on the Senai Desaru Expressway and upgrade works on the North-South Expressway from Yong Peng Utara to Senai Utara.
  • RM480 million to build new roads from Habu to Tanah Rata in Cameron Highlands.
  • RM50 million to instal lampposts in accident-prone areas.


  • RM64 billion allocated for subsidies, aid and incentives.
  • RM8 billion in cash aid under Sumbangan Tunai Rahmah. This will benefit 8.7 million people. The poorest will receive up to RM3,100.
  • 6 billion in subsidies for rice farmers.
  • RM228 million; to give rice farmers cash aid of RM600
  • RM400 million in e-credit for two million youths aged 18 to 20, at RM200 each.


  • Personal income tax rate reduced by 2% for those earning between RM35,000 and RM100,000. This will benefit around 2.4 million taxpayers.
  • Increase in income tax rate by 0.5% to 2% for those earning between RM100,000 and RM1 million a year. Fewer than 150,000 people will be affected.
  • Income tax for micro SMEs will be reduced from 17% to 15% for the first RM150,000.
  • Income tax exemptions for medical expenditure will be increased from RM8,000 to RM10,000
  • The government will incentivise self declaration for income tax arrears beginning June 1.
  • Excise duties to be introduced on vape and e-cigarette liquids containing nicotine.
  • The government will study the possibility of introducing a capital gains tax from 2024.
  • The government will introduce wealth tax. Luxury watches and goods will be taxed.
  • The government will maintain electricity subsidies for all domestic users and SMEs.
  • Tax incentives for the aerospace industry will be extended to Dec 31, 2025.
  • Tax incentives for manufacturers to move operations to Malaysia will be extended to 2024.
  • The government proposes extending the incentives under the green investment tax allowance and green income tax exemption until Dec 31, 2025.


  • The education ministry gets RM55.2 billion, the highest allocation.
  • 2 billion to repair 400 dilapidated clinics and 380 dilapidated schools.
  • RM777 million for Rancangan Makanan Tambahan benefitting 700,000 students.
  • RM108 million for Program Makanan Prasekolah benefitting 240,000 students.
  • RM560 million to build seven new schools.
  • RM20 million for gotong-royong activities in schools nationwide.
  • The government will provide schools with 50,000 laptops.

 Higher education

  • 3 billion for higher education ministry.
  • RM436 million to improve and replace old infrastructure in public universities.
  • RM35 million to improve internet connectivity in higher education institutions.
  • RM428 million for research and development activities.
  • 20% discount on PTPTN loan repayments for three months from March 1.
  • PTPTN borrowers earning less than RM1,800 have been given a six month loan moratorium.


  • 3 billion for the health ministry. This includes nearly RM3 billion for the appointment of over 1,500 permanent and contract health workers.
  • Half of revenue from excise duties collected under the Generational Endgame (GEG) law will be channeled to the health ministry.
  • RM700 million to upgrade the Melaka hospital to reduce congestion.
  • RM120 million for Skim Perubatan Madani to help the poor access health services.
  • The government will upgrade 26 hospitals.
  • RM80 million for the Peka B40 health scheme.


  • 5 billion for the home ministry.
  • A special police unit will be established to combat child pornography.
  • Nearly RM1 billion to improve domestic security, including the purchase of 2,100 body cameras for policemen.
  • The government will also build 42 new border security posts.


  • 7 billion for the defence ministry. This includes RM4.1 billion for the maintenance and purchase of new military assets.
  • RM500 million to repair homes of armed forces’ members.
  • Government to build more than 7,000 affordable homes for members of the armed forces.
  • Putrajaya to carry out upskilling programmes for army veterans. Up to 5,000 veterans on pension to be offered job opportunities in GLCs.


  • RM50 million to increase the number of wildlife rangers to 1,500 people.
  • RM38 million allocated to protect endangered wildlife including tigers and elephants.
  • The government will increase allocations given to states to preserve forests from RM70 million a year to RM150 million a year.

 Social welfare

  • Government to contribute RM500 to EPF Account 1 of members aged 40 to 54 with less than RM10,000. This will benefit two million people and cost Putrajaya RM1 billion.
  • Government to consolidate databases of monthly government aid recipients.
  • Government will set aside a portion of “wang ehsan” (compassionate money) to Kelantan and Terengganu for petroleum specifically to help the poor.
  • RM750 million for Inisiatif Pendapatan Rakyat (IPR) to empower the poor. The IPR will come under the purview of the economy ministry. This programme is expected to help participants earn up to RM2,500 a month, for 24 months.
  • RM100 million for Jualan Rahmah sales in all Parliamentary constituencies. The sales will see essential items being sold for 30% below market prices.
  • RM225 million to expand the provision of essential goods for the poor in 25 new areas.
  • Those who are self-employed will be required to contribute to Skim Keselamatan Sosial Pekerjaan Sendiri. The government will spend RM100 million to help the self-employed with their contributions to the scheme.
  • Amanah Saham Malaysia fund increased to RM5 billion.

 Job creation and community support

  • GLCs to offer 35,000 job opportunities for youths, TVET graduates, veterans and other vulnerable groups.
  • GLCs and GLICs to contribute up to RM250 million to help the poor.
  • Government to introduce Skill for Inmate programme to assimilate inmates back into society.
  • Employers who hire inmates, including former residents of the Henry Gurney school and other institutions, are eligible for additional tax deductions.
  • Women, family and community development ministry to establish a child development department.
  • Socso will give incentives worth RM45 million for employers to hire 17,000 TVET graduates.
  • Socso to provide incentives for up to three months to firms that hire the disabled, ex-inmates, the homeless and jobless.
  • RM50 million to train over 8,000 people in factories under Skim Latihan Dual Nasional.
  • RM50 million for unity programmes.
  • RM50 million for the repair of non-Muslim houses of worship.
  • RM40 million to upskill 30,000 gig workers. The government will fund upskilling programmes for gig workers.
  • RM290 million in salary-matching grants to encourage 130,000 women to return to the workforce after giving birth.
  • Tax incentives for employers who provide childcare will be extended.

 Civil Service

  • Special Aidilfitri aid of RM700 for all civil servants Grade 56 and below, including contract workers.
  • Civil servants to get a RM180 childcare subsidy a month.
  • Households with income of RM7,000 and below will qualify for this.
  • RM350 in special Aidilfitri aid for government pensioners.


  • Government reviewing the terms of the MRT3 project, with the aim of achieving additional savings of at least RM45 billion.
  • Putrajaya to expand Subang and Penang airports to attract investments. This is more economical than the proposed construction of a RM7 billion airport in Kulim, says the prime minister.
  • The government will support the development of the Sanglang port in Perlis.
  • The government will also support the plans for the private sector to develop a port in Pulau Carey.
  • Government to waive driving test fees for taxi, bus, e-hailing and B2 motorcycle licenses.
  • Malaysian Road Records Information System (Marris) allocations increased to RM5.2 billion.
  • The government will continue the My50 monthly public transport pass benefiting 180,000 people.
  • RM150 million to expand Stage Bus Service Transformation to Melaka, Kuching and Kota Kinabalu.


  • RM350 million to raise rubber production incentive level.
  • RM256 million to increase monsoon season aid for 320,000 smallholders. The aid is increased from RM600 to RM800.
  • RM50 million for matching grants to encourage automation in the plantation sector.
  • RM80 million to improve sustainability of the palm oil sector and counter anti-palm oil campaigns.


  • Bernas to share 30% of net profits from rice imports with local padi farmers.
  • RM1 billion in loans to help improve local food production.
  • The government will encourage private investments in agro-based industries through the provision of incentives, land, funding and technological grants.
  • Felda, Felcra, Risda and other agencies under the agriculture and food security ministry to allocate up to 800 acres of land for food production.


  • RM5 billion in funds under the Housing Credit Guarantee Scheme for 20,000 eligible borrowers.
  • RM50 million to ensure safety of facilities in people’s housing projects (PPR).
  • Free internet in 56 PPRs in the country.


  • The government will allocate RM250 million to promote tourism.

 Arts and culture

  • RM50 million for Melaka and Penang to preserve Unesco world heritage site status.
  • RM102 million in funds to promote local digital content.
  • The government proposes tax cuts for contributions to the Community Film and National Film Development Fund under Finas.
  • RM25 million to support cultural and arts activities at the community level.

 Digital connectivity

  • RM725 million to expedite the Jendela project to improve internet connectivity.

 Youth and sports

  • RM324 million to improve training programmes and sporting facilities.
  • RM50 million in matching grants to encourage the private sector to sponsor sports programmes.
  • The government proposes tax cuts for employers who hire former athletes.

 Sabah and Sarawak

  • Sabah to get RM6.5 billion in development funds, Sarawak to get RM5.6 billion.
  • 5 billion to implement infrastructure projects in Sabah and Sarawak including road, electric and water supply projects.
  • RM1 billion to develop border towns, including Kalabakan in Sabah and Ba’kelalan in Sarawak.
  • RM209 million to subsidise air travel for rural folk in Sabah and Sarawak.
  • RM30 million to increase the number of mobile clinics, banks and courts in Sabah and Sarawak.
  • Government to expedite completion of the Pan Borneo Highway and the Sarawak-Sabah Link Road.

 Disaster management

  • RM150 million for Nadma to prepare for natural disasters.
  • RM50 million for the armed forces, fire and rescue department, and Rela to prepare for natural disasters.
  • RM100 a day allowance for search and rescue personnel who help with relief efforts in Turkey and Syria.
  • Six flood mitigation projects will be retendered.
  • Anwar said the government could have saved RM2 billion for the projects awarded by the previous government.

 Islamic affairs

  • 5 billion for Islamic affairs.
  • Private sector to establish a “Madani wakaf” involving assets worth more than RM1 billion.
  • The government will increase the allowance of 35,000 Kafa teachers by RM100 to RM1,100.

 Good governance

  • A special task force to reform government agencies, known as STAR, will be set up. It will be led by the chief secretary to the government.
  • Retirement packages for executives and top management of GLCs and statutory bodies will be revised.
  • Tabung Haji, Felda and Felcra must serve their original functions, says Anwar.
  • The government plans to merge Yayasan Pelaburan Bumiputera, Yayasan Amanah Hartanah Bumiputera and Yayasan Ekuiti Nasional soon.
  • Government procurement must be transparent. RM22 billion worth of contracts linked to flood mitigation projects and the Jana Wibawa project, which were awarded via direct negotiations, have been cancelled.
  • High impact projects must be awarded via tenders to ensure the government enjoys the best value and savings.
  • DNB must be run more transparently.


  • The government will table a Fiscal Responsibility Act in Parliament this year to ensure better management of the economy in the future.
  • The government plans to table amendments to the Whistleblowers Act to better protect whistleblowers.
  • The government plans to table the Government Procurement Act.
  • The government will amend the Insolvency Act 1967 to release bankrupts automatically.


  • Higher Amanah Saham Bumiputera (ASB) dividends for the needy.
  • Bankrupts with debts of less than RM50,000 who fulfil certain requirements will be released from bankruptcy starting March 1.
  • This is expected to benefit 130,000 people.
  • Bank Negara will allow consumers to freeze their accounts should they detect any suspicious activity.
  • RM10 million to support the National Scam Response Centre.


(Web source: https://www.freemalaysiatoday.com/category/nation/2023/02/24/anwar-to-unveil-revamped-budget-2023/)