Prime Minister Najib Abdul Razak is reading his fourth budget speech which is aimed at shoring up support before the 13th general election and rein in the deficit.

"Since the last 55 years, Malaysians have placed their trust in the same government at every stage of the nation’s development. We thank you for your trust. We have never betrayed the people. Instead, we have repaid the trust given to us manifold," said Najib.

"This government has never promised the moon, the stars or the galaxy. We have never painted a pretty picture based on wishful thinking. As a responsible government, we continue to speak the truth even though it may be unpleasant.

"We have never misled to the rakyat with tall tales. On the other hand, we have always offered solutions and provided good leadership to every problem faced by the rakyat.

"Managing a complex multiracial country like Malaysia is not easy. It requires sincerity and intelligence because Malaysians are a discerning lot. In fact, the rakyat has given the mandate to the same Government 12 times since 1959, indicating that this Government has done the right thing.

"The trust that exists between the rakyat and the government cannot be broken no matter how strong the lies. In this regard, the Budget that I am tabling is in appreciation of all Malaysians who have placed their trust in us all this while."


Total budget: RM251.6 billion

Operation expenditure: RM201.9 bil
Development expenditure: RM49.7 bil

GDP growth 2012: 4.5% - 5.0%
GDP growth 2013: 4.5% - 5.5%

Revenue 2012: RM206.2 bil
Revenue 2013: RM208.6 bil

Deficit 2012: 4.5%
Deficit 2013: 4.0%

Budget 2013 in graphics - click here


  • Total expenditure - RM249.7 bil, down 1.1 percent, but 7.2 percent higher than 2012 initial budget
  • Deficit - Expected to go down by 0.5% to 4% in 2013. Target is to reach 3 percent by 2015
  • Federal government debt 2012 - RM502.4 bil (highest in history) or 53.7 percent (highest since early 1990s)
  • Government revenue RM208.6 bil, up RM1.4 bil
  • Government estimated to have overspent RM19.6 bil in 2012
Small and medium industries
  • RM1 bil SME development scheme
  • Group insurance for petty traders with maximum RM5,000 coverage
  • New loan facilities for petty traders
  • Target for Visit Malaysia Year 2013/2014: 26.8 mil tourist
  • Three-year tax holiday for tourism companies handing 750 foreign tourists and 1,500 local tourists.
  • RM705 mil for replanting, technology development, smallholder assistance and product development, particularly for oil palm.
  • RM200 monthly allowance, 10 to 20 sen/kilo income support and up to RM100,000 coverage for fishermen
  • RM2.4 bil in subsidies and incentives for rice plantations.
  • 10-year tax holiday for Tun Razak Exchange companies, expected to attract 250 companies related to finance sector
  • Skim Jaminan Modal Kerja expanded for companies with shareholdings worth RM20 mil, and offered up to Dec 31, 2013
  • RM350 mil for entreprenuers under TEKUN programme, including RM50 mil for the Indian community
  • SME Bank bumiputera fund - RM1 bil
  • Bumiputera equity holding up: 23%
Education and labour
  • RM1 bil to improve school infrastructure
  • RM1.2 bil for pre-schools under government programmes including Permata
  • RM10,000 launching grants for private pre-school operators
  • Five-year tax holiday and building allowance for pre-school operators
  • Six pilot pre-schools for the disabled
  • RM3.7 bil for vocational training
  • Additional allocation of RM500 million for training of teachers in core subjects: Bahasa Malaysia, English, Science and Maths
  • Free health checks, twice a year, for Perkeso members
Research and development
  • RM600 million R&D grants for five universities. Focus: Nanotechnology, automotive, bio-technology and aerospace technology
  • Tax holiday for research and development investment (10-year tax holiday for statutory earnings)
  • RM2 billion for green technology scheme
Pensioners and senior citizens
  • Minimum pension for those who served at least 25 years up from RM720 to RM820.
  • 50 percent off passport fees for senior citizens starting Jan 2013
Armed forces
  • RM200 a month incentives for armed forces personnel
  • Allowance hike from RM4.00 to RM7.80 an hour for reserve corps and territorial army
  • One-off payment of RM1,000 for army veterans who served for at least 21 years, where 224,000 will qualify.
  • Insurance coverage of up to RM15,000 for police and army.
  • RM591 million for crime prevention
  • 1,000 motorcycles for the police neighbourhood patrol unit.
  • Additional 10,000 volunteer police
  • 496 CCTV in 25 local councils
  • RM10,000 grants for neighbourhood associations for patrols
  • New uniforms for 300,000 Rela members
  • Incentives for companies that install security systems
  • Additional 150 staff for Malaysian Anti-Corruption Commission (MACC)
  • RM20 million for legal aid
Rural development
  • RM88 million for Orang Asli development
  • 40,000 water tanks for those in the interiors of Sabah and Sarawak
  • 19,000 homes to get electricity and 24,000 homes to get tap water
  • 441 kilometers of new rural roads
  • RM100 million to improve 350 government clinics
  • 70 more Klinik 1Malaysia to be established, increasing total number to 240.
Youth and sports
  • Velodrom in Seremban, Negri Sembilan and a Badminton Academy in Bukit Kiara,Kuala Lumpur
  • Subsidy of two percent of interest rates business loans for young entrepreneurs for loans up to RM100,000
  • RM200 rebate for smart phone purchase for those aged 21 to 30 years.
Public transport
  • Half price Komunter fares for those earning less than RM3,000 a month.
  • Formation of RapidKuantan.
  • Affordable housing - 123,000 units to be built, in areas such as Sungai Buloh and seremban
  • First home scheme - income cap raised from RM3,000 to RM5,000. Join income limit is RM10,000. Applies only for houses below RM400,000
  • Up to 50 percent stamp duty exemption for first home owners until Dec 14, 2014
  • Real property gains tax (RPGT) for properties sold within two years of purchase raised to 15%;  2-5 years 10%. No RPGT for properties sold five years after purchase
  • Tax breaks and incentives for contractors and banks who offer loans to contractors to revive abandoned housing projects. Original buyers of abandoned projects will be exempted from stamp duty for loan refinancing or ownership transfer agreements
Bantuan Rakyat 1Malaysia (BR1M 2.0)
  • RM500 cash for households with combined income of RM3,000 or less
  • RM250 cash for unmarried individuals who are 21 and above and earning RM2,000 and below
  • Disbursement - Early 2013
Subsidi cuts
  • Sugar prices to increase as a result of subsidy cuts by RM0.20. New prices are RM2.50 per kilo for Peninsular Malaysia and RM2.60 per kilo for Sabah and Sarawak.
Tax cuts
  • 1% tax reduction for those with a taxable income of RM2,500 to RM50,000
  • Tax cuts for corporations
  • RM10,000 rebates and 2% interest subsidy on loans to purchase new school buses, to replace buses which are 25 years or more. (Capacity 12 to 18 seats)
  • RM2.6 bil in welfare aid for schoolchildren
  • One-off payment of RM100 for each primary and secondary school student
  • 20% discount for National Higher Education Fund (PTPTN) loans for those who pay off the entire amount outstanding (valid until Sept 30, 2013)
  • 10% discount for PTPTN loan repayment for those who pay consistently
  • 100 neighbourhood internet centres
Civil service bonus
  • One and a half month bonus, disbursed in three months.