Business News:- 2015 Budget Reactions from Property Companies, Industries

Property Companies:

* Tan Sri Leong Hoy Kum, Group Managing Director, Mah Sing Group Bhd

Mah Sing lauds the various initiatives in Budget 2015, the last budget under the 10th Malaysia Plan (10MP) which continues to be pro-rakyat and focuses on creating more affordable housing, ease concerns over the cost of living and enhance job opportunities.

Overall, we are heartened to see the focus on helping first time home buyers as Mah Sing’s strategy is very much in line; we are providing properties that meet the needs of the mass market.

Youth Housing Scheme – Increasing home ownership:  The Government is taking action to increase home ownership with the Youth Housing Scheme which is a smart partnership between the Government, Bank Simpanan Rakyat, EPF and Cagamas.

The scheme offers a funding limit for a first home not exceeding RM500,000 for married  youth aged between 25 and 40 years with household income not exceeding RM10,000.

This will directly benefit Mah Sing as 70% of our buyers are aged 40 years and below. In fact, 45% of our residential launches for 2014 are below RM500,000.

Mah Sing is very focused on products for the middle income group and has a host of well designed properties at attractive price points that will appeal to the mass market.

Some examples of Mah Sing’s properties in this range include:

Central Region: Savanna Executive Suites from RM338,000 in Southville City@KL South, Bangi, Apines@M Residence 2 in Rawang which are double storey homes from RM439,000; Sovo Suites from RM358,200 in D’Sara Sentral in Sungai Buloh;   iSovo @ Icon City , Petaling Jaya priced from RM456,000

Southern Region – Iskandar Malaysia:  Meridin Bayvue suites from RM350,000 in Sierra Perdana; Meridin Suites from RM309,000 in Meridin@Medini; Austin Suites from RM376,000 in Austin Perdana in Iskandar Malaysia.

Over the past 2 to 3 years, our landbanking strategy has been more focused on locking in larger tracks of township lands for the affordable range of mid-end products.

For 2015 onwards, we will have multiple launches below the RM500,000 price point in our big new townships:

In the pipeline are double storey link homes from RM339, 000 in Bandar Meridin East in Plentong which we intend to preview by the end of the year, double storey link homes from RM350,000 in Seremban targeted to be launched in 2015, and serviced apartments from RM300,000 in Star Residence@Subang Bestari in Shah Alam.

For existing projects, we will also continue to launch more blocks of Savanna Executive Suites in Southville@KL South from RM338,000.

Various goodies for First-Time Home Buyers: First time home owners are getting plenty of goodies in this Budget as the Government is providing RM200 monthly financial assistance to help with monthly installments, 50% stamp duty exemption on transfer documents and loan agreements, as well as a 10% loan guarantee so that they could obtain 100% financing. They can even withdraw from their EPF account 2 to top up their monthly installment and we shall certainly communicate this to our potential buyers as so many of them fall in this category.

50% stamp duty exemption for properties up to RM500,000 until 31 December 2016: We appreciate that the Government has extended the 50% stamp duty on the instruments of transfer and loan agreements, at the same time increasing the purchase limit to RM500,000.  This will help reduce the transaction cost of home ownership.

Personal Income Tax reductions:  We are also pleased that the Government is reducing income tax rates by 1 to 3 percentage points for assessment year 2015.  This translates to tax payers enjoying a tax savings of at least 5.3% and those with income under RM4,000 would no longer have to pay income tax. This brings us closer to regional practices, and not only would tax payers have more disposable income, this will make Malaysia a more attractive employment destination.

Sustaining commitment in Infrastructure projects and improving public transport network. Mah Sing is primarily a Klang Valley property player, with 75% of development focus (remaining gross development value) located in the central region.

We are heartened to see the sustained commitment by the Government to go ahead with upgrading the nation’s public transport network.  The LRT 3 project linking Bandar Utama to Shah Alam and Klang will benefit our new development in KGSASS in Shah Alam, and the construction of the second MRT Line will greatly improve public transportation.  The various highways slated for implementation in 2015 including the SUKE, DASH and EKVE will benefit our 25 ongoing projects in the Klang Valley and the Central region and its extended development corridor.

10,000 new jobs in Pengerang Integrated Petroleum Complex: The announcement is opportune as we are launching our Bandar Meridin East in 2015.  The project is sited between Pasir Gudang and Tg. Langsat, and is only 80km from Penggerang.  This will provide a latent demand for housing.

* Datuk Izham Yusoff, Group Managing Director of Bina Darulaman Bhd

Datuk Idzham Yusoff

The Government is going all out to address the issue of house ownership by mobilising its housing agencies such as the PR1MA Corporation, the National Housing Department and Syarikat Perumahan Negara Berhad to ensure that the low-middle income people are able to have a roof above their heads amid their struggle with escalating living cost.

In essence, we in BDB are very encouraged by the very comprehensive budget on the issue of affordable housing. As a responsible developer, we shall work together with the relevant agencies to assist first time home buyers as well as those who can ill-afford to finance a home in their ultimate quest to own a house.

To enable more people to own their first home and reduce the cost of buying a house, we feel that it is only timely for the Government to extend the 50% stamp duty exemption on instruments of transfer and loan agreements and increase the purchase limit from RM400,000 to RM500,000 (till 31 December 2016).

Budget 2015 has set identified the construction of 143,000 affordable housing units under the 1Malaysia People’s Housing Programme (PR1MA) (80,000 units); the National Housing Department’s People’s Housing Programme (26,000 units) and Syarikat Perumahan Negara Bhd (SPNB) (37,000 units).

To enable more people to own their first home and reduce the cost of buying a house, the Government has also agreed to extend the 50% stamp duty exemption on instruments of transfer and loan agreements as well as to increase the purchase limit from RM400,000 to RM500,000. Such exemption will be given until 31 December 2016.

BDB is prepareds to work hand-in-hand with quarters from both the public and private sectors who are interested in developing affordable housing schemes nationwide.

For the record, BDB recently sold en-bloc one-third or 323 units of its Taman Insaniah affordable housing development in Bandar Kuala Ketil, Kedah to PR1MA Malaysia Corp (PR1MA) for RM72 million.

Boasting a Gross Development Value (GDV) of RM220 million, Taman Insaniah is a 949-unit development within the 1,100-acre township of Darulaman Utama which is located about 750m from the Kuala Ketil town in Baling. Work on the project is 60% complete and is slated to be fully completed by the fourth quarter of 2015.

“The Taman Insaniah project marks the beginning of a strategic collaboration between BDB and PR1MA to provide Kedahans with the opportunity to buy affordable housing

In recent times, BDB has acquired five parcels of land totalling 1,155 acres from Perbadanan Kemajuan Negeri Kedah. The land parcels are located in Kg Kisap in Langkawi; Pokok Sena; Sungai Lalang in Kuala Muda; Sungai Ular in Kulim, and Hosba in Kubang Pasu.

We are now ready to spread our wings beyond the shores of Kedah so that we are able to lend our expertise elsewhere in the area of affordable housing.

Industry Players

* Cheah Kok Hoong, Chairman of PIKOM

Cheah Kok Hoong

Inadequate measures in Budget 2015 towards a digital economy nation. As we move towards a high income and knowledge-based economy, PIKOM felt that there should have been more ICT-focused initiatives in Budget 2015. This is in line with our aspirations towards creating a digital economy.

However, PIKOM is pleased that the government is responding to our request on a reduction of both Personal and Corporate income tax.

The Personal income tax rates cut 1 to 3 percentage points, would result in 300,000 taxpayers no longer taxable while corporate income tax would reduce 1% to 24%. The reduction will result an increase of disposable income for the middle class and companies.

The government has also taken heed of our request on increasing broadband uptake.

The investment of RM 2.7bil over a period of 3 years augurs well towards increasing broadband subscription.

This helps address the issue of availability. PIKOM felt that the Budget did not sufficiently address the issue of broadband services charges which is deemed still high compared to regional neighbours.

Although we do not see many specific incentives towards ICT industry, there is introduction of Research Incentive Scheme for Enterprise (RISE) totaling RM10mil for Enterprises.

We would encourage the ICT players to take advantage on this scheme to fund their research and product development.  The allocation of RM1.3bil allocated to the Ministry of Science, Technology and Innovation (MOSTI) will spur R&D and commercialisation.

On the content industry, PIKOM welcomes the significant allocation of RM200mil for the MyCreative Venture and the RM100mil to promote digital content. The government is cognizant of trends towards richer content for the netizens.

Moreover, as we are moving towards a globalised business nature, SMEs now could  take advantage on the comeback of Services Export Fund (SEF) totaling RM300mil to do market studies and boost exports.

This is especially key to help the local SMEs as we welcome the ASEAN Economic Community in 2015. This will be a major encouragement for companies to seek new markets abroad for expansion.

In summary, PIKOM feels that the Budget addresses the immediate need to lessen the burden on the people. The Budget 2015 should have addressed the ICT industry’s concerns such as zero-rated GST on ICT products and competitive broadband rates.

Last but not least, with the announcement of the 2015 Budget 2015, I would like to urge the local businesses to get ready for the implementation of GST by April next year.

* Datuk Seri Stanley Thai, Group Managing Director, Supermax Corporation Bhd

Supermax is delighted to hear that finally, the government recognises the importance of the Rubber Products Industry.

The Glove Industry is heading towards the next exciting phase of growth including automation manufacturing; and the 2015 budget announcement of the following incentive program would accelerated the growth and enhance global competitiveness of gloves & other rubber products that are Made in Malaysia.

RM300mil allocated for Promotion of New Markets.

It really helps the glove industry to enter into Promotion of New Markets.  We do hope that there is an effective implementation and disbursement of funds for Promotion of New Markets to those genuine exporters.

Capital Allowance to Increase Automation Labour Incentive Industries:-

Automation Capital Allowance of 200% for the first RM4.0 million is far too low and inadequate for the Rubber Products in particular for the Glove Industry.

We urge the government to implement Automation Capital Allowances of 200% of amount spent on automation manufacturing & not to put a ceiling on Automation Capital Allowance. Developing of Human Capital and Entrepreneurship.

Datuk Seri Stanley Thai

The 2015 Budget speech emphasised heavily on Developing of Human Capital and Entrepreneurship. Malaysia is one of the largest exporter of Human Talents & the continuous brain drains remain the biggest challenge to the corporate and businesses operating in Malaysia.  We hope that the policy makers would implement policies that are inclusive and reverse the massive brain drain.

Hideo Yamazaki

* Hideo Yamazaki, Managing Director of 3M Malaysia Sdn Bhd

The allocation of RM1.3 billion to the Ministry of Science, Technology and Innovation for example, is a progressive step towards allowing the nation to remain, if not become, more resilient and competitive.

Nevertheless, the focus on improving Malaysia’s economic stability calls for the need to invest in more initiatives that will cultivate innovation capabilities as well as develop better human capital.

We need to enhance the education and strengthen the use of knowledge and skills to accelerate domestic technological development by converting research results into productive efforts.

While we acknowledge that initiatives such as the allocation of RM30 million for Industry Academia Collaboration programme for universities, government entities and industries to collaborate to develop the curriculum for internship programmes and industrial training will act as headway, we hope that the Malaysian government will work more closely with the private sector to identify the most effective means of achieving such growth.

With assets such as our existing 3M Customer Innovation Centre, private sector organisations such as 3M are ready to provide strong private-public collaboration opportunities to further grow Malaysia further up the economic value chain.

With rapid emergence of rival markets in South-East Asia who are equally keen to utilise innovation as a key means for competitive advantages, we believe that more can be done to accelerate the growth of Malaysia’s innovation capabilities.

For example, the 10th Malaysia Plan (2011-2015) which stresses on human capital development and improvements in innovation capacity has indicated that gross expenditure for research and development has dropped to 0.21% in 2008.

With an aim to ensure that investment in R&D reaches at least 1% of gross domestic product (GDP) by 2015, we believe that there is a need to intensify research activities and public research institutes as well as their links to private companies to maximize commercialization opportunities – on top of providing research funds.

Small and medium-sized enterprises for example which accounts for 95% of Malaysia’s corporations and 33% of GDP conducts little research or innovative activity.

While investment has been allocated to accelerate the participation of SMEs in economic activity such as the implementation of SME Investment Partner, we believe that more practical initiatives – instead of financing assistance – such as supporting local talent development towards high-value R&D opportunities will make innovation pervasive in the sector.

We believe that with that, and the strength of local infrastructure, availability of existing human capital and abundant resources, Malaysia has every potential to grow into an innovation hub which will propel our nation towards becoming a high-income and developed nation perhaps much earlier than 2020.

With the strength and diversity of our technology platforms and innovation capability, we are eager to work with business partners as well as the Malaysian government to advance Malaysia’s culture of innovation.

Source: the Star Online
Published on: Friday, October 10, 2014

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