Opportunities aplenty for Sabah in Najib’s budget and more

By John Lo

Prime Minister Najib Razak delivered the best ever budget on October 27 since assuming office as PM. It was an election budget and the opposition should have expected it.

No point saying the PM used Budget 2018 to press for political advantages. Anyone would do it. I would too if I was in his position.

Also, there is no such thing as the perfect budget. It is natural that the opposition, in the performance of their duty as the opposition, endeavour to tear it to pieces. In all these years, I have never seen a perfect budget in any country, including the US, UK, Australia and Japan. No opposition would praise a government’s budget. It is just the nature of things in a robust democracy.

I have many issues with Najib. But Budget 2018 is not one of them. In fact, I wish to compliment Najib for it. Budget 2018 is as inclusive and comprehensive as it can be.

No section of the population has been left out, and most touching is those for mothers and newborn babies. It is not a “golden spoon” for the newborns but it is the first in our history and likely the first in the world.

For the first time, the budget is neutral – both from a racial and religious perspective. Najib has shown that he can be PM to all Malaysians.

In as far as Sabahans are concerned, we should look at this budget positively and take up the challenges to continue to improve our personal economic positions with more self-driven determination in the context of “Musa’s Vision for Sabah”.

Najib has recognised two very key points about Sabah in Budget 2018. Firstly, he has taken into consideration Sabah’s pivotal role in the national political scenario.

Secondly, he has given recognition that Sabah Chief Minister Musa Aman has transformed Sabah’s economy. He has therefore incorporated a number of “boosters” in this budget that can propel Sabah’s economy further.

In assessing Budget 2018, Sabahans should not look at it strictly from the traditional perspective of how much Najib allocated for them directly, although this is important. We should also look at the indirect effects too.

Having said that, Sabahans should not wait for the durians to drop but must go all out to grab the advantages on offer in Budget 2018. We should do it, as Malaysians in all other states, from Kelantan to Sarawak, will do it with vigorous single-mindedness.

How Sabah will directly benefit from Budget 2018

There are too many items but I will select a few…

1. RM1.1 billion for rural development: This huge amount is to be shared with Sarawak for bridges, street lights and prayer halls. This has come at the most appropriate time as many critical small infrastructures in the rural areas were destroyed altogether or damaged in the recent rain storms.

2. Electricity for rural areas: RM672 million is allocated including RM620 million for Sabah and Sarawak involving 10,000 homes. RM300mil for Sabah and Sarawak provided for clean water supply involving 3,000 homes. Having electricity for these rural homes will complement the Communal Titles. These rural folks have land security and now electricity and clean water in their homes, bringing their status equal to or better than many rural residents in advanced countries.

3. Airport expansion for Sandakan: This expansion will enable Sandakan airport to attract more tourists, especially from China directly. The people of Sandakan can now begin to seriously plan for programmes and tourism products that will give reasons for more tourists to stay longer. If Semporna can attract around 250,000 tourists a year, why not Sandakan where there are many big businessmen who can invest serious money into tourism.

4. RM2 billion for Pan-Borneo Highway: This allocation will push for the completion of the next stage of the Pan Borneo Highway. It is already useable in Penampang and has improved land value for many. The Pan Borneo Highway, when completed, will be the most important economic artery.

5. RM1 billion for SKMM to upgrade communication infrastructure and broadband facilities in Sabah and Sarawak: This allocation will play the most important role for Sabah’s economy, especially in international trade, tourism and for young Sabahans who wish to enter the Internet business or e-commerce. Musa has just launched free WiFi for the city of Kota Kinabalu, bringing us on par with Singapore.

6. RM1 billion for repair of schools in Sabah: This allocation will go a long way to repair schools in rural areas. The beneficial effects of having properly maintained schools will be felt for many years to come. The federal government should consider handing over the responsibility to undertake these repairs to the Sabah government for speed and effective management.

7. RM20 million for surveying and mapping communal titles for Sabah: I find this humble allocation the most meaningful in terms of social economic development for Sabahans in rural areas. This allocation is a perfect fit for Musa’s initiatives to protect their economic interest by issuing communal titles for them.

8. GST relief for oil and gas companies, importing of oil rigs or floating structures effective January 1, 2018: Many Sabahans may not realise this relief is hugely important to Sabah and Musa’s vision for our direct investment in the oil and gas industry. He formed a Sabah government-owned company for this purpose a few years ago. Sarawak replicated Musa’s strategy a few months ago.

How Sabah will indirectly benefit from Budget 2018

Unbelievable but true that Najib’s 11,782-word speech for Budget 2018 gave numerous provisions that can benefit Sabahans personally or indirectly, from a 2% reduction of income tax to promotion of tourism to benefits for retirees to transportation. Some indirect benefits are for our political leaders to fight for.

However, many are there for the taking by private sector players, especially those infused with initiatives. The list literally goes on and on. For illustration purposes, I will just name a few.

1. Boosting Tourism Industry: This sector is Sabah’s forte. Budget 2018 is expecting 28 million arrivals which I presume does not include domestic ones. We need to assess what percentage of the total tourist arrivals Sabah should achieve within the next five years. Sabah cannot rest on its laurels, especially since Najib has designated 2020 as “Visit Malaysia Year.”

RM500m has been provided for development and promotion of tourism upgrading infrastructure and promotion of homestays and eco-tourism programmes. Sabah can be at the forefront of these.

In view of the shortage of hotel rooms in KK and Semporna, the tax incentives for investment in new 4- and 5-star hotels should benefit Sabah tremendously. Sabah must go all out to promote construction of these hotels. This incentive has been extended until December 31, 2020.

Likewise, the tax incentive for tour operators has been extended to the year of assessment of 2020.

In medical tourism, RM30 million has been given to the Malaysian Healthcare Travel Council for promotion. Private hospitals must pursue this aggressively.

All of Sabah must get excited and gear-up to welcome an additional 1 million Chinese tourists that Beijing promised Musa during his last visit to China with the deputy prime minister.

2. Prioritise the welfare of senior citizens, people with disabilities and children: The Government will provide an allocation of RM1.7 billion for these groups of people.

3. Transportation: A sum of RM1 billion has been allocated for the Public Transportation Fund for working capital and procurement of assets such as buses and taxis.

The Government has allocated a sum of RM3.9 billion for goods and transport subsidies including cooking gas, flour, cooking oil, electricity and toll.

4. Schooling assistance: A total of RM2.9 billion is also allocated for food assistance, textbooks, per capita grants and federal scholarships for schools.

5. Boosting agricultural sector: A large allocation of RM6.5 billion has been provided to assist farmers, fishermen, smallholders and rubber tappers. Sabah must get a fair share in this allocation.

6. Sabah-Labuan Bridge study: This will be a game changer if it is implemented in the near future. It will bring some economic relief for Labuan which is suffering from its worst economic depression, and a lot of economic development for the south-west part of Sabah. Tan Sri Harris Salleh submitted a proposal four years ago that will entail the exchange of land for the bridge.

This proposal can “kill two birds with one stone”. The bridge will be built without incurring cash payments by the federal government. At the same time, the development on the land to be swapped on both sides of the bridge will provide high-end economic activities for Labuan and Sabah, making the bridge viable in the shortest time.

Impact of Budget 2018 in the context of ‘The Musa Vision for Sabah’

Musa’s Halatuju, since its initial launch, has made significant progress into transforming Sabah’s economy.

Because of this, there are many aspects of Budget 2018 that dovetail with the overall future direction of ‘The Musa Vision for Sabah’.

Topmost is tourism which I can see will have a major impact on Sabah in view of the many incentives and big sums allocated.

On Sabah’s part, the SICC, TAED, many hotels are coming on stream, some of which will be completed in time for the 2020 Visit Malaysia Year. The drive by Musa to diversify into the service industry will pay handsome dividends for Sabahans. This industry will generate a lot more employment in the near future.

The Sandakan airport extension will position Sandakan as the eco-tourism capital of Malaysia. As such, tourism players and tourism asset owners must get their act together.

The GST-relief for the oil and gas industry will likewise benefit Sabah, more so if we go into on-shore exploration. Musa has already got for Sabah a 25% share of a Production Sharing Contract.

The Halatuju has foreseen a great need for skilled manpower in our drive for high income status. Towards this end, there are many incentives, including scholarships and technical training courses in Budget 2018 that can complement the ongoing efforts of the Sabah government. These are just a few of the many examples.

Najib’s Budget 2018, Halajutu and Musa’s 2018 Sabah Budget

Budget 2018 has been presented in Parliament. Halatuju is widely known. Musa will present his 2018 Sabah budget this month which I am certain will synergise with the first two documents.

Don’t allow anyone to fool you into thinking these three documents are political. They are not.

These three documents are the manifestations of the most important operative/official economic strategies, directions and policies of the federal and Sabah governments for 2018 and beyond.

In these three documents, Sabahans can find the opportunities of economic advancement in careers, employment and business.

Being out of sync with these documents is to be out of tune with economic reality, just like swimming against the current.

Sabahans, especially those in their 30s and 40s who are keen to get on in life, should undertake some serious perusals of these three economic documents so that they and their families can benefit from the many new and exciting opportunities therein.

John Lo is an FMT reader.