Malaysia Budget 2018 : what for defence ?

Malaysia Announces 5.3% Defence Budget Increase

The Malaysian government has announced that defence spending will increase by 5.3% under the 2018 budget. Total spending on the Ministry of Defence (MoD) will rise from MYR15.1 billion (USD3.6 billion) to MYR15.9 billion.

Spending will decline marginally against GDP, remaining at a level of around 1.1, and as a share of overall government spending from 5.8% to 5.6%. Despite that, the MoD’s budget allocation is still around 7% lower than in 2015 following a large cut to military spending in 2016.

The additional funding will be allocated within the recurrent budget which incorporates the operating costs of the MoD and the armed forces, with related spending rising by 7.6% from MYR11.7 billion to MYR12.6 billion. (Jane's)

Budget 2018 Allocations Enhances MAF's Capabilities - Armed Forces Chief

The RM14-billion allocation to the Malaysian Armed Forces (MAF) in Budget 2018 will enhance the capabilities of the MAF in guarding the sovereignty and security of the country including at the border areas and national waters.

MAF Chief General Tan Sri Raja Mohamed Affandi Raja Mohamed Noor said the allocation would reflect the duties borne by the MAF in preserving the sovereignty of the country.

He was commenting on the allocation announced by Prime Minister Datuk Seri Najib Tun Razak when tabling Budget 2018 in the Dewan Rakyat today.

Meanwhile, Army Chief General Tan Sri Zulkiple Kassim said a part of the allocation would be used to upgrade and equip the assets of the Gerak Khas Group commando team and to install more guard posts along the Sabah and Sarawak borders.

Navy Chief Admiral Tan Sri Ahmad Kamarulzaman Ahmad Badaruddin said the allocation would allow the navy to improve the capability of its littoral combat ships with sophisticated weapons.

"This will enhance maritime safety especially in the Strait of Melaka, the South China Sea and the Sulu Sea," he said.

 (Bernama)

ESSCom Allocation Shows Goverment's Concern For Sabah Security

The RM250 million allocation given to the Eastern Sabah Security Command (ESSCom) in the 2018 Budget shows the federal government's emphasis on Sabah's security, especially those in the Eastern Sabah Security Zone (ESSZone).

The allocation can strengthen the role of ESSCom in monitoring the ESSZone waters, thus curbing cross-border crimes, including smuggling. 

The 2018 Budget tabled by Prime Minister Datuk Seri Najib Tun Razak today, allocated RM250 million to ESSCom to enhance security controls at Sabah and Sarawak borders, including RM50 million for coastal surveillance radar.

After the budget was released, RMAF official Twitter account announced that the 2018 Budget included funding for four MPA. 

MMEA appreciative of RM900 million allocation

Director-general of the Malaysian Maritime Enforcement Agency (MMEA) Admiral Datuk Zulkifili Abu Bakar has thanked the government for the RM900 million allocation to the agency, as announced in the 2018 Budget today.

Zulkifli said the allocation will be used for the agency’s development and management expenditure for next year.

“I am grateful to the government for this allocation. (Of the) total, RM490 million will be used to fund boat and ship maintenance, (and for) patrol ships currently being constructed.

“In this budget, the MMEA, as one of the security forces together with the armed forces and police, has greater and important responsibilities in safeguarding the security, sovereignty and well-being of the people and the country.

“As the national maritime enforcement agency, the MMEA is always committed and responsible in ensuring that the country’s waters are safe and under control,” Zulkifli said in a statement.

Prime Minister Datuk Seri Najib Razak today announced that the government has allocated RM14 billion for the armed forces – including almost RM9 billion to the police and RM900 million to the MMEA – in its 2018 Budget

Malaysia allocates MYR50 million towards acquisition of coastal radars in 2018 budget

Ridzwan Rahmat - IHS Jane's Navy International

29 October 2017

The Malaysian government will set aside MYR250 million (USD59 million) from its 2018 national budget to enhance security within the Eastern Sabah Security Zone (ESSZONE), the country’s Prime Minister Najib Razak announced via a parliamentary speech on 27 October.

The funds will include MYR50 million to acquire new coastal surveillance radars for the Eastern Malaysian states of Sabah and Sarawak, said Najib, who also announced a 5.3% increase in overall defence spending allocation for 2018.

ESSZONE is a special security area that covers over 1,400 km of coastal areas in Eastern Malaysia. It was established in 2013 following a spate of kidnappings by gunmen that arrived by sea from the Philippines.

Budget Plan for The Malaysian Army

Budget for RMAF

TLDM - Budget for Transformation plan 15to5

ATM Bakal Terima Lebih 20 Aset Menerusi Bajet 2018 

Angkatan Tentera Malaysia (ATM) bakal menerima perolehan lebih 20 aset baharu menerusi Bajet 2018, yang diumumkan semalam, bagi meningkatkan kesiapsiagaan.

Menteri Pertahanan Datuk Seri Hishammuddin Tun Hussein berkata beliau bersyukur dan terharu dengan peruntukan berjumlah RM14 bilion kepada Kementerian Pertahanan dan kerajaan meluluskan apa yang dipohon Tentera Darat Malaysia (TDM), Tentera Laut Diraja Malaysia (TLDM) serta Tentera Udara Diraja Malaysia (TUDM).

"TDM bakal menerima perolehan aset baharu merangkumi enam Light Attack Helicopter (MD 530-G), meriam 155mm Self Propelled Howitzer, meriam 105mm Pack Howitzer dan peralatan khas bagi Gerup Gerak Khas (GGK).

TLDM pula bakal menerima kapal membabitkan enam Littioral Combat Ship (LCS) dan empat Littioral Mission Ship (LMS) yang masing-masing masih dalam proses pembinaan selain merancang memperoleh kapal kelas kelima Multi Role Support Ship (MRSS) di bawah Program Transformasi 15-to-5.

Bagi TUDM, katanya, kerajaan meluluskan perolehan empat unit pesawat Maritime Patrol Aircraft (MPA) yang akan digunakan untuk mengawasi perairan negara termasuk Laut China Selatan dan Selat Melaka di bawah program Malacca Straits Patrol.

Menurutnya peruntukan Bajet 2018 juga akan digunakan untuk memperkukuh tahap keselamatan di Sabah dan Sarawak dengan sebanyak RM22 juta akan digunakan bagi menaik taraf pos kawalan sedia ada serta membina 18 pos kawalan baru di sempadan Sabah/Sarawak dengan Kalimantan.

"Penaiktarafan ini melibatkan lima pos kawalan sedia ada yang akan dinaik taraf menjadi pos gabungan iaitu dua di Sabah (Pos Saliliran dan Pos Serudong) serta tiga di Sarawak (Pos Kandie, Pos Tebedu dan Pos Serikin.

Even LTAT IS HAPPY

And Veteran will have own hospital

RM9 bilion untuk PDRM

Decoupling Mine Warfare From LCS

Every Ship A Minesweeper? Navy Looks Beyond LCS

By SYDNEY J. FREEDBERG JR.

The Expeditionary Sea Base (ESB) Puller is a leading contender to take on mine-clearing missions.

There are maybe half a million sea mines in arsenals around the world. To find and clear them, rather than rely solely on a small fleet of small Littoral Combat Ships, the Navy now wants at least some mine-hunting gear on a vessels ranging from modified oil tankers to catamarans to aircraft carriers.

The approach is similar to the distributed lethality concept, which would put anti-ship missiles on a wider variety of vessels. (More on that below). But offensive operations have never been as marginalized and underfunded as minesweeping. The new plan could finally infuse mine warfare into the mainstream of the Navy — or diffuse responsibility to crews that see it as an unwelcome distraction from their ships’ main mission.

Why the change? Necessity is the mother of this invention. The much-criticized LCS program has been cut back from 55 ships to 28 or 30. Only eight of those ships will routinely carry Mine Counter-Measures (MCM) mission modules. Each MCM package includes various robots — Unmanned Underwater Vehicles (UUVs), Unmanned Surface Vessels (USVs), and an MQ-8 Fire Scout drone — as well as a manned MH-60 Seahawk helicopter. That’s even less mine-clearing capacity than the Navy has now with its badly aging inventory of 11 Avenger-class minesweepers and 27 large MH-53E mine warfare helicopters.

With eight MCM LCS — four on each coast — and typical Navy cycles of maintenance, training at home, and deployment abroad, “what you end up with is about 2.3 LCSs on station at any one time,” Capt. Mark Leavitt, commander of the Navy’s MH-53 wing, told the annual Expeditionary Warfare conference here. “2.3 is not a whole lot.”

So, Levitt and other officers told the conference, the Chief of Naval Operations, Adm. John Richardson, personally ordered a study of one crucial question: “How do we get more capacity?”

The answer: take equipment developed for LCS — helicopter counter-mine kits, drones, unmanned boats, and robot mini-subs — and put it on a wide range of platforms. “We started with a very tight marriage of LCS to MCM and the CNO has corrected us from that,” said Maj. Gen. David Coffman, the Marine who heads the Expeditionary Warfare division (N95) on the Navy staff. The service will still buy the 24 MCM mission modules for the LCS program, but it will break up some of those MCM packages and place bits and pieces on different vessels.

Which Ships?

The top candidate to carry mine clearing gear? The carrier-sized support ship known as an Expeditionary Sea Base. Capable of carrying four huge MH-53 counter-mine helicopters and all their support staff, the ESB also has plenty of room for drones, small craft, and other equipment. The design evolved from the experimental Afloat Forward Staging Base (AFSB) USS Ponce. (The first ESB, Puller, recently replaced the Ponce in the Persian Gulf).

A second candidate is the high-speed catamaran called the Expeditionary Fast Transport (EPF, formerly the Joint High Speed Vessel). While much smaller than the ESB, it’s also much faster — even faster than the Littoral Combat Ship — and has a shallower draft, allowing it to get much closer to shore. For its size, the EPF has a roomy multi-purpose bay able to carry a wide variety of equipment, as well as a helicopter pad (although not a full hangar for long-term operations). One limitation: EPFs are currently crewed by a mix of Navy sailors and civilians, which means it can’t destroy mines under international law, only find them.

While these auxiliaries are the top candidates, the Navy’s also studying outright warships: amphibious ships, destroyers, and even aircraft carriers. For example, all these types of ships can operate the Navy’s workhorse helicopter, the MH-60S Seahawk, which can be fitted with a laser to detect mines (the ALMDS) and mini-torpedoes to destroy them (the AMNS). Leavitt even suggested the Seahawk could be easily modified to carry UUVs and drop them from the air to hunt mines, dramatically expanding their reach. The Navy’s also experimented with unmanned mine-hunters deployed directly from a destroyer’s deck. Many ships can also embark an Expeditionary Mine Counter-Measures (ExMCM) team, which uses inflatable boats to deploy UUVs and divers.

From Distributed Lethality To Distributed Mine Warfare?

Overall, this new concept for mine warfare looks a lot like the fleet’s new approach to anti-ship weapons. Two and a half years ago, the Navy declared that it would no longer rely almost entirely on its aircraft carriers for offensive firepower against another fleet. Instead, it would upgun a wide range of ships, from destroyers to LCS to auxiliaries, with anti-ship missiles, an approach dubbed distributed lethality. As Rear Adm. Peter Fanta said at the time, “If it floats, it fights.”

So is this distributed lethality for mine warfare, I asked the officers who briefed the new concept at the conference. Is the new maxim, if it floats, it hunts mines?

“Yes,” said Coffman, plus there’ll be MCM units ashore.

“That’s potentially very true,” added Navy Capt. Hans Lynch, who leads the mine warfare branch (N952) under Coffman (italics ours). “When we actually have an incident, we’re going to actually need to mass MCM capability quickly, and I can’t imagine a scenario when we have enough LCS to actually mass that capability as quickly as we need it.”

“So I think shore-based makes a lot of sense,” Lynch continued. “ESBs make a lot of sense, EPFs make a lot of sense, coalition (i.e. allied) platforms, and really I think there are opportunities for even DDG-1000 (destroyers): They have enough room that we can put a USV or UUV onboard. Even aircraft carriers or some of our big-deck amphibs could support a lot of the mission platforms that we have.”

Budget 2018 - summary and review

2018 Federal Budget

Revenue: 239.8b

Allocation: 280.2b (2017: 260.8b)

• Operating Expenditure: 234.2b
• Development Expenditure: 46.0b

2018 Economic Performance

• GDP: 5.0-5.5% (2017:  5.2-5.7%)
• Income Per Capaita: RM42.7k (2017: RM40.7k)
• Fiscal Deficit: -2.8% of GDP (2017: -3.0%)
• Foreign Reserves: RM428.7b (as at Oct 2017)

2018 Budget Focus

1. Invigorating investment, trade and industry.
2. Moving towards TN50 aspirations.
3. Empowering education, skills and training, and talent development.
4. Driving inclusive development
5. Prioritizing the well-being of rakyat and providing opportunities to generate income.
6. Fortifying the fourth industrial revolution and digital economy.
7. Enhancing efficiency and delivery of GLCs & public service.
8. Balancing between the worldly and hereafter.

2018 Simplified Budget Highlights

1. Tax

Income Tax

• Reduction income tax rates 2% (RM20k-70k income bands)
• Tax exemption 12 months women re-entry workforce after 2 years work break
• 50% rental tax exemption for rent RM2k below
• Employer tax deduction for hiring PWDs (Persons With Disabilities)

GST

• Local authorities services: No GST
• Magazines and comics: No GST
• Management and maintenance of stratified residential buildings: No GST
• Construction of school buildings and places of worship from donations: Full GST relief

2. Financial Aids & Cash Handouts

• BR1M: continued (cap remains at RM1.2k)
• Malaysian Children Trust Fund (ADAM50) RM200 for children born 2018-2022
• Schooling Assistance: RM100
• Senior Citizens: RM350 allowance / mth
• PWD: RM50 allowance / mth
• Paddy Farmers: RM600 / 3 mths
• Civil Servants: RM1.5k bonus; Retired Civil Servants: RM750
• Civil Servants: min pension RM1k
• Imam, Bilal, KAFA and takmir teachers: RM1.5k and monthly allowance RM850
• Tok Batin & Village Heads: RM1.5k
• FELDA Settlers: RM5k

3. Education

• Science, Technology, Engineering, and Mathematics (STEM) Centre establishment
• Computer Science and programming modules for primary and secondary school students
• Upgrading 2,000 classrooms to 21st Century Smart Classrooms
• RM250 book voucher assistance
• RM2.2b scholarships
• RM3k for parents of Orang Asli on enrolment to IPTA
• MyBrain: Post-graduate studies
• 14 new sports complexes

PTPTN

• PTPTN discount continued (20% full settlement; 10% for 50%; 10% regular deduction)
• Loan repayment begins 12 months after (previously 6 months)
• Combining of multiple higher study loans with repayment after completion higher study

4. Housing

• Low cost-homes and affordable housing
  • PPR: 17.3k units
  • Rumah Mesra Raykat: 3k units
  • PR1MA: 210k units
  • PPA1M: 25k units
  • MyBNHomes: 600 units
  • MyDeposit & MyHomes: 2k units
• Step-up financing PR1MA for private developers
• Stamp duty exemption for loan agreement and letter of consent to transfer
• Joint-home financing between spouse/parent-child as long one applicant is a public servant

5. Women & Childcare

• 2018 Women Empowerment Year
• Maternity leave private sector: increase 60 to 90 days
• Maternity total leave: increase 300 to 360 days (max 90 per year)
• GLCs, GLICs & Statutory Bodies min 30% women on board of directors
• Childcare centre requirement for all new office buildings

6. Investments

SSP1M (Previously known as SSPN)

• For children’s higher education
• Matching grant RM500 with total contribution RM500 (withdraw only after age 18)
• RM6k tax relief extended until 2020
• 
  

SP1M (Simpanan Persaraan 1Malaysia or 1 Malaysia Retirement Savings Scheme)

• For self-employed, without a fixed income and business owners
• Increased matching to 15% capped at RM250 annually (previously 12% capped RM120)
• Extended until 2022

8. Logistics

• Airports Upgrading: Penang Intl, Langkawi Intl, Sultan Ismail Petra, Mukah and Sandakan
• Abolish tolls: Batu Tiga (Shah Alam), Sungai Rasau (Selangor), Bukit Kayu Hitam (Kedah), and Eastern Dispersal Link (Johor)
• ECRL: Port Klang – Pengkalan Kubor
• MRT2: Sungai Buloh-Serdang-Putrajaya
• High Speed Rail Project KL-Singapore
• Pangkor Island: Duty Free Status
• Digital Free Trade Zone (DFTZ): 1st phase construction in Aeropolis, KLIA

9. Capital Markets

• Duty stamp exemption for contract note of ETF and Structured Warrants (3 years)
• Tax relief for VC
• Tax deduction for angel investors in VC

10. Other

• Hiring maids directly without requiring agent
• Easy loan for Food Truck 1 Malaysia (FT1M)
• E-hailing application for registered taxi driver: RM5k grant

Malaysia’s Budget 2018 Summary

Prime Minister Datuk Seri Najib Tun Razak  has proposed an allocation of RM280.25 bil for  Malaysia Budget 2018 on Friday 27 Oct 2017.

Here are the main points of his speech :

– A total of RM280.25bil has been allocated for Budget 2018, an increase of RM19.45bil over the 2017 budget allocation of RM260.8bil.

– Malaysia's income per capita is expected to rise to RM42,777 by 2018, median monthly income in the country has risen from RM4,585 in 2014 to RM5,288 in 2016

Budget 2018 has eight core thrusts.

– The first thrust is to enhance investment, trade and industry.

– Amount of domestic investment is expected to increase by 6.7%.

– Private investments are expected to touch RM260bil in 2018, in line with goals to make the private sector an engine of growth.

– Pulau Pangkor to be declared a tax-free zone (excluding liquor, cigarettes and motor vehicles).

– RM30mil allocation for the Malaysian Healthcare Travel Council (MHTC) to implement initiatives, among them to promote Malaysia as the Asian Hub for Fertility Treatment, IVF and Cardiology; to introduce the Flagship Medical Tourism Hospital Programme.

– Construction of the MRT3 or Circle Line to be completed by 2025, earlier than the initial target of 2027.

– The second thrust is towards achieving TN50 aspirations.

– Every Malaysian child born from Jan 1, 2018 until 2022, will be given RM200 worth of Amanah Saham units in new fund called Amanah Dana Anak Malaysia 2050 or ADAM50.

– RM2.2bil for scholarship grants under the Public Service Department (JPA), Higher Education Ministry and Health Ministry

– RM400mil for research grants and development for public universities, including special allocation to Universiti Malaya to become one of the Top 100 universities globally.

– RM90mil allocated for MyBrain Programme for 10,600 people to further their studies at the Masters and Doctorate level.

– University and Form Six student to continue receiving book vouchers worth RM250, benefiting 1.2mil students.

– RM1bil for initiatives spanning FitMalaysia, National Sports Day, athlete programmes, grassroots programme and the national football development programme.

– RM20mil for the Bukit Jalil Sports School to upgrade its facilities as a premier sports school.

– Third Thrust: Excellence in Education Development, Training, Skills and Talent, a total of RM61.6bil for this sector

– RM550mil allocated to special fund for improvement and upkeep of schools, as follows:
RM250mil for national schools; RM50mil for Chinese schools; RM50mil for Tamil schools; RM50mil for Mubaligh (missionary) schools; RM50mil for full boarding schools; RM50mil for Maktab Rendah Sains Mara, RM50mil for government-aided religious schools.

– Government to extend discount on repayment of PTPTN loans until Dec 31, 2018, grace period for PTPTN loan repayments extended to 12 months after graduating, loans for those furthering studies can now be combined.

– Fourth Thrust: Driving inclusive development

– RM6.5bil Budget 2018 allocation for rural development includes:
RM2bil for the Pan-Borneo Highway; RM1.1bil to upgrade bridges, streetlights, villages, surau and markets; RM1bil for SKMM to upgrade the communication infrastructure and broadband facilities in Sabah and Sarawak; RM934mil for rural road projects, including almost RM500mil for Sabah and Sarawak; RM672mil for electricity supplies, including RM620mil for Sabah and Sarawak involving 10,000 rural homes; RM420mil including almost RM300mil for Sabah and Sarawak provided for clean water supply involving 3,000 homes; RM500mil allocated for the Public Infrastructure Maintenance Programme and Basic Infrastructure Project; RM50mil for mapping and measurement of custom lands, in which RM30mil is for Sarawak and RM20mil for Sabah.

– Almost RM9bil allocated for Royal Malaysian Police, including RM720mil to build 11 headquarters and six police stations, purchase of new firearms and operational vehicles, RM170mil to upgrade ICT equipment, including 1PDRMnet system.

– Over RM14bil allocated for the Armed Forces, including RM3bil for purchase and maintenance of defence assets and RM250mil for Esscom to enhance coastal security controls in Sabah and Sarawak.

– Fifth thrust: Prioritising well-being of rakyat and income-making opportunities

– two percentage point reduction in income tax for the middle income (M40) group with household income of RM9,000 and below, benefiting 2.3mil taxpayers.

– Individual tax rate reduced by two percentage points, for those with chargeable income from RM20,000 to RM70,000.

– Move to increase rakyat's disposable income by around RM300 to RM1,000, resulting in an estimated excess of RM1.5bil in disposable income.

– New tax rates for three income brackets as follows:
1) RM20,001 to RM35,000 (3%)
2) RM35,001 to RM50,000 (8%)
3) RM50,001 to RM70,000 (14%)

– Over 261,000 people no longer have to pay income tax.

– Budget 2018 still includes up to RM3.9bil in subsidies, for items, goods and transport, cooking gas, flour, cooking oil, electric subsidies and toll.

– Toll collection to be abolished at Batu Tiga and Sungai Rasau in Selangor; Bukit Kayu Hitam, Kedah and at Eastern Dispersal Link, Johor from Jan 1, 2018.

– Mandatory maternity leave for private sector to be increased from 60 to 90 days; women returning to work after two years to enjoy tax exemption for 12 consecutive months.

– RM27bil allocation to improve healthcare, including RM1.4bil to upgrade and maintain health facilities, medical equipment and ambulances; RM100mil to upgrade hospitals and clinics electrical/wiring systems.

– Cost of hiring foreign domestic helpers to be reduced, employers can employ foreign domestic helper directly from nine source countries without going through an agent.

– Zero-rate GST for all reading materials, extended to cover all magazines, comics, journals and periodicals from Jan 1, 2018.

– Sixth thrust: Preparing for the fourth Industrial Revolution and the Digital Economy

– RM5bil for Green Technology scheme, RM1.4bil for non-revenue water programme, RM1.3bil for off-river storage, RM517mil for flood mitigation.

– RM83.5mil for Phase 1 DFTZ Aeropolis; minimum value for imports raised to RM800 from RM500 so Malaysia can be the regional e-commerce hub.

– Seventh thrust: Enhancing efficiency and delivery of government-linked companies (GLC) and public service.

– GLC employees to enjoy increased benefits such as flexible working hours, childcare centres in offices.

– Increase allowance for senior citizens to RM350 per month, RM50 increase for working and unemployed People with Disabilities (PWD) as well as caretakers.

– Eighth thrust: Balancing between the par excellence of the worldly and the hereafter.

– Retirement benefits for public servants who retire on medical reasons.

– Cash in lieu of accumulated leave of more than 150 days during the retirement year.

– Women more than five months' pregnant and husband can leave work an hour earlier, provided both working in the same location.

– Maximum of 90 days maternity leave a year, total leave allowed is now 360 days.

– Minimum pension of RM1,000 per month.

– Medical facilities extended to parents of retirees.

– Special assistance of RM1,500 to Village Heads and Tok Batin

– Upgrading and maintaining wiring systems in all registered religious schools by GiatMara

– Monthly allowance and one-off RM1,500 payment for imam, bilal, Kafa and takmir teachers.

– A special payment of RM1,500 be given to all public servants, RM1,000 in January 2018 and the balance during Hari Raya Aidilfitri.

– Special payment of RM750 to Government retirees, RM500 in January 2018 and the balance during Hari Raya Aidilfitri.