Malaysia's Prime Minister's budget speech (part 2)

A continuation of Prime Minister Datuk Seri Najib Tun Razak's Budget 2012 speech in Parliament Friday:

51. The water supply infrastructure in Federal Land Development Authority (FELDA) areas is more than 50 years and is not operating efficiently to meet current needs. This resulted in a critical shortage and disruption of water supply in certain FELDA areas, particularly in Pahang, Kedah, Kelantan and Terengganu. Hence, the Government will provide RM400mil to upgrade the water supply infrastructure in selected FELDA areas.

52. There are still estates without clean water. To overcome this, the Government will allocate RM50mil to connect the reticulation system in the estates to the main pipes. The Government also agrees that Water Supply Authorities apply the domestic tariffs for estate workers' quarters instead of the industrial tariffs charged currently. The Ministry of Human Resources will coordinate and monitor the implementation of these programmes.

53. To provide greater access to banking services for the rural population, Bank Simpanan Nasional (BSN) will appoint agents in the rural areas nationwide. In the next three years, BSN will appoint 5,000 agents. Services to be provided include saving and withdrawal transactions, payment of bills as well as purchase of Premium Savings Certificate. BSN will provide RM50mil for systems development, training of agents and operational costs.

54. The rural community frequently encounter difficulties arising from unreliable bus services. To provide a more comfortable, reliable and quality service, an additional RM150mil will be provided to the Public Transport Development Fund in the SME Bank. Stage, mini and school bus operators can apply for soft loans with an interest rate of 4%, to purchase or refurbish buses. This financing facility will be available from 1 January 2012.

55. The development and welfare of Orang Asli continue to be an important Government agenda. Currently, there are 190,000 Orang Asli nationwide with the majority residing in Pahang and Perak. For 2012, the Government will allocate RM90mil for the provision of basic necessities which include expanding the clean water supply project as well as income generating programmes. The Government empathises with the Orang Asli affected by the landslides at Sungai Ruil, Cameron Highlands. To ensure the safety of those affected, the Government allocates RM20mil for relocation to new housing areas.

56. The 2012 Budget will transform the civil service to be dynamic, responsive and centred on excellence. This includes a radical change in recruitment, placement as well as career development. A flexible remuneration system will be introduced to retain or terminate civil servants based on performance. Civil servants must accept this challenge and be prepared to change. Hence, the Government will introduce the New Civil Service Remuneration Scheme or SBPA as follows: First: Introduce an exit policy for underperforming civil servants and for those who opt to leave the service; Second: Improve the salary of civil servants through a single tier structure with additional increments to enable civil servants to continue receiving annual increments over a longer period. With this, the maximum salary for a particular grade will be higher. For example, under SSM, a teacher on grade DG48 receives a maximum salary of RM6,325.39, while under SBPA the maximum salary will increase 37.7% to RM8,710. For non-graduate teachers on grade DG34, the maximum salary under SSM is RM3,860.52 while under SBPA, will increase 39% to RM5,370; Third: In my recent Teachers' Day message, I announced a better career path for graduate teachers. A teacher no longer has to wait 20 years to be promoted. In the new scheme with a time-based promotion, a teacher will achieve grade 44 on the eighth year and grade 48 on the 16th year of service. For non-graduate teachers under the current time-based system it will take 10 years to be promoted from grade 29 to 32, while under the SBPA it will only take eight years. Currently, promotions from grade 32 to 34 are based on vacancies. However under SBPA, a time-based eight years promotion will be applied; and Fourth: The Annual Increment has not been revised since 1991. Beginning 2012, the annual increment of civil servants will be increased between RM80 and RM320 according to the grade. In addition, civil servants who opt to accept the SBPA will receive an annual increment between 7% and 13%.

57. The Government realises the financial burden faced by pensioners. With the implementation of SBPA, more than 600,000 Government pensioners will benefit from a pension adjustment which involves an allocation of RM600mil. Effective 2013, the Government will implement an annual pension increment of 2% without having to wait for any review of the remuneration system or salary adjustments.

58. Advances in technology and medical science, low birth rates and aging population will have a significant impact on the burden of gratuities and pension payments. This phenomenon is inevitable and is faced by matured economies. Malaysia too will be in similar situation if the present retirement age is not extended.

59. Civil servants between the ages of 55 and 60 are capable of contributing based on their skill and experience. Therefore, the Government will extend the compulsory retirement age from 58 to 60 years old to optimise civil servants' contribution. This extension will not jeopardise employment prospects for the younger generation as the public and private sectors will continue to create new job opportunities.

60. The Government holds to the philosophy and principles of self-improvement as well as life-long learning. For effective policy implementation, civil servants must equip themselves with knowledge and be able to think analytically and dynamically through life-long learning.

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