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1.0 INTRODUCTION
The government has played a crucial role in ensuring that the nation’s wealth
is enjoyed by the citizens in a fair and equitable manner. Thus, it’s becomes the
responsibility of the government to plan for the citizens. Due to the global economic
crisis that affected our countries, it makes difficult for the government to plan wisely.
However, today global economic crisis has showed a strong sign of recovery and this
requires the government to plan the resources wisely. The resources are plan and
present as a budget. Every year, Ministry of Finance is responsible for planning the
budget for the citizen.
Budget 2010 was presented by Minister of Finance or our Prime Minster,
Dato’ Sri Mohd Najib Tun Razak on 23rd October 2009 at Dewan Rakyat. The theme
of Budget 2010 is “1Malaysia, together we prosper. Budget 2010 is the last budget for
9th Malaysian Plan. It is the foundation of the development of new economic model
and a precursor to the 10th Malaysian Plan.
Malaysia has successful in transforming its economy form agriculture based to
the industrial based. Now, Malaysia is moving to the new economic model. This new
economic model is based on innovation, creativity and high-value added activities to
remain competitive in the global economies. Innovation is an important agenda for
Malaysia, as the government will transform Malaysia through comprehensive
innovation process. The innovation includes private and public sector governance,
societal, urban, rural, corporate, industrial, education, healthcare, transport, social
safety net, and branding innovation. The government is serious in implementing those
innovations to promote Malaysia to be in advanced economy.
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Budget 2010 focuses on the well-being of the citizens and achievements of
National Key Result Areas (NKRAs). This budget is also emphasize on advancing the
role private sector as the driver of economic growth, developing high-skill human
capital, and increase the efficiency of the public sector. There are three strategies that
are focused by the government on this budget which are driving the nations toward a
high income economy, ensuring holistic and sustainable development, focusing on the
well-being of the citizens. There are so many programs that are implemented by the
government to run those strategies such as strengthening ICT industry, PERMATA,
advancing agriculture sector, and so on.
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2.0 DEFINITION
Innovation is a change in the thought process for doing something, or the
useful application of new inventions or discoveries. It may refer to an emergent
changes in thinking, products, processes, or organizations. The goal of innovation is
positive change, to make someone or something better. Due to innovation it may
leading to increasing in productivity which is the fundamental source of
increasing wealth in an economy (www.businessdictionary.com).
In the organizational context, innovation may be linked to performance and
growth through improvements in efficiency, productivity, quality, competitive
positioning, market share, etc. All organizations can innovate, including for example
hospitals, universities, and local governments. Each organization must constantly
change with the current situation. If it is still a long notch with no change to
excellence, then it would lose in competition.
While innovation typically adds value, innovation may also have a negative or
destructive effect as new developments clear away or change old organizational forms
and practices. Innovation can be described as the result of some amount of time and
effort into researching an idea, plus some larger amount of time and effort into
developing this idea, plus some very large amount of time and effort into
commercializing this idea into a market place with customers.
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3.0 FEDERAL GOVERNMENT BUDGET 2010
The pie chart above shows the Malaysian Federal Government budget for
2010. The components of government budget comprises of planned revenue and
expenditure of the government. The estimated revenue for the year 2010 was RM
189,499 million. This showed a decreased in government revenue as compared to year
2009. There are 6 sources of Malaysian government revenue which are from income
tax, borrowing and use of government assets, export duties, import duties, non tax
revenues and other taxes, and indirect taxes. The income tax was the largest sources
of revenue which is 38.3% from total revenue. Non-tax revenue was 25.4% of the
total revenue where it comes from various sources such as licensing, registration
payment, and permits, payment of services such as court, port, rental, and any others.
The income that gained from indirect taxes was about 12.9%. The government
borrowing and the use of government assets were about 21.7%. The other two
revenues were import and export duties, 0.9% and 0.8% each.
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The second component of budget is the expenditure. The expenditure of
Malaysian government was divided into two parts which are operating expenditure
and development expenditure
The operating expenditure is the expenses incurred by the government to
finance the operation of the government. The estimates operating expenditure for year
2010 was RM138, 279 billion. It covered the emolument (RM 42.2 million), debt
service charges (RM 15.9 million), supply and services (RM 20.8 million), pension
and gratuities (RM 10.8 million), grants and transfer to state government (RM 4.9
million), subsidies (RM 20.8 million), and other expenditure (RM 22.7).
In the other hand, for the development expenditure, the estimated expenditure
for 2010 was RM 53,220 million. The development expenditure refers to the expenses
incurred by the government to develop the country. The development expenditure is
divided into four major sectors which are economic, social, security, and general
administration. This development expenditure also includes government saving for
the contingencies. For the year 2010, government had allocated RM 25.4 billion for
economic sector that will cover infrastructure, industry, and agriculture development.
For social sector, a sum of RM 20.3 billion was provided to improve the education,
health, welfare, and community development. For security sector, RM 3.7 billion had
been provided by the government to develop the security system such as defence and
internal security. For general administration, government had allocated RM 1.8 billion
for the development of general administration of the country. Lastly, for the
contingencies, government had allocated RM 2000 billion. The purpose of these
contingencies is to prepare if something happen to our country.
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4.0 INNOVATION STRATEGIES IN BUDGET 2010
4.1 Innovation in Public and Private Sector Governance
The essence of the 2010 Budget a lot written and implied. To ensure that all the three
strategies it is achieved. First, to drive the country towards high-income
economies. Second, to ensure a holistic and sustainable development and final, well-
being of the people. In order to achieve the first and second strategy it requires the
close cooperation of public and private sectors. The result is the well-being of the
people. Two factors that should be considered to be achieved first and second
strategy are to strengthen governance and boost innovation, creativity, productivity
and value added in the two sectors. In the context of public services, innovation can
be implemented in various aspects including customer management, work culture,
strategic management and organizational leadership, human resources, finance and
assets, information and communication technology (ICT), project management and
development
4.1.1 Implementation of Privatisation Initiatives
This initiative where government will reduce involvement in economic activities in
areas where it competes with private sector. This second wave of privatisation aim to
enables companies to operate more efficiently as well as reduce their financial
dependence on government. For this government will privatise companies under
Ministry Of Finance and other viable government agencies. Therefore, through this
privatisation it will enable government to enhancing governance as it will lessen the
burden of government as through privatization under Ministry of Finance, the GLC’s
and other agencies did not fully independent in government like in the past when its
end up to force government to help pay its debts receivables (bailouts), amounting to
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hundreds of millions of dollars. Thus government can focusing in providing a better
services in others fields that is more important such as education and so on.
4.1.2 Combating Corruption
The efforts aim at enhancing confidence and public perception, eliminating corruption
among enforcement and public officers as well as to ensure Government Procurement
procedure are followed.
First: Formulate a Whistle Blower Act to encourage informers to disclose
corruption and other misconduct.
Second: Establish 14 Special Corruption Sessions Court and 4 Special
Corruption Appeal High Courts.
Three: Enhance the image of Malaysian Anti- Corruption Commission and
also organising International Conference on combating corruption, and
also awareness campaign through mass media.
4.1.3 Intensifying Government Delivery System
In order to intensifying government delivery system, there are various innovation has
been made. Firstly, PEMANDU was established to monitor the implementation of
Government Transformation Programme. It aims at enhancing the efficiency and
transparency of government machinery. Secondly, government also will continue to
strengthen public training institution to produce high quality and knowledgeable civil
servants. On the ground of this INTAN Bukit Kiara will be upgraded to a school of
government with autonomy power. Last but not least, the establishment of cross
fertilisation program between government department and GLC’s that aim to provide
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exposure and understanding on roles and responsibilities between both parties.
Through this program it will place the government officers in private companies and
international agencies.
4.2 Education Innovation
As in the second strategy of budget 2010 is to ensure holistic and sustainable
development to enable the country to become a high-income economy, it requires a
high quality human capital with suitable skills. Thus to produce a high quality human
capital, innovation in education is important. In line with it,
4.2.1 Expanding access to quality and affordable education
Government will allocate RM 30 billion for primary and secondary education. The
allocation includes emolument, student assistance and scholarship program,
construction of 80 new schools as well as 1,100 additional blocks. In addition a sum
of RM 1.1 billion is provided to renovate and upgrade schools nationwide, especially
in Sabah and Sarawak. Through this 4 NKRA sub components will be given attention.
First: Strengthening pre-school education, where government will
incorporate pre- school education as part of mainstream national
education system by increase participation rate of children 5 and 6
years old. For this an allocation of RM48 million will be provided to
renovate all facilities and pre school curriculum under KEMAS as well
as provide training and courses to government and private pre school
teachers.
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Second: Increase literacy and numeracy rate, this is where government aim to
ensure that 100% of all normal school children will master basic
literacy and numeracy after 3 years of schooling. The allocation of RM
32 million will be allocated to prepare special modules for student and
teachers and special training program for teachers.
Three: Creating High Performance School, government will identified
schools as high performance school (SBT) to focus on academic
excellence, overall student’s achievement, including discipline,
cleanliness as well as curriculum. The government targets 20 schools
as SBT with an allocation of RM 20 million.
Fourth: Recognizing school principals and head teachers, where government
will ensure that schools are managed and administered professionally
by principal or head teachers. In line with this, New Deal or Bai’ah
will be introducing as an appreciation of contribution and performance.
The government will determine the performance targets that must be
achieved and rewards in term of monetary and non-monetary as well as
autonomy will be given if achieved the targets.
4.2.2 Expanding PERMATA program
This program will emphasise on early childcare and education in an integrated and
organized. Government has provide allocation of RM100 million to implement the
following :
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First: PERMATA Negara involves early childcare and education program for
children under 5 years old. A guideline will b provided in coordinating
curriculum, training and qualifications of trainers at children centres.
Second: PERMATA Seni, which will provide training for talented students in
performing arts implemented by Ministry of Information,
Communication and Culture.
Third: PERMATA Pintar, to guide students with extraordinarily intelligence
to excel. This will be implemented by UKM in collaboration with the
university of Johns Hopkins US. The first intake will be on 2011.
Fourth: PERMATA Insan, aims to educate students to understand, and practice
the fundamental of Al-Quran. This program will be implemented by
Universiti Sains Islam Malaysia for students between 9 to 12.
4.2.3 Strengthening Public Higher Education Institution
This is an effort to strengthen public higher education institution (IPTA) in order to become
more competitive and improving in their world ranking. A greater autonomy will be given for
them in managing finance, human resource, administration, student intake and income
generation ie IPTA are allowed to establish subsidiaries to generate revenue. Government
also will linnet the rules and regulation and give opportunity to IPTA to generate their own
income. This also will reduce the financial dependence on government. But the income
generation activity by IPTA will be observed by government to ensure it not jeopardize their
core business of producing quality human capital.
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4.3 Economic Innovation
In advancing towards a high-income economy, government will take an approach that
based on innovation, creativity and high value added activities. This approach will
increase the more than double per capita income of citizen in the next 10 years.
4.3.1 intensifying Foreign Direct Investment
Through this strategy, Khazanah Malaysia Berhad and Permodalan Nasional Berhad
will enhance the collaboration with foreign investor. In line with this the government
will intensify efforts to attract FDI by allowing equity ownership in companies and
joint ventures in local project. Presently an aggressive step has been taken in order to
attract investors from Middle East, China and India. Currently investor from Saudi
Arabia has invested USD 1.5 billion in a high impact project in collaboration with 1
Malaysia Development Berhad (1MDB), a government-owned sovereign wealth fund.
GLC’s and Private sector companies also must enhance their social responsibility. In
line with this, 1MDB will establish fund total RM100million.
4.3.2 Advancing Agriculture Sector
This sector has significantly contributed to the income of people in rural area and to
economic growth. This sector has the potential to generating income for citizen. Thus
the transformation of this sector needs to be intensified from the cultivation to
marketing the products. On the ground of this, this program were aimed at attracting
more young entrepreneurs, encourage best practices agriculture, and upgrade
agriculture infrastructure. RM 6 billion will be allocating for this sector. the program
that will be taken under this program are:
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First: Implement the incubator Program; this is to train and guide youths and
graduates to be successful agro- entrepreneurs.
Second: Modernize the aquaculture industry; this also will provide a training
scheme for aquaculture breeders with focus on production of fish fry
and ornamental fish
Third: Develop basic infrastructure: This step will develop a basic
infrastructure of livestock farm and establish supply chain for
production of beef and mutton.
Fourth: Upgrade and improve drainage and irrigation infrastructure in paddy
fields involving 180,000 farmers with an allocation of RM137 million.
In line with all the programs, efforts are being undertaken to establish Federal Land
Development Authority (FELDA) will be as national food storehouse and settlement
for large scale food production. FAMA will facilitate the marketing of these products.
In addition to ensure agriculture products are marketed abroad effectively, the cargo
Facilities will be upgraded, and MAScargo will upgrade air cargo facilities for export
Of perishable agriculture products.
4.3.3 Enhancing Implementation of Public-Private Partnership Initiatives
Public- Private Collaboration will be enhanced to enable the private sector to
spearhead economic growth. The high impact project will be taken jointly with the
cooperation among private and public sector. The role of the government is in order to
provide and facilitate the provision of basic infrastructure to ensure the project
viability. The project that will be undertaken in 2010 is the development of an
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Integrated Immigration, Customs and Quarantine Complex (CIQ) in Bukit Kayu
Hitam, construction of 6 UiTM Campuses and the development of MATRADE
Centre.
4.4 Societal Innovation
The government is very serious towards the welfare of the citizens. This is the
essential responsibility of the government towards the citizens. The government
should gives priority to the citizens either in social or economic sector.
4.4.1 Expanding Public Health Facilities
The health problem becomes the important agenda of the government. That is why the
government allocated RM 14, 783 billion on the public health. This allocation is to
manage, build, and upgrade the hospital ad clinic in Malaysia. For year 2010,
government had planned to construct and upgrade the hospitals in certain areas. The
construction and upgrading the hospitals covered the area of Kluang, Bera, Shah
Alam, Alor Gajah, and Tampoi. Besides that, Malaysian government will introduce
community clinic service in the urban area known as 1Malaysia clinic. This
community clinic service is similar with the “klinik desa” at the rural area. The
1Malaysia clinic is located at the housing area to enable the people to get basic health
treatments.
4.4.2 Improving Public Transport
Malaysian government also place the urban public transportation as one of the
NKRA to assist the public I their daily activities. This is because the effective and
efficient public transportation can increased productivity and reduced the traffic
congestion. Among the step taken by government in enhancing public transport is by
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speed up the establishment and operation of the “Suruhanjaya Pengangkutan Darat
Awam (SPAD) as the authority to monitor and enforce service standards and planned
for the long term urban public transportation. The SPAD is expected to operate in
2010. Besides that, government had set up new 8 Electric Multiple Unit (EMU) and
upgrading the 9 EMU. This is done by the KTMB to increase the efficiency of the
commuter service. Furthermore, “Syarikat Prasarana Negara Berhad will be
responsible to acquire 35 units of Light Rail Transit (LRT) for Kelana Jaya-Taman
Melati line. There are 4 units of train that have been delivered and currently operating,
while 22 units will be delivered in 2010, and the remaining will be delivered in 2011.
4.4.3 Eradicate Hardcore Poverty
The government is committed in eradicating hardcore poverty in Malaysia I
the year 2010. In order to eradicate poverty, government had identified 50,000 units
of hardcore poor households and 4,000 “Orang Asli” household that are registered
under eKasih program. Government had provided the opportunities for skill training
and income generating program to reduce hardcore poverty. Some of the measures
taken by the government are distributing federal welfare assistance on the first day in
every month starting on 1st September 2009 for peninsular Malaysia, and 1st January
2010 for Sabah and Sarawak. Besides that, government is also continuing “Skim
Program Lonjakan Mega” in Batang Sadung and Batang Lupar, Sarawak. The
government has allocated RM 141 million for this program. This program will help
5,600 family from hardcore poverty.
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5.0 ISSUES
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