Budget 2010 Logo

Our PM Datuk Seri Najib Tun Razak has just revealed the annual budget for the year 2010, which is his first since taking office on April 3rd 2009. The RM191.5 billion budget would be the final budget under the 9th Malaysia Plan.

The Government expects the economy to grow by about 3% next year. The premier revealed that the budget for 2010 will focus on the ‘rakyat’ and aims to turn the Malaysian economy into a high-income economy.

Apart from unveiling various plans and measures to further improve the overall economy under the budget that is themed “1Malaysia, Together We Prosper”, the PM also briefly spoke about the local automotive industry and issues that relate to motorists.

MyKad Petrol

First of all – one of the most important things for motorists – the combustible stuff we put into our cars so they can move. The Prime Minister says the fuel subsidy currently given to the public is being utilized by people who don’t deserve the subsidy.

The Government plans to introduce a fuel subsidy management system to determine the eligibility of a citizen, to find out whether she or she is eligible to enjoy the subsidy. The system is to be implemented in early 2010 and will incorporate the use of the MyKad. We’ve already saw a potential vendor demonstrating their ePetrol system at the WCIT 2008 (picture above). Not much other details regarding this was revealed.

There will also be a implementation of a new insurance and Takaful scheme for motorists. According to the PM, right now the structure of the motor insurance scheme is rigid (premiums are fixed) and fails to take into account rising business costs and claims. So in mid-2010, a new system will be introduced that will include an affordable ‘basic’ insurance and Takaful scheme.

The premium for the insurance will be figured at an ‘appropriate’ level and will be on par with the level of coverage. The scheme will provide mandatory coverage for bodily injuries and the death of a third party. Policy holders will also receive their compensation expeditiously without delays. I have a nagging feeling that this means the cost of entry to get a motor insurance policy will be low but to get the same amount of coverage we enjoy now, we’ll be paying higher prices.

Also announced is a RM10,000 price tag for an Open AP (Approval Permit). The change will be implemented on January 1st 2010 and a portion of the proceeds will be channeled to the automotive sector of Malaysia’s “Dana Pembangunan Bumiputera”. Four years ago in 2005, a total of 17,526 Open APs were issued. If the figure is used as a gauge, the Government can potentially earn over RM175 million. I wonder how the grey importers will deal with this new cost to them – will the buck be passed onto customers?

There was nothing revealed on the National Automotive Policy review in the Budget so we’ll have to continue waiting for updates on that issue.

Look after the jump for the full Budget 2010 text.

PM Najib’s 2010 Budget – English
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PM Najib’s 2010 Budget – BM
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PM Najib’s 2010 Budget – List of Appendices
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