Incentives proposed for automation in Budget 2020 will help boost business confidence in investments, said Malaysia Automotive Robotic and IoT Institute (MARii) CEO Datuk Madani Sahari according to Bernama. “The government has taken a step in the right direction in spurring smart manufacturing, particularly in incentivising the adoption of automation technology to boost productivity and quality,” Madani said.

The announcement of the extension for the Accelerated Capital Allowances (ACA), as well as matching grants for 2,000 manufacturing and services companies is a welcome step as investment decisions are a key consideration for businesses, especially for small and medium enterprises (SMEs) within the automotive and mobility sectors, he said.

Increased allocation for technical and vocational education and training also adds a new dimension to the automation adoption process, as human capital development is essential for a sustainable technological ecosystem, Madani said. This goes hand in hand with financial considerations for the adoption of smart automation within the industry, while reducing the country’s dependence on foreign labour, he added.

The Malaysian government has extended the year of assessment for the Accelerated Capital Allowance and automation equipment capital allowance in the manufacturing sector on the first RM2 million and RM4 million incurred on qualifying capital expenditure to 2023, finance minister Lim Guan Eng said at the tabling of Budget 2020.

The government has also allocated RM550 million for smart automation matching grants of up to RM2 million per company to 1,000 manufacturing companies and 1,000 service provider companies in order to automate their business processes, the report said.