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#Economic Report 2011/2012* RM17b for fuel subsidies

KUALA LUMPUR: The Federal Government expenditure is expected to increase by only 0.7% to RM181.584 billion from RM180.283 billion in 2011 and RM151.633 billion in 2010, according to the Economic Report 2011/2012.

It said subsidies were expected to increase by 1.2% to RM33.197 billion in 2012 (from RM32.798 billion in 2011) and RM23.106 billion in 2010, with fuel subsidies accounting for more than half of the 2012 subsidies.

Of the RM33.197 billion in subsidies, the Report said various subsidies would be RM22.50 billion, incentives (RM854 million) and social assistance programmes (RM9.8 billion).

"Fuel subsidies will, however be allocated a higher sum of RM17 billion or 9.4% of operating expenditure in anticipation of firm crude oil prices," it said.

The report said emoluments were expected to increase by 4.2% to RM52.017 billion (RM49.913 billion) due to the new civil service reform effective Jan 1, 2012.

Provision for debt service charges was expected to rise by 10.5% to RM20.453 billion (RM18.517 billion), grants to state governments up 6.1% to RM5.846 billion (RM5.511 billion).

However, pensions and gratuities were expected to decline by 6.7% to RM12.088 billion (RM19.957 billion).

But supplies and services were expected to rise 3.2% to RM30.480 billion (RM29.532 billion), grants to statutory bodies up 8.1% to RM14.451 billion (RM13.368 billion) and refunds and write-offs down 29.6% to RM11.69 billion (RM16.604 billion) while for others, it was expected to fall sharply by 29.6% to RM11.69 billion from RM16.604 billion.

The report said development expenditure was expected to be allocated RM49.2 billion or 21.3% of total expenditure. The provision was to fund the rollout of prohects and programmed unse the second rolling plan and transformation initiatives under the NKRAs (RM6.4 billion), NKEAs (RM3.5 billion) and SRIs (RM41.5 million).

"A sum of 662 million is also set aside, among other, to settle final payments for the 9MP projects," it said.

Meanwhile, 60.5% of the total development expenditure in 2012 or RM29.8 billion would be allocated for the economic services sector.

Of the RM29.8 billion, a total of RM10 billion would be transport and infrastructure development, RM5.8 billion to upgrade public utilities while RM5.1 billion would be to build capacity in trade and industry while RM1.9 billion would be to boost agriculture and rural development.

Social services:  Education
For the social services sector, the report said RM13.6 billion had been allocated for 2012, of which RM8.5 billion was for education and training — RM2.4 billion for higher education, RM2.8 billion for primary and secondary education and RM1.2 billion for industrial skills training.

The report said 90 new school projects, including 12 hostels would be built. It RM777 million would be set aside to refurbish and upgrade schools nationwide of which schools in rural areas in Sabah and Sarawak would receive RM534 million.

The report said research activities at universities would be stepped up and this would see RM484 million allocated, while lecturers would be given the opportunity to pursue PhD programmes (RM432 million).

Healthcare
It said RM772 million would be allocated to upgrade hospitals including Hospital Kuala Lumpur, Hospital Putrajaya, Hospital Queen Elizabeth Kota Kinabalu and Hospital Kangar. Also RM575 million would be allocated for building new hospitals and clinics.

Housing
Under the government's policy to provide adequate housing for the low-income group, the report said RM546 million was allocated for three housing programmes.

Security
The security sector would be provided RM4.4 billion to beef up the uniformed personnel's capacity and capability. Also RM112 million would be allocated to reduce crime in the crime prone areas.

As for ICT, the government was allocating RM1.4 billion for various projects in government departments (RM674 million), while the building, upgrading and maintenance of quarters, courts, district and land offices and other federal government buildings nationwide would receive RM459 million.

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