Budget 2017 tech highlights

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The 2017 Budget was just revealed by the Malaysian Prime Minister Datuk Seri Najib Tun Razak and it contained quite a lot of interesting allocations. But what about tech? Well, here’s what you need to know.

Mobile devices

First up, let’s look at mobile devices. The Prime Minister announced today that there is good news for the taxpayers when it comes to mobile devices. According to the Prime Minister, there are currently 21 categories of individual tax reliefs. To facilitate taxpayers in claiming existing tax reliefs, the purchase of reading materials, computers and sports equipment will be combined under the lifestyle tax relief.

This relief will also be expanded to include the purchase of printed newspapers, smartphones, tablets, internet subscriptions and gymnasium membership fees. Further, this relief will be given up to RM2,500 per year and will be effective from year of assessment 2017.

This is a rather big change from the existing tax relief options which are rather scattered. Currently, you get RM1,000/year for reading materials (that does not include newspapers), RM3,000/3 years for the purchase of computers, and RM300/year for sports equipment. Now, everything seems to be lumped together under one yearly tax relief.

For civil servants, the Prime Minister also announced that the 2017 Budget will be extending the existing Computer Loan facility to encompass the purchase of smartphones too. Civil servants will be able to utilise this loan once every three years up to a maximum of RM5,000 — that’s enough for a 256GB iPhone 7 Plus!

When it comes to students, the Prime Minister revealed that the government will be doing away with the book vouchers and will instead be introducing a student debit card worth RM250. This card can be used to purchase books, stationery, computer accessories and internet access. This new card will benefit 1.3 million students.

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Teachers (430,000 of them), on the other hand, will receive assistance from the MCMC as RM340 million has been allocated to provide the teaching force with free tablets to ease their teaching tasks.

Fixed-line broadband services

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More good news comes in the form of the fixed-line broadband services UniFi, Streamyx, Maxis Fibre, Time Broadband, etc. The Prime Minister announced that by January 2017, fixed-line broadband service providers will be offering services at a higher speed for the same price.

An example he gave was that if a subscriber was paying RM149 for a 5Mbps package, the subscriber would be able to enjoy a two-fold speed upgrade — that’s 10Mbps — without a change in pricing. That’s great news, though he did not specify if every service speed would be doubled. Still, more speed is always better right?

Besides that, the Prime Minister also stated that within the next two years, the very package that he said would go into effect in January would have its speed doubled while having its price cut by 50%.

What’s more, he also said that the government would be launching an initiative for ethernet broadband services in public universities to be increased to a maximum of 100 gigabits per second.

He also revealed that the Malaysian Communications and multimedia Commission (MCMC) will be providing assistance in the form of RM1 billion to ensure that the coverage and quality of broadband nationwide “reaches up to 20 megabits per second”. We’re not quite sure if that means an average of 20Mbps or a minimum of 20Mbps, but considering the fact that 4G LTE speeds and fixed broadband lines from UniFi and Time Broadband have far surpassed 20Mbps, we’re hoping it’s the latter.

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Either way, the implications of this could be huge, especially concerning doubling the speed and halving the prices of fixed-line broadband services. As things stand currently, it looks like consumers will benefit the most from these measures set out by the 2017 budget. You get double the speed for half the price, and that looks great, but only for the short term. Until we get more information, we should also consider how things might pan out in the long run as well if things continue the way it is.

Firstly, accomplishing the two measures set out by the 2017 Budget could negatively impact the average revenue per user (ARPU) for fixed-line broadband service providers. With lower revenue, less money is going back into the business to invest into network expansion and growth. This could negatively impact the network quality and sustainability in the long run

However, there is also the third aspect to consider — the RM1 billion from the Government that’s set to be invested in ensuring the coverage and quality of broadband nationwide reaches 20Mbps. Right now, we’re not quite sure where that money will be coming from and how it will be distributed which makes it a little difficult to factor into the whole equation.

Ride-sharing services

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During the 2017 Budget announcement today, the Prime Minister actually stated that the government will encourage the rakyat — specifically the BR1M recipients and those who have vehicles — to become ride-sharing drivers. According to him, part-time Uber drivers can earn up to RM1,500 monthly with just a maximum of 40 hours per week and RM4,300 monthly for more than 40 hours per week which would go a long way to generate additional income for the household.

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Part of their plan to encourage citizens without vehicles to become ride-sharing drivers, he says that they can use the BR1M (which has now been increased to RM1,200 for households earning less than RM3,000 and RM900 for households earning RM3,000 to RM4,000) to make a new car’s down payment. If that new car is a Proton Iriz, a rebate of RM4,000 will be provided as well.

What’s interesting to me is the choice of car. Why an Iriz if you want to encourage people to be an Uber driver? Wouldn’t a sedan like the Proton Saga make more sense? Not only does it have a larger luggage space in the trunk, it’s also significantly cheaper.

And that’s it. What do you guys think of the 2017 Budget? Drop your thoughts in the comments below!

For the full text of Prime Minister Datuk Seri Najib Tun Razak’s speech, head on over to the PM’s blog.