26 Oct 2016

Malaysia Budget 2017: What’s Going On in Education

Yes, it’s that time of the year again for another round of our nation’s federal government budget for the upcoming year. Last Friday, our Malaysian Prime Minister, Datuk Seri Najib Tun Razak unveiled the much-anticipated Malaysia’s Budget 2017.

Embracing the theme “Accelerating Growth, Ensuring Fiscal Prudence, Enhancing Well-being of the Rakyat”, Budget 2017 seeks to tackle cost of living with emphasis on housing, food as well as transportation.

But what about education? Particularly, how does the Budget 2017 affect you as a student who’s about to set foot into higher tertiary education?

Forget about scrolling through tabs of news updates, we’ve dug deep into the details of the budget to bring you a rundown on the salient points impacting the higher education sector.

#1. Fuzzy figures for government scholarship programmes

As highlighted by Datuk Seri Najib Tun Razak in Line 230 of the Budget Speech 2017, scholarships for outstanding students will carry on with an allocation of RM4.3 billion in 2017.

In comparison to Budget 2016, it appears that the amount allocated for next year’s scholarships has decreased in certain key departments.

Department2016 Budget2017 Budget SpeechDifference
Public Services Department (JPA)RM1,661 milRM1,600 mil- RM61 mil (-3.7%)
Ministry of Higher Education (MoHE)RM251 milRM250 mil- RM1 mil (-0.4%)
Ministry of Health (MoH)RM258 milRM208 mil- RM50 mil (-19.4%)
Ministry of Education (MoE)RM388 milRM194 mil- RM194 mil (-50%)
Majlis Amanah Rakyat (MARA)N/ARM2,000 milN/A
Ministry of Human ResourcesRM 39 milRM28 mil-RM11 mil (-28.2%)
Ministry of Youth and SportsRM 21 milRM21 milN/A

However, upon closer inspection of the Estimated Federal Expenditure documents released by the Ministry of Finance, the amount allocated for scholarships, bursaries and education assistance seem to only amount to RM1.815 billion instead of the announced RM4.3 billion.

Based on our analysis of the Estimated Federal Expenditure reports, here are the key departments with budgets allocated for scholarships and study grant programmes.

  • Public Services Department (JPA): In the Estimated Federal Expenditure for Public Services Department (B.7 – pg 675), only RM4.1 million was reflected in contrast to the announced allocation of RM1.6 billion.
  • Majlis Amanah Rakyat (MARA): A new capital expenditure for Program Penajaan Pendidikan MARA under Ministry of Rural & Regional Development (B.22 – pg 286) was spotted. Only RM1.3 billion was reflected in contrast to the announced allocation of RM2 billion.
  • Minister of Higher Education (MoHE): In the Estimated Federal Expenditure for Ministry of Higher Education (B.64 – pg 681), only RM750,000 was reflected in contrast to the announced allocation of RM250 million.
  • Minister of Health (MoH): In the Estimated Federal Expenditure for Minister of Higher Education (B.42 – pg 679), nothing was reflected in contrast to the announced allocation of RM208 million.
  • Minister of Education (MoE): In the Estimated Federal Expenditure for Minister of Higher Education (B.63 – pg 681), only RM159 million was reflected in contrast to the announced allocation of RM194 million.
  • Perkhidmatan Am Perbendaharaan: In the Estimated Federal Expenditure for Minister of Higher Education (B.11 – pg 676), Perkhidmatan Am Perbendaharaan has emerged with an allocation of RM304 million. Allocation for scholarships and education assistance under Perkhidmatan Am Perbendaharaan did not exist prior to Budget 2017.

As the scholarship woes press on, what does this mean for fellow students?

If the figures in the Estimated Federal Expenditure reports are what’s binding (instead of the allocated figures from the Budget 2017 speech), this would mean a huge cut in next year’s scholarships by 31.4 percent, with JPA scholarships being hit the hardest. Students should expect a very stiff and strenuous competition for the upcoming year’s scholarship spots.

A seemingly bleak future in the realm of education scholarships, it is indeed a disheartening scene that we hope will turn around.

Disclaimer: The discrepancies spotted are based on our regular methodology of analysing our nation’s official federal budget reports. Do note that our observations could be inaccurate should there be any unspoken changes or recategorisation of departments’ allocation by the Ministry of Finance. We have reached out to the Ministry of Finance regarding the fuzzy figures and will update once we have clarification. Do stay tuned for further updates.

#2. Close to 20 percent of spending cuts at 15 public universities

Overall, public universities in Malaysia will be bearing the brunt of the cuts in their combined operating budgets for 2017 by about 19 percent. Out of the 20 public universities, 10 of them will be sustaining massive cuts ranging from 10 percent to over 31 percent).

The two top-ranking institutions who suffer the biggest cutbacks are Universiti Teknologi Mara (UiTM) and Universiti Kebangsaan Malaysia. While UKM bears with a whopping drop of 31.16 percent from its 2016 allocations, UiTM will be losing the most in terms of value with RM563 million, withdrawn from its operating expenditure.

This is clearly a big blow to some of the nation’s top universities, especially for UPM and UTM which recently broke into the Top 300 of the QS World Universities Rankings 2016/17.

Taken as a whole, the budget of RM6.12 billion for the 20 public universities in 2017 is an even deeper cut than the previous year, amounting to a reduction of RM1.46 billion versus the RM1.18 billion cut from 2015 to 2016.

#3. 1Malaysia Book Voucher scheme replaced with student debit card programme

In his official Facebook page, Prime Minister Datuk Seri Najib Razak recently highlighted the necessity for students in higher learning institutions to be granted access to not only books, but also on other learning accessories as well. The outcome?

The 1Malaysia Book Voucher programme will soon be replaced with student debit cards worth RM250.

The student debit card programme now gives you the green card to not only purchase books and stationeries alone but also on computer accessories and heck, even Internet access.

The scheme was initially conceived to ease students’ burden while cultivating a healthy interest in reading among Malaysians. According to Prime Minister Datuk Seri Najib Razak, the initiative strives to benefit about 1.3 million students.

#4. Incentives to encourage PTPTN repayment

Since the inception of National Higher Education Fund Corporation (PTPTN) in 1997, there has been close to 2.49 million of PTPTN borrowers.

With our government setting up more stringent rules around the repayments of PTPTN earlier this year, it is of no surprise that PTPTN was also one of the highlights of Budget 2017.

In an effort to bolster the repayments of PTPTN loans, our government has initiated the following incentives:

  • 15 percent discount on the outstanding debt for full settlement (read: 15 percent discount if you clear off your total debt in one shot)
  • 10 percent discount for payment of at least 50 percent of the outstanding debt made in a single payment
  • 10 percent discount for repayment through salary deduction or direct debit in line with the repayment schedule
Take note: The incentive above will be effective starting from 22nd October 2016 till December 2017.

#5. Allocation of RM50 million to boost graduate employability

As an effort to lift the unemployment issue, Budget 2017 also sees an allocation of RM50 million to the 1Malaysia Training Scheme (SL1M) programme in order to raise the number of graduates trained from 15,000 in 2016 to 20,000 next year.

Since its inception in 2011, the 1 Malaysia Training Scheme (SL1M) has been striving to assist young unemployed graduates in enhancing their marketability to land a job. The programme has successfully moulded 71,000 young folks over the years through its initiative of placing participants with government-linked companies (GLCs) for on-the-job trainings.

What do you think of Budget 2017? Drop us your views in the comment section below! Scholarships are not the only way out of your financial rut, here are 7 Other Ways to Fund Your College Education.

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