The recently tabulated Budget 2015 saw a number of benefits for the people at large, including not only financing for first time home buyers, various incentives for entrepreneurs and women, reduction in tax brackets, and raise in BR1M. These and some other obvious key benefits are the ones that have been repeatedly reported in various online and print media.
However, if you look closer and deeper (and perhaps, read between the lines), there could be more benefits that you could reap out of this budget.
1. Infrastructure – Property investment
With the budget allocations for the construction of five new highways and the further extension of the MRT and LRT project, housing areas within the vicinity of these upcoming infrastructure projects and public transportation hubs may see property prices sky rocket even higher. While this may seem like a red flag for young individuals or couples who are intending to secure their first home, it can prove to be a green flag for property investors. Areas involved are:
For example, currently, a double-storey link house in Shah Alam starts from approximately RM680,000. In a few years when the highway and LRT extension projects are completed, it may even exceed RM1 million. Quick access to key areas is a great selling point. As such, this can be a good investment opportunity for property investors as they can own these properties today and observe the price rise, before selling it off for a handsome profit.
2. Child care – Employee retention
With various initiatives outlined under Budget 2015 for women, there will surely be an increase in young mothers re-entering the workforce. Thus, an increased in the need for domestic maids, babysitting and day-care centres, can be expected.
Besides that, the Government has also encouraged the establishment of child care centres at the work place in the private sector. Sounds like a good deal for the employees. But, what do employers get out of this?
Child-care issues has been one of the key reasons why mothers leave the workforce. This has caused high turnover, absenteeism and demotivation in many companies. Child care benefits the employers who sponsor it by improving employee morale, reducing turnover and absenteeism, and increasing productivity. It allows working parents to focus in their work knowing well that their children are well taken care of, resulting in better work quality.
For example, after Maybank established their Tiger Cubs Childcare Centre, they saw their retention rate increase to 85% in 2014 from 52% in 2008, saving them the cost of recruiting, hiring and training their staffs.
3. Tax savings – Investment and savings
The new tax bracket system best benefits the higher income group. The higher income you earn, the bigger the savings you will make on income taxes. For example, an individual with an annual income of RM120,000 will be able to save RM2,000 on tax payment every year (see calculation). For those who can do without the additional savings, they can channel these savings into an investment, rather than spending it off.
For novice investors, they can kick-start their investment in various options with just RM1,000. The experienced ones can utilise this to top-up their savings in high-yield fixed deposits, bonds, Amanah Saham, unit trusts or even buy shares. The money can be the start of a long-term investment plan, or it can be stashed away into the savings on the house down-payment or holiday trip to Bahamas!