4. And I, for one, believe that we, as a nation, as Malaysians, are far from that. This is a country shaped by the remnants of maritime trade and empires. Constructed out of a cornucopia of class, creed and colour. Yet, in times of adversity, we the people come together in the spirit of resilience and unity that will tide us through any tough times.

5. The Belanjawan Madani that I unveiled two weeks ago laid down the foundation of a Malaysia that I and many other Malaysians have long envisioned…. a Malaysia MADANI that puts Malaysians, especially the poor, the marginalised and the vulnerable, irrespective of creed and colour, at the heart of its development.

6. For the uninitiated, allow me to address the thrust behind Malaysia MADANI. Broadly, it is a vision that is designed to revive, renew and re-energise — as driven by its key values of Sustainability, Prosperity, Innovation, Respect, Trust and Compassion.

7. And we aim to reshape the narrative of our country based on three priorities: growth, reform and justice.

Ladies and gentlemen,

Driving economic growth that is inclusive and sustainable

8. I will focus on growth first. Specifically, growth that is inclusive and sustainable.

9. Current estimates of global economic performance warn of headwinds ahead. Analysts and researchers point to a global growth of 1.7% in 2023, a slowdown compared to 2.9% in 2022, and well off the rebound of 6% in 2021.¹ The probability of a US recession within the next 12 months occupies strategic debate, and we are certainly exposed to these risks.

10. While global inflation shows signs of peaking, the estimation is that it will only move downward rather slowly. Bank Negara Malaysia reports Malaysian headline inflation averaging 3.4% for the period of January-November of 2022. It is expected to moderate, but still remain at elevated levels amid lingering demand and cost pressures.²

11. The good news is that ASEAN is emerging as a defensive harbor — GDP growth for the ASEAN-5, excluding Singapore is estimated to remain resilient at 4.7% in 2023, down from 5.9% in 2022.³ China, a key economic engine and for us, a key economic partner, is in the process of its own reopening — the timing and extent of which we are all watching eagerly.

12. For 2022, we achieved a stellar GDP growth of 8.7%. The Government projects that Malaysia will achieve a 4.5% GDP growth in 2023, which would still be a notable achievement given the global economic environment.

13. In general, 2022 was driven by a combination of economic recovery as most sectors returned to work, as well as large- scale pandemic recovery measures. While these actions were necessary to protect ordinary Malaysians, one thing stands true: it was delivered at a heavy cost.

14. The Federal Government Debt now sits just below 61% of GDP, with the statutory limit being at 65% of GDP, having been raised twice during the pandemic. Taken together with contingent liabilities, our total debt is RM1.5 trillion4 or 81% of GDP.

15. Let us also be frank and recognize two key points:

One: Can we activate and implement everything all at once? Clearly, the answer is no. There must be a sensible progression as well as the fiscal responsibility to maximize our means, and yet still work within them.

Two: Recognize that people of ordinary means are under increasing economic pressure even for basic matters such as feeding, sheltering and ensuring the future progression of one’s family.

16. Sensibly, one must build, secure and enable the ladders that will help the nation escape the middle-income trap, and for those at the very bottom, help them climb out of the despair of poverty. Without this, all is in vain.

17. Belanjawan Madani is designed to address these challenges head on through fiscal reforms, rebuilding our fiscal buffers and economic, fiscal and debt resilience.

18. What we have done, as a practical and pragmatic first step, is to largely maintain the level overall spending. However, allocations have been strategically readjusted to better serve the nation and rebuild the critical core and aspirations of Malaysian society at large.

19. I had the opportunity of meeting various successful home- grown startups such as Carsome, Oppstar and Farm Fresh. My administration is committed to support high value-add local startups from early stage right up to listing onto Bursa Malaysia. Towards this,

- GLICs will set aside RM1.5 billion in 2023 to invest in such home grown startups;
- a tax deduction will be provided on listing costs for companies listing on ACE, LEAP as well as technology stocks onto the Main Board; and
- listed companies will be allowed issuance of dual class shares.

20. We certainly want to ensure that successful startups will have access to later stage financing here in Malaysia, so that they do not need to seek listing abroad.

Ladies and gentlemen,

Reforming institution and governance to restore confidence

21. The Fiscal Responsibility Act and Government Procurement Act are key pieces of legislation moving forward. For too long, issues such as wastages, leakages, lack of transparency and accountability have hampered the best efforts to move the country forward. Which brings me to the Government’s second priority of reforming institution and governance.

22. The scourge of corruption, ill-gotten gains and bribery have no place in this nation. The people deserve far better, and so do the businesses and the investors who are drawn to our unique advantages.

23. The reforms we have made, and the ones we will make in due time, all concern this area of wastage and loss — for instance, transparency in procurement award and quality execution of any government business is now a rule, not a mere norm.

24. While some question this administration’s forthrightness in highlighting issues of this nature, believing that it casts aspersions on our national image, we believe the opposite. To start rebuilding confidence in our future, we must be honest about the problems that we face today.

25. I have said this many time, and I will repeat it here again. This Government adopts a zero-tolerance approach towards misconduct and corruption.

26. We will uphold the highest ethical standards and there will be no room for abuse of power under this administration. Any breaches will be severely dealt with, without fear or favour.

27. Good corporate governance must remain the basis on which businesses, companies and shareholders operate. It is also necessary to ensure that good governance provides robust safeguards for investor protection and the stability of the financial and capital markets.

Ladies and gentlemen,

Upholding social justice to combat inequality

28. The third priority for this Government is to uphold social justice to combat inequality.

29. The nation’s economic expansion and growth should be achieved in the wider context of human economy that

prioritises the people’s needs, especially the poor and marginalized. We must free them from poverty’s grip, perpetuated some could say by an unbridled capitalist system that has nurtured inequality in wealth and living standards.

30. The measures in Belanjawan Madani deal with the eradication of hardcore poverty and minimizing the burden of cost of living. The poorest must be lifted out of this curse and be given access to that all important first rung of the economic ladder, so that they can then begin climbing.

31. The Inisiatif Pendapatan Rakyat (IPR) or the People’s Income Initiative, is a powerful platform to correct this societal imbalance. It works through providing opportunities for the poor to increase their income potential in farming as well as in food and general maintenance service providers.

Ladies and gentlemen,

Technology and the growth of a green economy

32. Alongside these key infrastructure developments, the establishment of technology hubs in Penang and Johor, as well

as the potential of Sabah and Sarawak in terms of competitive energy costs — these areas have attracted much interest and even begun securing approved investments.

33. As technology and the virtual or even the metaverse advances, our connectivity still matter as a major trading nation. In this respect, the process to expand and improve airport capacity in Penang and Subang, led by Malaysia Airports Holdings as well as sea-access via Sanglang Port in Perlis and a main port in Pulau Carey are key elements.

34. Green business is not only crucial to economic sustainability, but also for all life and its attendant qualities. Malaysia is blessed, our home is also home to some of the world’s oldest rainforests, and our seas share an area recognised as one of the richest reservoirs of biodiversity. These are natural God- given assets — to protect them and value them highly is a must.

35. In terms of assets we must build for ourselves in this area. Through Bank Negara Malaysia, we will provide financing to support green technology startups, while also helping SMEs implement low-carbon practices. Other forms of support in this

area come in the form of a Green Technology Financing Scheme, Investment Tax Allowance and Income Tax Exemption for eligible activities.

36. Alongside runs an enhanced focus in investments in green growth areas including hydrogen technology, bioenergy and electric mobility — enablers of green adoption across sectors as well as future economic engines.

37. A key part of the emphasis in these areas is ensuring that Malaysians also gain from the transfer of high-tech knowledge and skills, while prioritizing research and development efforts. It is one of the areas for the further development of Technical and Vocational Training - or TVET- that is being redesigned for greater participation of private sectors, while in conventional academia, updates on university syllabi are being developed.

38. I look forward to projects in this field growing into a position where they can make use of Malaysia’s Voluntary Carbon Market that is operated by Bursa Malaysia.

39. Launched in December last year, the Bursa Carbon Exchange or BCX, is a vital catalyst in the acceleration towards a net-zero

future. Notably, it is the first exchange in the world to receive a Shariah pronouncement for its Carbon Exchange.

40. To support the national journey to achieve Net Zero as early as 2050, I am pleased to announce that the Government is committing to a seed fund amounting to RM10 million to act as an assured demand of Malaysian-generated carbon credits to kickstart the market.

41. Clearly, when talking about a viable future for the environment where respect for the planet and quality of life are driving principles, it is a natural fit for further development and support through Islamic finance, a field where Malaysia has long been recognised as a global leader.

42. The Government is committed to enhance the Islamic finance ecosystem further so that it can drive real societal change, especially through the optimization of waqf.

43. In this regard, the Securities Commission Malaysia will, with effect from 3 April 2023, extend the Waqf-Featured Fund Framework to include Islamic Real Estate Investment Trusts (REITs) and Islamic Exchange Traded Funds (ETFs).

Ladies and gentlemen,

Constantly evolving & responding, Malaysia is open

44. The New Investment Policy is a forward-looking framework to ensure we remain ready to cater to changes in the global economy and to spur investment in future growth sectors. In many ways, it guides, facilitates and helps implement reforms to strengthen the fundamentals of our investment ecosystem.

45. We are open to innovation in emerging opportunities: part of this is dealing with the review of Intellectual Property policies to address issues such as ‘evergreening’ or artificial extensions of market exclusivity that exists in certain sectors. Efforts are also underway to improve the government’s advisory services for local companies and entrepreneurs in their efforts in creating and exploiting IP.

46. We are open to agile incentives: this includes fiscal and non- fiscal incentives on a more sector-agnostic basis, to enable agility in catering to evolving technologies and global priorities
– including projects that exist in the fields of renewable energy, the digital economy as well as research and development that cuts across sectors.

47. We are open (and keen) to better meet needs of companies and investors. I understand there are parties who are concerned with respect to the Government's announcement to study Capital Gains Tax on unlisted shares at a low rate.

48. I would like to give you the Government's commitment that:

- First, the tax will only be finalised upon extensive engagement with stakeholders;
- Second, the tax will not be introduced on listed shares; and
- Third, the disposal of unlisted shares for an approved Initial Public Offering will also not be subject to Capital Gains Tax.

49. Bursa Malaysia serves as an important avenue for companies to raise capital for growth via the primary market. With the growing need for companies to scale their businesses, I am pleased to note that the SC together with Bursa Malaysia will introduce the LEAP Market Transfer Framework for companies to migrate from the LEAP Market to the ACE Market.

50. At the same time, Bursa Malaysia will introduce a new Recognised Approved Adviser Framework that will expand the pool of advisers for the ACE Market.

51. Lastly, we are open to the demands of ESG: Not only are we open, we seek to accelerate the transition and transformation of industries and local players towards ESG adoption, even for SMEs. For example, through MITI, consultation and engagement with local and international stakeholders is ongoing to develop the National ESG framework for the manufacturing sector by 2024.

52. Malaysia is taking a leadership role in the low carbon journey, by bringing a platform to help companies measure, monitor and drive reduction in carbon.

53. In this regard, I am pleased to announce that next month, Bursa Malaysia, working with the London Stock Exchange Group (LSEG), will be rolling out a Centralised Sustainability Reporting platform.

54. This will enable companies, both public listed companies as well as non-listed SMEs, to calculate their carbon emissions impact. It will also help them to disclose standardised common ESG data in a way that conforms to established global standards.

55. This platform has the potential to be a key enabler to Malaysia’s pivot to green, and to support our sustainable development, while creating high skill jobs for our progress towards a high- income nation.

Ladies and gentlemen,

56. I am often asked about the state of the nation’s political climate. As a Unity Government, we are committed and upfront about building and steering the nation together, in a cohesive and constructive manner.

57. This cooperation also drives and coordinates efforts, and provides the basis for greater local autonomy to get working on addressing inequalities. This is crucial in reworking the longstanding economic imbalances not only between Peninsular Malaysia and Sabah and Sarawak, but also the urban and rural divide.

58. We may be a relatively young nation, but our path to political and democratic maturity has been a steep yet steady climb, especially within the last decade.

59. The reshaping of the Malaysian narrative is a continuous work- in-progress. I strongly believe that in building Malaysia MADANI, the greatest barrier to progress lies within us.

60. May the Almighty give us the strength and fortitude to move past these challenges together and rewrite the new narrative for Malaysia.

Thank you.