CONSTRUCTION

Infrastructure projects, which have been privatised, are given priority under the infrastructure fund. These projects include Putraj aya, Cyber aya and infra-structural facilities. The govern-ment will also provide RM4 billion for transportation pro-jects, as well as water supply systems.

Measures to help the housing sector were taken earlier, includ-ing loan availability and lowering of interest rates. With infrastructure as a priority sector, we'll be more active in the construction of infrastructure. This year, our turnover is 70:30 from development and construction. Next year, there'll be more from construction.

We'll pursue construction projects in Putrajaya and other gov-ernment jobs. (Setia is constructing the prime minister's office and official residence in Putra-jaya.)

We were doing more of pro-perty projects than construction because profit margins were better in property. Companies have limited resources so we have to deploy limited resources to areas of maximum returns. We're not over-committed. That's whv we're still strong, with cash of RM200 million. This year, we'll see just a small drop in profit.

We have sold about 2,500 housing units this year, including in Putrajaya (1,500 units, of which 90 per cent are for the govern-ment). Next year, we hope to sell about the same number of units but our profits should go up because we'll be developing on land which costs less. Profits from Putrajaya will also start kicking in from next year. So by next year, our profit should go back to before the economic downturn.

Although conditions have improved, we won't flood the market. (Setia is the developer of Pusat Bandar Puchong in Kuala Lumpur, Bukit Indah Bandar Nusajaya and certain precincts in Putra-jaya).

It's a very good budget a budget of confidence. It shows the government is confident of economic recovery, that it can resolve the problems. - C S Taii

PROPERTY

For the property sector, it may be a case of no news, but certainly it is not bad news.

Property consultants and developers acknowledge that the 1999 Budget holds no "goodies" for the industry, simply because the government has done what it can to put the industry back on its feet.

They see positive spin-offs from the RM4 billion allocation for roads, bridges, rail, ports and civil aviation, which they say will enhance accessibility. A facilitator of business activities, the Budget is expected to indirectly generate interest in the hard-hit, over-supplied office property' sector.

Some quarters had hoped for a cut in the real property gains tax (RPGT) and stamp duties. A total exemption has now been given for mergers of financial institutions.

Forecasting a 1.0 per cent growth next year, the Budget will help to further shore up confidence in the economy, something that augurs well for pro-perty development in the long term.

An improved business environment as a result of the go-vernment's efforts to revive bu-siness activities will indirectlv create more interest in commer-cial properties. The ball now is in the court of the property sector. It is up to the players to move forward.

Whatever was needed to be given to the property sector has been done in the last two months. These include the reduction of the SRR (statutory reserve re-quirement) which has translated into more liquidity in the mar-ket, lowering of interest rates and bigger loan allocation from banks.

The commercial sub-sector will benefit from the improved economic outlook. The infrastructure spending outlined in the Budget will help to spur the economy. Think of the jobs that it will create...

Secondary landed house transactions in the Klang Valley have picked up signihcantly in the last four weeks.

There are also signs of interest fromI end-users in t he hard-hit Office space in selected areas like Jalan Tun Razak and Petaling Jaya, although those in areas like Shah Alam will have to wait their turn.

TRAVEL

Travel companies will he givern income tax exemption on income from domestic tour packages in which at least 1,200 local tourists a year participated. These tour packages have to provide at least one night's accomodition.

The proposal will encourage more tour operators to package competitive and high quality domestic tours.

What is clear from this budget for us is that the government has adopted a two-pronged strategy to grow the country's tourism industry, namely through the existing tax exemption on income derived from packages with at least 500 inbound tourists in incoming international traffic, and the new proposal to raise the growth of domestic tourism. the quota of I ,200 local tourists a year is not a tall order for most local agencies. With this incentive, tour operators will market local destinations even more aggressively. (Sferas is a major player in domestic tourism, working closely with Air Asia and the Malaysia tourism Promotion Board). The proposal is unclear in defining the profile of a local tourist. We know the incentive is on Malaysians but what about expatriates who are working in this country? It would benefit the country for expatriates

to travel with in Malaysia instead of going home for holidays. Expatriates do travel extensively around the country.

The government's second incentive on growing the tourism industry, which is a holiday for onr saturday in a month, will help grow the weekend t ravel traffic.