Friday, February 26, 2021

Budget 2021, a good start but more can be done

Underprivileged university students and those in vulnerable groups should be given more aid.

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Tidak perlu surat polis rentas negeri hantar anak ke asrama

Ibu bapa hanya perlu menunjukkan surat yang dikeluarkan pihak sekolah semasa melalui sekatan jalan raya.

No police permit needed to cross borders for school

Parents only need to show letters issued by the schools at police roadblocks.

MIC leader questions ‘fickle-minded’ Umno chiefs

MIC deputy president M Saravanan says the party will only decide based on discussions in Barisan Nasional.

In Perikatan Nasional’s inaugural budget, which is also the largest budget in Malaysian history with an allocation of RM322.5 billion (2020: RM314.7 billion) delivered in the midst of an unprecedented crisis, the government took into consideration the views of various stakeholders with not only sympathy but also empathy, to save lives and livelihoods by formulating the budget based on three main goals: the people’s well-being, the continuity of business, and economic resilience.

Initiatives to address unemployment and underemployment

With unemployment and underemployment becoming more evident among graduates, supported by our focus group discussion (FGD) findings, we proposed an extension of the hiring and training incentives announced in Penjana in order to correct the mismatch between supply and demand of talents.

It is good to know that hiring incentives (PenjanaKerjaya) have been enhanced and that various more initiatives have been announced.

Firstly, workers earning at least RM1,500 a month will have incentives raised from RM800 a month to 40% of their monthly salary up to RM4,000. An additional incentive of 20%, equivalent to 20% of workers’ monthly income, is also provided to employers to hire the disabled, long-term unemployed and retrenched workers, as well as an increased subsidy for training costs from RM4,000 to RM7,000.

Starting next year, the government will also launch Skim Penjanaan Pekerjaan (JanaKerja) worth RM3.7 billion which will provide 500,000 new employment opportunities through various upskilling and reskilling programmes.

An allocation of RM1 billion has also been provided for upskilling and reskilling programmes in year 2021 involving various government agencies.

The introduction of Short-Term Employment Programme (MySTEP) in the public sector and GLCs beginning January 2021 is also a positive move to provide employment opportunities albeit on contractual basis.

Lastly, specifically for youth who are part of the vulnerable groups, a higher incentive of RM1,000 will be given to private employers for apprenticeships for 50,000 new graduates.

Increase social protection for vulnerable groups

Since the pandemic, evidence has shown that the incomes of B40 households have been below pre-pandemic levels due to retrenchments, pay cuts, and difficulties in resuming businesses. Their social protection status is also worrying as many have low knowledge about it or are affected by employers’ low concern about employee welfare.

EMIR Research had proposed that the government increase the quantum of cash assistance given to households via BPN or Bantuan Sara Hidup (BSH), and realise the suggestion of increasing the Social Welfare Department’s (JKM) monthly assistance for vulnerable groups to RM1,000.

The coverage of cash transfers (Bantuan Prihatin Rakyat or BPR), ranging from RM350 and RM1,200 has also been expanded to some M40 households, as well as to singles aged below 21.

We likewise welcome the government’s assistance to increase JKM’s monthly aid for vulnerable groups: non-working OKUs (from RM250 to RM300), the elderly, carers of OKUs, and chronic patients (from RM350 to RM500), disabled workers (from RM400 to RM450), B40 children aged seven to 18 (from RM100 to RM150 each, up to RM450 per family), and for B40 children aged six and below (RM200 each, up to RM1,000 per family).

Perhaps what needs to be done alongside these incentives is to monitor the sufficiency of welfare aid on an annual basis to ensure that they are in line with the rising living costs that need to be borne by vulnerable households.

Targeted EPF Account 1 withdrawal

Due to the people’s concerns about low savings and emergency funds amid the economic crisis that has yet to subside, many have requested for withdrawals from EPF Account 1.

Hence, EMIR Research proposed a temporary permission with a limit according to age group – a staggered withdrawal over six months for members aged 40 and above with total withdrawal not exceeding 20% of total savings, and a higher cap for those below 40 of 30% of total savings.

It was delightful to see in the budget the government attempting to address the people’s financial anxiety by allowing those who have lost their jobs to withdraw RM500 a month for up to 12 months beginning next January.

This initiative will be alongside existing initiatives such as i-Lestari and the reduction in monthly EPF contributions from 11% to 9%.

Nonetheless, some proposals by EMIR Research were not fulfilled in the hoped-for manner and require enhancements for the sake of the people’s well-being.

Extending blanket loan moratorium until end-2020

EMIR Research proposed a three-month extension of the blanket loan moratorium until end-2020, given the prolonged economic uncertainty and mounting financial anxiety since the pandemic and the end of the first phase of the moratorium.

But instead of a blanket moratorium, banks decided to enhance the targeted loan repayment assistance in order to assist borrowers in the B40 group who are BSH, now known as BPR, recipients, and micro entrepreneurs with loans of up to RM150,000, as well as M40 borrowers.

Given that many people are still suffering from the heavy blow caused by the pandemic and the continuation of movement restrictions particularly evident for the hardest-hit sectors such as tourism, manufacturing and retail, financial fears remain.

In our FGD findings for 3Q20, a consistent narrative was displayed about those in the B40 exhibiting signs of the most severe financial distress. The urban poor also require more assistance, as revealed in our poll findings.

Fears are increasing that once the moratorium is lifted, it will lead to increased lay-offs, hence making it crucial for the blanket moratorium to be realised.

Cash assistance for unprivileged university students

Lastly, not much assistance was announced for unprivileged university students. Prior to budget day, EMIR Research proposed that the government extend the coverage of BPN or BSH to include students during the movement control order period, perhaps with a particular focus on underprivileged households such as the B40 and part of the M40 groups.

However, only a small share of students in B40 households are provided with monthly welfare assistance according to their age group – seven to 18 years old (from RM100 to RM150 each, up to RM450 per family).

Based on our FGD findings, students find it extremely difficult to cover their living expenses due to the rising cost of living. This forces some of them to take on part-time jobs to survive while studying. Many of them are compelled to stay on campus away from their families because they find it hard to commit to online learning due to poor internet connectivity or a non-conducive environment at home.

Therefore, a larger coverage of cash aid is needed to support students who have to experience this unfortunate situation, perhaps up to the age of 21.

Margarita Peredaryenko and Sofea Azahar are part of the research team of independent think tank EMIR Research.

The views expressed in this article are those of the author(s) and do not necessarily reflect the position of MalaysiaNow.

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