Hope that the MPs would unite for the vote on Budget 2021 in order to deliver the best budget for the people during this time of unprecedented crisis seems to have been realised. However, consistent efforts and benefits need to be guaranteed for the people, not only in the short term but in the long term as well.
The inaugural budget of the Perikatan Nasional government was passed at the policy stage yesterday through a voice vote after the winding-up speech by Finance Minister Tengku Zafrul Aziz.
It appeared to be well supported due to the positive considerations and revisions made by the government on significant measures, as proposed by MPs from both sides, such as for a blanket loan moratorium and on withdrawals from EPF Account 1.
For loan moratoriums, a targeted, automatic moratorium will be implemented to assist vulnerable borrowers in the B40 group as well as micro-SMEs. Applications will be approved within 24 hours, with no documents required from borrowers.
This implies that the government hopes this measure will reach and support the affected borrowers without delay.
M40 borrowers meanwhile will have to make self-declarations with banks, also without documents.
The withdrawal of savings from EPF Account 1 (i-Sinar) has also been made more flexible, allowing all members who have experienced a loss of income to draw down savings up to RM10,000. This expanded coverage is expected to increase the number of beneficiaries from two million as announced on Nov 16 to eight million.
As relieving as this is to eligible beneficiaries, the services offered by EPF’s Retirement Advisory Services and/or the Credit Counselling and Debt Management Agency should be utilised in order to provide appropriate withdrawal options for members as this involves their hard-earned retirement savings.
Other positive developments observed from the winding-up speech include the expanded coverage for the eBelia programme. It had been hoped that the government would expand the RM50 e-wallet credit to a larger youth population above the age of 20 as the youth are seen as one of the key drivers in digital adoption.
The government’s decision to increase the e-wallet credit amount from RM50 to RM100 and extend the benefits to students aged above 20 studying in higher educational institutions should be lauded and welcomed.
But there remains a crucial need to look into sustainable measures in order to ensure long-term social safety nets for the people.
At the end of the day, EPF savings still need to be replaced for post-retirement use, and borrowers eventually need to repay their loans.
The government needs to ensure a sufficient allocation for long-term policy measures for the people’s livelihoods, namely job creation and the upskilling and reskilling of labour for job transitions to address the longstanding issues of unemployment and underemployment.
One helpful measure which was introduced in the Penjana stimulus package is the reskilling and upskilling programmes and their extension as announced in Budget 2021.
Another one will be the implementation of the Employment Generation Guarantee Scheme (JanaKerja) next year which is projected to produce 500,000 new job opportunities.
These would be some of the ways to help address unemployment which has been hovering at around 700,000 from April this year until the latest available data in September.
But another bigger issue that has been understated is underemployment, particularly among graduates. The heavy blow from the unprecedented pandemic has made it worse as businesses are still performing cost-cutting measures due to uncertain economic conditions through layoffs, pay cuts and hiring freezes.
The latest statistics released by the Department of Statistics show that skills-related underemployment has been on an increasing trajectory, up from 29.9% in 1Q17 to 36.8% in 3Q20.
Although graduate employability is increasing, the mismatch between wages and qualifications should not be underestimated. This matter needs to be considered by policymakers and industry players to ensure fair opportunities for qualified jobseekers.
Employment and fair wages for workers would result in positive spillovers to the economy such as the stimulation of consumer spending which, in return, would help businesses.
As mentioned by DAP senator Liew Chin Tong, Budget 2021 is an opportunity for bipartisanship and this was reflected in the cooperation between MPs in the budget measure considerations.
However, these measures can still be enhanced to ensure that the benefits flow, not only in the short term but, more importantly, over a much longer period of time.
Sofea Azahar is a research analyst at 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.