My views on the Mini Budget

The RM60 billion stimulus package is bold but I feel that more could be done to increase the confidence of the business community as well as the people in general, especially the vulnerable groups. In short, the government needs to bring back the “feel good feeling” to boost consumer spending and investor confidence – a situation where the people is not too scared or worried to spend and the businessman is confident of better times ahead.

Greater efforts must be done to rectify the unemployment situation. While I laud the government’s move to help retrenched workers by offering companies tax incentives to employ retrenched workers, I feel that the focus should be directed more on helping employers to retain their workers. At this time of uncertainty, few companies would be able to afford to take in new workers. The challenge is more to retain their existing workers and not have to retrench them. For this, I feel that the government should help employers by giving them cash rebates for contributions to the Employees Provident Fund, similar to Singapore’s Jobs Credit Scheme. The MCA had proposed that the government pay 10 percent of the 12 percent contribution by employers to the EPF. I urge the government to seriously look into this so as to preserve jobs in the current economic downturn.

I agree that preserving jobs and helping the unemployed and new entrants to the employment market get jobs is a tall order for any government. The DPM has pointed out that the unemployment rate for this year is expected to be 4.5 percent compared to 3.7 percent in 2008. Since October 2008, when the crisis first hit us, 25,000 workers have been retrenched and nearly 31,000 have been temporarily laid-off. The challenge for the government is to ensure that the local workers are not asked to leave before the foreign workers. I agree that this is a very fragile situation. It is a fact that locals have long shied away from certain jobs which they considered dirty, dangerous and demeaning – commonly known as the 3Ds. And employers from these sectors have no choice but to take in foreign workers or they risk having to stop operations. With Malaysia having enjoyed a technical full employment rate for years, Malaysians can afford to be choosy. Some have even opted to work in other countries which offered higher pay to do the same work. But Malaysian workers have to know that times have changed. Jobs are scarce not only here but in other countries as well. Maybe it is time for employers and workers to find an equilibrium that would encourage Malaysians to take over such jobs from foreign workers.

Measures outlined in the Mini Budget put emphasis only on the demand side with little focus on the supply side. I feel that to strengthen consumer confidence, more should be done to liberalize the economy. For this, I hope the government will come out with more specific guidelines on the new role of the Foreign Investment Committee as announced by the DPM. Removing any doubts or hindrances will make Malaysia a more investor friendly place for FDIs. The government should also help to ease the setting up of new businesses by short circuiting the process of obtaining licenses, possibly by capping the period between application and approval, similar to what the government had done for the issuance of Certificate of Fitness for buildings.

Finally, of utmost importance is that the measures outlined in the Mini Budget must be implemented swiftly and effectively.Hidden text