LETTER | Penjana: 'Making Malaysia Great Again', with low unemployment!

LETTER | Hot on the heels of Prihatin, the Malaysian prime minister has unveiled a Short-Term Economic Recovery Plan (Penjana) worth RM35 billion recently. Under Penjana bulk of the allocation is crafted towards job security and creation, by providing retention and recruitment incentives, enhancing gig economy, re-skilling and upskilling of employees.

Penjana is expected to have the effect of jump-starting the country’s economy post Covid-19, to empower the people, propel businesses and stimulate the economy. Ultimately, would Penjana prevent an unemployment crisis in Malaysia?

To promote employee retention and reduce layoffs by employers, the previous Wage Subsidy Programme (WSP) introduced under Prihatin will be extended for another three months with a subsidy of RM600 per employee for all eligible employers. The conditions for WSP have been loosened and appear favourable to the employers. The WSP is enhanced to allow employers receiving the subsidy to also implement reduced workweek (with corresponding pay-cut) and reduced pay (with maximum allowable reduced pay of 30 percent).

For tourism sector and businesses which are prohibited from operating during conditional movement control order (MCO), employers are eligible to apply for the enhanced WSP even if the employers have mandated employees to take on unpaid leave, on the condition that employees receiving the subsidy directly.

The government has also introduced recruitment incentives to combat the high unemployment rate.

The government will provide an incentive of RM600 per month, up to six months, for businesses which provide apprenticeship for school leavers and graduates. An incentive of RM800 and RM1,000 per month, up to six months, will be given to businesses which employ unemployed workers of below 40 years old and 40 years old and above respectively. Training allowance of RM4,000 per individual will also be extended to those retrenched but not a contributor under the Employment Insurance System (EIS).

Employees must be equipped with skills critical to remain resilient and relevant in the post-pandemic era. The government is dedicated to enhancing the employability and competitiveness of unemployed workers and youths (particularly school leavers and fresh graduates) through its initiatives under Penjana.

To enhance employability of youth, the government will provide a one-to-one matching fund of RM250 million to co-fund place-and-train in addition to other upskilling programmes with the Human Resources Development Fund. The government will also initiate public-private collaboration on upskilling in different sectors for unemployed workers.

The government will facilitate policies to support the growth of the gig economy and the welfare of gig economy workers. Among others, a matching grant of up to RM50 million will be provided for gig economy platforms which contribute for their gig workers towards Perkeso’s employment injury scheme of up to RM162 and EPF’s i-Saraan contribution of up to RM250 yearly. The government will also provide MDEC with RM25 million for the Global Online Workforce (Glow) programme which will train Malaysians to earn income from serving international clients while working online from home.

Under Penjana, the government encourages the new normal of working-from-home by providing support to both employers and employees. Employers who implement Flexible Work Arrangements (FWA) incentives or undertake enhancement of their existing FWAs will be given further tax deduction.

It is vital for businesses to ensure that employees have sufficient access to technologies to properly embrace the new normal of working remotely. Presently, any gift of a notebook, mobile phone or tablet by employers to employees is treated as perquisites to the employees and is taxable in the hands of the employees. Under Penjana, tax exemption up to RM5,000 is given to individuals who receive a notebook, mobile phone or tablet from their employers under FWA.

The government will also provide special individual income tax relief up to RM2,500 to employees on the purchase of notebook, mobile phone or tablet. Clarity is required from the authorities on whether this special individual income tax relief will be given on top of the current lifestyle relief (a tax relief of up to RM2,500).

To ease the transition to the new normal of working-from-home, the government will also support working parents through the subsidy of child care expenses. There will also be incentives to encourage child care centres to comply with the new normal and to incentivise certification of early education practitioners.

The Department of Statistics forecast Malaysia’s unemployment rate to reach 5.5 percent in 2020. Some analysts had even projected that the unemployment rate may hit above 10 percent, which would have grave social-economic repercussions. Thankfully these forecasts were made before Penjana was announced and the jury is still out on whether it would “Make Malaysia Great Again”.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.