The Malaysian Insight

BUDGET 2021 has no coherent strategy to protect vulnerable groups of people other than increased cash and social welfare handouts, speakers at a webinar on the Perikatan Nasional government’s maiden budget said today.

They suggested that existing social protection schemes, such as the Employment Insurance System (EIS), be expanded to cover those working in informal and gig economy sectors, as those who have been retrenched during the Covid-19 pandemic are taking up jobs in these areas.

Speaking at the webinar by DAP-linked think-tank, Research for Social Advancement (Refsa), former deputy international trade and industry minister Dr Ong Kian Ming said Budget 2021’s allocations for financial assistance to the needy is limited.

“The vulnerable groups used to be a relatively small proportion, but because of the Covid-19 situation, we expect this group to be bigger. 

“We do not see any initiative by the government to increase the registration of the vulnerable groups into e-kasih (national poverty database system).

“Perhaps the government does not want to increase the number of registers, as it would then result in a larger allocation of financial assistance, which is going to drain the government financially in the Social Welfare Department,” Ong said.

In the budget, there is a slight increase in Bantuan Prihatin Rakyat (BPR) aid, which is expected to benefit 8.1 million individuals with an allocation of RM6.5 billion in 2021, compared with 4.3 million beneficiaries with an allocation of RM5 billion this year.

There is also a slight increase in the social welfare payments for the disabled, senior citizens and other vulnerable groups registered with the department. 

This amounts to RM2.2 billion, which is an additional RM700 million from the previous year, and would benefit more than 400,000 recipients.

Meanwhile, Refsa economic adviser Frederik Paulus said the EIS should be extended to cover those self-employed in the gig economy.

Introduced in 2018, EIS was designed to help retrenched workers in the private sector with financial support for up to six months while they look for a new job.

But it does not cover domestic workers, the self-employed, civil servants, and workers in local authorities and statutory bodies.

“I am really concerned about the informal sector or the gig economy. We are in a situation where more people moved into this sector. While the supply increases, the demand of consumers is not necessarily there.

“I worry the income for this group is under a lot of pressure. And it is a large group, almost an additional two million workers. If they are earning significantly less than before, it is an issue,” said Paulus.

Ong suggested the government use the EIS to support the vulnerable. 

“These are people who are suddenly selling cookies, giving online tuition or making homemade masks. Why not allocate assistance for them from the Covid-19 fund, and give them free registration in the EIS for the first six months in 2021?

“It will probably cost a few billion ringgit, but we are already going to spend RM38 billion, so why not spend more with the Covid-19 fund in this particular matter?” 

Ong said when the economy improves, recipients can start to pay back an amount – RM50, for example – into the EIS. It can also be a matching contribution of the government and the individual from the second half of 2021, he suggested.

“Once they are in the EIS, the government can also better capture their income level and the economic conditions they are in to better cater to their challenges.” – November 7, 2020.