Prime Minister Tan Sri Muhyiddin Yassin should initiate a unity Budget 2021 consultation process with opposition parties, that incorporate financial policies to ensure that this Budget fulfils the aspirations of the Yang di Pertuan Agong to overcome COVID-19 latest spike in infections and help ordinary Malaysians economically. No one would dispute that more funds should be allocated for our front-liners battling this 3rd wave of COVID-19 infections.
However financial assistance to help our economic sectors can help to craft a unity budget that bring all Malaysians together. Such a unity budget must clearly and unequivocally provide a COVID-19 economic shield costing RM31.4 billion to save jobs and livelihood as well as businesses facing closure. A GDP contraction of 17.1% in the 2nd quarter this year and the Human Resources Minister stating that 1 million Malaysians are expected to be unemployed by September 2020 only underlines the economic crisis affecting ordinary working Malaysians.
The Unity 2021 Budget economic shield will cost RM31.4 billion comprising a 3-prong measures of RM1,000 monthly welfare aid including to those unemployed, automatic extension of the bank loan moratorium by another 6 months as well as work hiring incentives for employers and employees. This RM31.4 billion is not significant compared to the RM305 billion package under KitaPrihatin, that does not appear to have the desired effect to jump-start the economy.
First under the unity Budget economic shield, there should be immediate implementation of the increase in monthly welfare aid from RM200-300 to RM1,000 promised by the Prime Minister on 30 August 2020 in Sandakan, that will cost RM12 billion. This will provide an immediate safety net for unemployed workers.
Two, an extension of the moratorium of bank loan repayments by another 6 months when it expires on 30 September, costing RM6.4 billion that will help 8 million Malaysian individuals and companies. In contrast the targeted bank loan moratorium extension and bank assistance after 30 September, have assisted only 1.4 million borrowers. Many have complained that this does not benefit them but only financial institutions by merely extending the loan repayment period, thereby requiring even higher interest payments.
Three, work hiring incentives over a period of 2 years, under Malaysia@Work of RM500 a month to employees and RM300 per month to employers to encourage them to hire local workers as proposed by PH in the 2020 Budget. Expanding this scheme to cover 600,000 Malaysian workers and their employers would cost RM13 billion. This would also help the more than 500,000 youths who are unemployed, making up a large proportion of the 4.9% unemployment rate.
To save and pull the economy out of our current economic recession, the government’s financial focus should shift from controlling our debt levels and fiscal deficit, to borrowing more money. The obsession with controlling our deficit to protect our sovereign credit ratings must give way to borrowing more money to save Malaysian jobs, businesses and livelihood.