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The long-awaited announcement of Budget 2021 finally aired at 4PM on November 6, 2020.

According to our Minister of Finance, Tengku Zafrul Aziz’s tabling of Budget 2021, here’s how the budget will aid the employment sector in Malaysia.

A total of RM322.5 billion has been allocated for 2021, making it RM7.8 billion more than Budget 2020’s allocation, which was RM314.7 billion.

Around RM236.5 billion has been allocated for operational expenditure, and RM69 billion for development.

With the pandemic this year, RM17 billion has been allocated for the COVID-19 fund as well.

EPF Reduction For Employees

There will be an EPF reduction from 11% to 9% for employees starting from January 2021, which is worth a total of RM9.3 billion.

Eligible members can start withdrawing RM500 a month from their EPF Account 1 for 12 months, amounting up to RM6,000 for 12 months.

As for Account 2, eligible members are allowed to withdraw from it to purchase insurance for themselves and their family members.

This is to assist EPF members who have lost their jobs and is expected to ease the financial burden of 600,000 people.

RM24 billion is also allocated for SOCSO’s employment injury scheme which includes delivery riders and contractual civil service workers.

There will also be RM3,000 tax exemptions for contributors to private retirement schemes that’s extended to 2025.

Incentives To Hire Locals, Elderly, OKU, Ex-Prisoners, & Ex-Drug Addicts

Employers will be given a 20% incentive to encourage job opportunities for the OKU group, terminated workers, single mothers and those who have been unemployed long-term.

In sectors that rely heavily on foreign workers such as construction and plantation, an incentive of 60% of the monthly salary will be provided.

40% of it will be channeled directly to employers and 20% will go to the local workers that replace the foreign workers. 

The government will also be allocating RM2 billion to continue the Penjana Kerjaya programme under SOCSO.

This allocation is expected to aid 250,000 job-seeking individuals. 

For those hired under Penjana Kerjaya, the maximum cost of the training programme that can be claimed by employers will be raised from RM4,000 to RM7, 000.

This is so that their employees can undergo a high-skilled programme or a professional certificate programme.

Additionally, if an employer hires an elderly person, an ex-prisoner or an ex-drug addict, they will also be given additional tax reductions.

The tax deduction for employing senior citizens will be extended until 2025.

That being said, RM20 million is allocated for ex-prisoners to gain vocational training.

Boosting Job Creations

A National Employment Council will be established as a coordinating agency to create more jobs and increase the skills and training of workers.  

MyStep, a short-term employment programme will be given an allocation of RM700 million offering 50,000 contract-based jobs.

Those who are interested in applying for this can start doing so from January 2021.

35,000 jobs in the civil services sector will be offered, with a priority given to nurses and medical attendants, whereas 15,000 will be in government-linked companies (GLCs) with a priority given to the technical and financial fields. 

Additionally, an allocation of RM3.7 billion will go to Skim Jaminan Penjanaan Pekerjaan (JanaKerja) to create jobs and improve skills.

Tour Guiding Vacancy For Locals And Orang Asli

There will be employment opportunities at all national parks to spur the ecotourism segment.

These opportunities will be provided to 500 people from the local community and the Orang Asli.

Supporting Artists

If you’re in the arts industry, there will be an RM15 million allocation to the Cultural Economy Development Agency (CENDANA) for an implementation of various arts and cultural programmes.

This will benefit more than 5,000 artists in Malaysia as well as those who work behind the scene. 

Grants, Subsidies and Incentives

The government will also be opening a furniture sector to create jobs in Pagoh.

There will be a RM1,000 grant for traders, taxi drivers, e-hailing drivers and tour guides in Sabah.

Fishermen allowance will also be increased from RM250 to RM300 a month with a RM151 million allocation that’s expected to benefit 50,000 fishermen.

There will also be a RM1.7 billion allocation for subsidies and incentives for farmers and fishermen.

One-off Payments

To honour the sacrifices of frontline workers in handling the COVID-19 pandemic, the government will be giving a one-off payment of RM500 to 100,000 of them.

Additionally, there will be a RM500 one-off payment to about 70,000 religious teachers and leaders (guru takmir) as well.

For Employees In Tourism And Retail

For tourism and retail sectors, there will be a target wage subsidy program that will last for 3 months.

An allocation of RM1.5 billion is expected to benefit 70,000 employers and 900,000 workers in these industries.

RM600 per month will be given to those earning RM4,000 and below.

There will also be an increase in the limit from 200 to 500 workers especially for big companies in the tourism industry.

Reskilling And Upskilling 

A budget of RM1 billion will be allocated for reskilling and upskilling programmes, which is expected to benefit 200,000 trainees.

The partition is as such:

  • RM150 million for KPT-PACE – RM3,000 vouchers for 50,000 graduates who take a professional certificate.
  • RM100 million for HRDF – training programmes with private sector employers.
  • RM100 million for IRDA and SEDIA – benefits Sabahan and Johoreans workforce lost due to borders closing.
  • RM30 million for PERHEBAT – benefits 12,000 veteran soldiers.
  • You can read about our coverage on M’sian Budget 2020 last year here.

Featured Image Credit: Tengku Zafrul Aziz, Minister of Finance

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