REFSA notes that Budget 2021 was proposed with the aim of ensuring rakyat’s prosperity, business continuity and economic resilience. While we laud these admirable aims, the measures announced today may prove to be less impactful than what is needed in terms of job creation and ensuring future growth.
Economic Adviser Frederik Paulus spoke to Astro Awani’s “Consider This” programme on the upcoming Budget 2021 and the significance of the budget toward’s Malaysia’s resilience and recovery amidst the COVID-19 pandemic.
For decades, fiscal discipline and balanced budgets were the guiding light for finance ministers across the globe. That the institutions who were staunch defenders of this approach are now calling to abandon it is testament to the extent of the economic disruption we are witnessing. The upcoming budget is the best opportunity to start putting this new paradigm into practice.
Despite the public perception that Malaysia has a bloated civil service, there is a dire need for more healthcare workers to combat the coronavirus pandemic. Our Visiting Researcher, Farhana Roslan speaks on the government’s role in creating sustainable jobs of demand in the public sector as the nation rebuilds amidst the pandemic. For one, the health sector, along with education, is in need of more staff in the COVID-19 fight.
Education, healthcare and social welfare are key areas the government must address in Budget 2021, as these can contribute to both short- and long-term prosperity. At present, social welfare measures need to be implemented to combat rising unemployment and underemployment to mitigate effects on the economy, one being a change in consumption pattern.
Underemployment is rarely addressed compared to unemployment. Due to the MCO, industries have had reduced operating hours, which typically resulted in lower salaries and wages received, particularly in semi-skilled and low-skilled jobs. If left unaddressed, there is a risk Malaysia will be faced with higher levels of underemployment and unemployment compared to prior to the COVID-19 pandemic.
Belanjawan 2021 sepatutnya mempunyai defisit belanjawan lebih tinggi untuk pemulihan ekonomi lebih pantas. Kadar meminjam pada waktu ini dijangka akan lebih berdaya saing dan berada pada tahap terendah. Ianya tidak akan memberi keburukan kerana banyak negara dijangka melakukan perkara sama bagi merangsang kembali ekonomi yang terjejas kerana pandemik COVID-19.