‘STILL EARLY TO TALK ABOUT 2021 BUDGET’

Finance Ministry will start engaging the business community and rakyat, says minister

THE government is focusing on tackling economic slowdown before formulating the 2021 Budget. Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the ministry would be engaging with the rakyat and business community in outlining the budget.

“It’s still early to talk about the 2021 Budget because we will be announcing it only in November. What is important is that we must start engaging the businesses and people now.

“We have gone through the bottom, we have seen people are going to work and the economy is picking up. The 2021 budget will, hopefully, reflect that and build on that momentum,” he said after visiting the Social Security Organisation (Socso) headquarters here yesterday. Present was Socso chief executive officer Datuk Seri Dr Mohammed Azman Aziz Mohammed.

Last month, the International Monetary Fund (IMF) revised Malaysia’s 2020 economic growth forecast to a 3.8 per cent year-on-year contraction from its estimated 1.7 per cent contraction as the Covid-19 pandemic has had a more negative impact on global activity in the first half of this year than anticipated.

The World Bank said the nation’s gross domestic product (GDP) was projected to contract by 3.1 per cent this year due to a sharp slowdown in economic activity caused by the pandemic and measures to contain its spread.

“Hopefully, the third-quarter and fourth-quarter economic growth will show improvements.

“The GDP for the second quarter has not yet been announced but we know that (during) most of the period, we were under the Movement Control Order, so the economy will be posting a negative growth,” said Tengku Zafrul.

He said the worst was over but Malaysia must be cautious and responsible, and not become complacent about the Covid-19 pandemic.

“We assume that there is no more and there will not be a second wave, so we should be on track for that 2021 forecast.

“If you look at the average consensus by analysts, it is around five per cent (economic growth) by next year.”

On a separate matter, Tengku Zafrul said the government hoped more workers in the gig economy would register with Socso under the Economic Recovery Plan (Penjana) so that their welfare could be safeguarded.

He said the government had allocated RM50 million in the form of matching grants for the gig economy platform for workers’ contribution under the Socso employment injury scheme.

Tengku Zafrul said from January till now, only seven per cent or 28,425 workers in the gig economy had registered with Socso. There are about 400,000 gig workers.

To spur the initiatives for gig workers under Penjana, several engagement sessions were carried out with the agriculture, hawkers, transport, goods, and food sectors, as well as 38 supervisory platforms of the gig services.

“More than 188,000 potential freelancers have been identified,” said Tengku Zafrul.

Up to June 26, he said, RM7.07 billion was approved under the wage subsidy programme for 307,518 employers, protecting more than 2.46 million workers.

He added that some applications for the wage subsidy scheme were not approved due to factors such as technicality.

“Some 97 per cent of the issues have been settled.

“The main problem is (putting) incorrect business registration number and this caused them to receive the assistance late compared with those who gave the correct business registration number.

“The other thing is that companies gave the incorrect bank account number, while some were not active.”

Meanwhile, Azman said Socso had set up a working committee to resolve the issues.

“It will take some time for us to settle (the issues) because there are about a few thousand (applications) or so, but we are in the process of resolving them,” he added.