As Malaysia navigates its way, steadily reopening the economy with the easing of the Covid-19 threat and the Movement Control Order, the govt is taking measures to address concerns over job security, as well as create opportunities for the unemployed. Human Resources Minister Datuk Seri M. Saravanan explains the benefits of the Penjana short-term Economic Recovery Plan
Question: The Statistics Department has said that more than 860,000 Malaysians would be unemployed by year end. How many additional jobs does Penjana expect to save?
Answer: The Wage Subsidy Programme (WSP) alone will save 2.7 million jobs for locals. This is especially among small and medium enterprises and sectors that were prohibited from operating during the Conditional Movement Control Order (CMCO) such as tourism-related ones.
The WSP, which is under the Social Security Organisation (Socso), seeks to help businesses retain their workers and alleviate their cashflow. Up to June 8, the Employment Retention Programme (ERP) applications involved 37,435 employers and 335,933 employees. The Wage Subsidy applications involved 309,410 employers and 2,509,916 employees.
We are also looking at opportunities such as creating more platforms for the gig economy. We have seen the exponential growth of this area in the last three months. The gig economy will be 'the economy' for the next year or two or at least until a vaccine for Covid-19 is found.
Q: Apart from retaining workers, how is the ministry helping the unemployed, especially those who have lost their jobs in the past three months due to the pandemic?
A: The prime minister has introduced many incentives, like special training programmes with the Human Resource Development Fund (HRDF), where we try to reskill, upskill or cross-skill those who lost their jobs and allow them to go into different sectors.
We are also identifying new roles and job opportunities through our job-seeking portal, JobsMalaysia, as well as looking at reducing the recruitment of foreign workers especially for jobs on the front lines.
The ministry is also looking at creating jobs and encouraging placement through the Hiring Incentive Programme managed by Socso. This programme aims to provide 300,000 jobs and employers are given direct cash incentives if they hire Malaysian workers including apprentices.
This incentive is for those recruiting people below and above 40 years of age as well as those with special needs.
Our ministry is also currently upgrading the National Employment Services Job Portal or MYFutureJobs (www.myfuturejobs.gov.my), which efficiently matches job vacancies to seekers through the use of artificial intelligence.
The portal is expected to benefit over 50,000 unemployed people in the country.
Q: Are there initiatives in Penjana that would help school-leavers and fresh graduates who may be worried about securing a job during such times?
A: The government, through Penjana, emphasises training in terms of reskilling and upskilling of Malaysians to enhance the employability of the unemployed, particularly school-leavers and fresh graduates. This is being implemented through collaborations with various ministries and agencies, including HRDF.
The programmes are expected to benefit some 200,000 youths and unemployed workers.
Against the backdrop of the economic recovery, the skilled Malaysian workers produced from these initiatives coupled with other programmes that assist and strengthen businesses in the country as outlined under Penjana, are also expected to generate more jobs down the road.
The initiatives to empower Malaysians in the gig economy, such as the Global Online Workforce (Glow) programme and the social security coverage for gig workers under Socso's Self-Employment Social Security Scheme, are also among other efforts to create jobs in the country.
Currently, we are trying to educate people on this as they are still confused between 'self-employed' and the gig economy.
If two people sell nasi lemak in front of their homes, but one of them uploads their business to an online platform, that trader automatically becomes a part of the gig economy and is entitled to coverage such as the employment injury scheme.
Through Penjana, the government has also provided a matching grant of up to RM50 million for gig economy platforms that contribute to Socso's employment injury scheme.
Q: How can the government ensure that companies which have retrenched workers during this period do not qualify for perks such as WSP and the employment recruitment incentive of RM1.5 billion? Will there be an audit?
A: The ministry, through Socso, has carefully designed the process of each programme to ensure that the same individuals listed in the Wage Subsidy or ERP are not entitled for the Hiring Incentives.
Socso has put in place control measures including the validation of statutory contributions, eligibility criterion of unemployment for certain number of months, as well as a requirement to advertise vacancies.
There will also be audit trails to reduce moral hazards. For example, Socso leverages its Employer Contributory and Retrenchment Benefit systems to verify and cross-check claims before making payment to the recruiters. These systems are integrated to the hiring incentive programme.
Q: Could you explain how the ministry's portion of the RM2 billion fund on upskilling, placement and training will be handled and disbursed?
A: We will ensure there is no duplication or overlap with the funds allocated to the ministry.
Prior to implementation, HRDF and Socso had agreed on set goals and guidelines to ensure the allocation is spent appropriately.
One dimension of this discussion is target groups, where for instance, all apprentices will leverage the funds by HRDF, while training for unemployed individuals under the Hiring Programme will be managed by Socso in collaboration with HRDF.
In fact, there will also be a special committee to monitor courses approved that are suitable for these various initiatives as I would like to emphasise the outcome of training provided to needy persons.
Q: Some quarters have raised a concern that Penjana is using Socso's funds. What are Socso's reserves at this point of time? Can the government ensure that Socso's bottom line will not be affected?
A: Up to 2017, Socso's reserves stood at RM25.8 billion, while its net assets are worth RM27.1 billion.
Socso's funds will not be affected as the initiatives implemented under Penjana will be from the government allocation. If Socso is able to help the unemployed to obtain jobs as well as generate jobs in the economy, there will be more workers in the country's economy which also means more contributors to Socso. This in turn will increase Socso funds that could be utilised to provide better social security coverage for the workers and their families.
Q: Will the ministry be making public the list of beneficiaries for programmes and allocations under Penjana and Prihatin which is handled by it?
A: The list of beneficiaries will be made public for all Prihatin and Penjana spending that involves the ministry. This is not just for WSP but also for the Employee Retention Programme, the levy reduction under HRDF and other programmes under us.
Q: We have talked about reducing the dependency on foreign workers, especially in 3D (dirty, dangerous and difficult) jobs. Has there been any progress in that?
A: As we have just been in office for about three months, it is still too early to decide on anything related to 3D work and our local labourers.
But we're looking at other sectors and frontline work. For example, Family Mart, a convenience store from Japan has a majority of locals working for them, whereas places like 7-11 or KK Mart mostly hire foreigners.
I recently had a discussion with KK Mart. It has agreed to provide more opportunities to local workers and, effective immediately, KK Mart will offer 1,000 vacancies to locals. It's the same at petrol pumps. I've asked petrol pump operators nationwide to hire locals to work as cashier or counter attendants.
These are just some of the many post-Covid-19 initiatives that we are getting under way.
In terms of 3D sectors, some sectors have agreed to reduce their dependency on foreign labour and provide more job opportunities to locals. These include restaurants where the positions of cashiers and waiters should be filled by locals.
Q: How many of these documented foreign workers are we expected to retain?
A: On record, we have about 2.1 million documented foreign workers in the country. We expect nothing less than 50 per cent of them to be retained.
Q: Do you have figures to show the extent of Covid-19 disruption to the job market so far?
A: Overcoming the Covid-19 crisis will take a long time, even though ours is among the fastest to record single-digit new infections. It is too early to say as the market just opened. We would have detailed figures by year end as well as reports on the number of workers that remain in each sector. This includes the demand and supply or the number of jobs required in each sector and industry. And it would cover jobs held by foreign workers and demand or vacancies targeted at them.
Q: What are the key lessons from Covid-19?
A: My policy is to tell Malaysians to be hardworking, have savings, and a safety net. This should be the new norm for the post-Covid-19 generation.
We must ensure that we have a job. If we have a day job, try to look for extra income because the reality is the economy will be slow.
From my observation in the past three months, a majority of those in the B40 (Bottom 40) and M40 (Middle 40) income brackets have no safety net or savings.
When we were out providing food packages to people, I was surprised to see that those in the M40, too, needed assistance. I saw with my own eyes that many don't have money to buy food. Taxi drivers who rely on daily wages, for instance, had no money due to disruptions related to MCO. Basically, they had nothing to eat.
So we must get two things going. Create a safety net and encourage Malaysians to save.
We need to change the general attitude and inculcate a culture where people put aside a sum when they get their pay instead of spending first and saving the remainder.
It's hard to say how long the savings should last as there are people who do not earn very much plus there is the added factor of the current high cost of living. But a reasonable sum will do. The culture of saving should be there, it was not important pre-Covid-19, but it is now.
The novel coronavirus has taught us to alter our lifestyles to a new spending norm which is focused on necessities. It was possible to live in the past three months without spending unnecessarily.
Q: Wouldn't this put a damper on our economy which is consumer driven?
A: For now, we should just follow this until our economy recovers. Even the government has reduced spending.
Q: What does this lack of savings and safety net say about the wages in the country?
A: I understand that the cost of living is continuing to increase. And yes, I also know that although on paper your salary is RM4,000, in reality your take- home pay after deducting all your bills and loans is much lower.
A person who earns RM4,000 is eligible for financial aid (from the government), while another person who earns RM4,100 isn't.
We are looking at various wage models as we have realised that things shouldn't be decided merely on payslips.
Q: Some quarters have also argued that the Penjana package is employer friendly when it should focus solely on workers. Your take on this?
A: We are taking a lot of initiatives to ensure industries survive now. Our purpose is to help them survive. Otherwise, millions will be laid off and we would have to shoulder that burden.
Sometimes the unions are angry with us for also looking after the employers' welfare. One of the classic examples was when I announced that Sosco would contribute to Covid-19 tests for employees.
We did this because if employers have to bear this and then fold due to all the compounding costs, the workers' would become victims. What happens to the employees' future then?
Q: Will the government look into expanding the WSP for the retention of those earning above RM4,000, and to companies which employ more than 200 workers?
A: For the expansion of the WSP to employers retaining those earning RM4,000 or more, that is in the hands of the finance minister.
We also will not extend it to companies that can hire 200 or more workers as we don't want people to take advantage of this as some of the industries are strong and can sustain themselves. And there can be no appeals on this as the government has made a policy decision here.
Countries like Singapore and Canada may be able to offer their big companies these incentives but their taxation system is also different than ours.
Q: Is the ministry going to ramp up its enforcement to ensure that employers comply with the laws and conditions attached to aid packages?
A: I have instructed the Labour Department to step up. There will be greater enforcement not only on manpower, but I am also asking the National Institute of Occupational Safety and Health to look at the machinery to reduce incidents (workplace accidents).
Q: Will the ministry look into covering injuries for those who work from home?
A: It is clear as long as you are working at home, your workplace is considered your home and the time of work covers your work hours.
We are also looking at studying the Employment Insurance System Act of 2017 to cater for changes and widen the scope in light of current challenges.