Media Statement by Dr. Ong Kian Ming, Member of Parliament for Bangi, on the 9th of November 2020

Budget 2021 does not prepare us to face the challenges of a COVID economy in 2021

“I know that you’ve had a tough 2020. But don’t worry, 2021 will be better. We think you business will improve by 6.5% to 7.5%. We’ll give you some help but less than what we gave in 2020. Once the vaccine comes, things will go back to normal. The worst is over. Here’s a small bandage for your wound.”

This is basically the gist of the recently announced 2021 budget. A slightly expansionary budget that is out of touch with the economic reality that was 2020 and the grim uncertainty of 2021. Still very much a peacetime budget when we are still very much at war with the ongoing effects of the COVID economy. The offering of a small bandage when most businesses are bleeding from multiple wounds.

But hold on… didn’t the government just announce the largest expenditure in Malaysian history for Budget 2021? Isn’t the government increasing the budget deficit significantly so that we can pump more money into the economy?

Yes, the projected budget deficit will increase from 3.4% to 6.0% of GDP in 2020 because of COVID related spending such as the Bantuan Prihatin Rakyat payments and also the Wage Subsidy Program (WSP). But rather than spending MORE in 2021 to face COVID related challenges, the budget deficit is projected to DECREASE to 5.4% in 2021. At the same time, the allocation to the special COVID fund is projected to DECREASE from RM38b in 2020 to RM17b in 2021. Rather than having an over optimistic projection of economic growth in 2021, we should be preparing for the worst by planning to spend MORE in COVID related expenses in 2021 in order to save businesses and help vulnerable groups.

But wait, wouldn’t the record setting RM69 billion in development expenditure be a helpful fiscal injection for the economy? It depends. If the development expenditure can be rolled out relatively quickly, is transparent and has high multiplier effects, its economic effects will be enjoyed and felt by a larger proportion of the population. For example, the RM500m allocated in 2021 for the rollout of the National Fiberisation Connectivity Plan (NFCP) is very much needed especially for the semi-rural and rural areas. The additional development expenditure to repair dilapidated schools especially in Sabah and Sarawak is also much needed not just for the school children but also for the small contractors which are given these projects. This is assuming that the contracts are tendered out transparency and at reasonable costing.

But the bulk of the increase in development expenditure from the originally projected RM56b in the 2020 budget to the RM69b in the 2021 budget may not have the desired economic multiplier effects. For example, the allocation for “special projects” under the Prime Minister’s Department has increased from RM100m in 2020 to RM1 billion in 2021. In the past, we have highlighted that such large allocations without stating the nature of such projects can be subject to great abuse and lacking in transparency. At the same time, an additional RM5.5 billion has been allocated to the Ministry of Finance’s Development Expenditure (from RM8.1 billion in 2020 to RM13.6 billion in 2021) under the category of “various capital injections”. Without knowing the details of these capital injections, it is hard to gauge how much of the real economy this additional expenditure will benefit. Finally, an additional RM1.5b worth of development expenditure was allocated to the Ministry of Transportation for increasing the capacity of KTMB. If this increase in allocation is largely for the much delayed Klang Valley Double Tracking (KVDT) project, then the multiplier effect is likely to be small because of the limited number of contractors involved.

Why is it important for the government to plan to spend more and have a bigger budget deficit in 2021 compared to 2020? The recent reinstatement of the CMCO, which began in Sabah and Selangor in early October 2020, has now been expanded to all states in Peninsular Malaysia (with the exception of Perlis, Kelantan and Pahang) until the 6th of December. The recent spike in COVID cases shows that this virus does not respect calenders or timelines. There is no guarantee that the CMCO will not be extended into early 2021 or that it may make a sudden appearance again in 2021 even if the cases come under control by the end of 2020. We are seeing similar spikes occur in Europe and also in the United States. These new semi-lockdowns and lockdowns in Malaysia and other parts of the world will definitely have a negative economic impact and will likely slow economic recovery in 2021 as long as the COVID threat remains.

We also should not be too optimistic about the prospects of mass vaccination which may only be available in the 2nd half of 2021 at the earliest.

Many businesses have used up their cash reserves during the initial MCO period in the first half of 2020. The recent CMCO have hit them hard even though conditions under the CMCO are not as severe as under the MCO. The number of economically vulnerable have also increased as evidenced by the increase in self unemployment over the past few months even as the number of unemployed have dropped slightly. What this means is that more SMEs and vulnerable families are expected to require assistance in 2021 compared to 2020.

Wait a minute… What if the government is adopting a wait and see attitude before deciding to spend more in 2021? Perhaps the government is willing to spend more but only if the signs of economic recovery are weak in 2021.

This kind of ‘business as usual’ thinking is one of the main shortcomings of this budget. If we wait until things become worse before deciding to spend more, it will be ‘too little too late’. We can look to Sabah as an example. I am sure that the economic situation in Sabah is much more serious compared to the Klang Valley given the number of COVID cases and also the number of people working in the service sector and in the informal economy. However, under Budget 2021, the only additional assistance given to Sabah is the Special Prihatin Grant (Grant Khas Prihatin) of RM1000 to 20,000 traders and hawkers and taxi, ehailing drivers, rental car and tour drivers in Sabah. This kind of one-off assistance is simply insufficient especially since the number of COVID cases in Sabah shows no sign of being under control anytime soon. If the same kind of ‘business as usual’ attitude is adopted for 2021, without more government assistance and direction, we can expect more suffering among businesses and vulnerable families.

What we need in Budget 2021 is a ‘war time’ approach in facing the challenges of the COVID economy.  This means that we have to budget for a significant increase in government spending and be ready to accept a budget deficit that is higher than the currently projected 5.4% of GDP. The allocation to the COVID fund needs to be increased significantly from the currently budgeted RM17b for 2021. The increase in this fund can be used for the following purposes:

  1. Increase the Wage Subsidy Program (WSP) to at least RM1000 per Malaysian worker (from the current RM600 per worker) for all businesses which are in the CMCO areas which cannot operate as per normal (especially in the retail, service and tourism sectors)
  2. Provide an allocation to heavily subsidized testing on a regular basis for workers (once a month to start) as a pre-emptive measure to control the COVID virus.
  3. Provide a 6 month EIS contribution for free with a 50% matching contribution for another 6 months to ALL workers who have not signed up for the EIS in order to capture workers in the informal sectors and to provide the necessary assistance to them if they cannot work as a result of a CMCO
  4. Provide cash grants of RM1000 per month per Malaysian family in areas under EMCO. This incentive will also limit the number of people who will ‘escape’ from the EMCO areas before the lockdown begins.

Without such bold thinking on measures to help businesses and vulnerable families, the current Budget 2021 is underwhelming and makes us unprepared to face the challenges of a COVID economy in 2021.

Kenyataan Media Dr Ong Kian Ming, Ahli Parlimen Bangi dan Penolong Pengarah Pendidikan Politik Parti Tindakan Demokratik (DAP) pada 21 Oktober 2020

Kekeliruan dan Percangahhan di Antara MITI and Majlis Keselamatan Negara (MKN)

Pada 20 Oktober 2020, Menteri Kanan merangkap Menteri Pertahanan, Ismail Sabri, mengumumkan bahawa semua pekerja barisan pengurusan dan penyeliaan di sektor swasta dan awam akan Bekerja Dari Rumah (BDR) mulai 22 Oktober 2020. Sejak pengumuman ini, telah terjadi kekeliruan antara Kementerian Perdagangan Antarabangsa dan Industri (MITI) dan Majlis Keselamatan Nasional (MKN) mengenai dasar dan SOP untuk wilayah di bawah Perintah Kawalan Pergerakan Bersyarat (PKPB) iaitu di Lembah Klang dan Sabah. Pengumuman oleh kedua-dua Menteri, Azmin Ali dan Ismail Sabri, telah menimbulkan lebih banyak persoalan daripada memberi jawapan.

  1. Mana sektor dan industri yang perlu Bekerja Dari Rumah (BDR)?

Pemahaman awalnya adalah bahawa arahan ini akan melibatkan SEMUA sektor di sektor swasta. Ini berdasarkan kenyataan media yang dikeluarkan oleh Menteri MITI, Azmin Ali, pada 21 Oktober yang meruju kepada 3.1 juta pekerja di Lembah Klang dan Sabah yang bekerja di sektor pembuatan, perkhidmatan dan pembinaan. [1] 

Tetapi dalam sidang akhbarnya pada jam 6 petang 21 Oktober, Ismail Sabri menyatakan bahawa hanya “industri dan perkhidmatan awam” yang akan terlibat. Dia juga dilaporkan mengatakan bahawa sektor runcit tidak termasuk dalam “industri” dan ini bertentangan dengan kenyataan MITI yang dikeluarkan pada hari yang sama. [2]

2) Siapa sebenarnya barisan pengurusan dan penyeliaan? Apakah definisi MITI?

Banyak syarikat masih belum pasti siapa sebenarnya yang terdiri daripada barisan pengurusan dan penyelia. Ini sangat relevan di sektor perkhidmatan profesional di mana hampir semua orang di atas tahap kemasukan mempunyai sekurang-kurangnya beberapa tanggungjawab penyeliaan. MITI mungkin lebih biasa dengan sektor pembuatan di mana sebahagian besar kakitangan bekerja di kilang dan di mana nisbah penyelia dengan pekerja “blue-collar” sangat tinggi. Model yang sama tidak boleh digunakan dalam sektor perkhidmatan perakaunan, perundangan, IT dan kewangan kerana bilangan pekerja “white collar” adalah lebih tinggi.

3) Bagi 10% barisan pengurusan dan penyeliaan yang masuk pejabat untuk bekerja, apakah susunan kerja terperinci? (misalnya bekerja dalam shift, bekerja selama 4 jam tetapi tidak semestinya dari 10 pagi hingga 2 petang, dll.)

MITI mungkin mendapat tekanan dari dewan perdagangan dan kumpulan industry. Tekanan ini mungkin menyebabkan pihak MITI membenarkan 10% barisan pengurusan dan penyeliaan termasuk mereka yang mempunyai tanggungjawab dalam bidang perakaunan, kewangan, pentadbiran, perundangan, perancangan dan ICT untuk datang ke pejabat dari jam 10 pagi hingga 2 petang selama 3 hari dalam seminggu. Tidak dinyatakan sama ada syarikat dapat menyesuaikan waktu kerja ini misalyna dari jam 9 pagi hingga 1 tengah hari atau dari 12 tengah hari hingga 4 petang. Tidak jelas juga jika syarikat boleh menggilir kakitangan yang boleh masuk ke pejabat selama 4 jam sehari, 3 hari seminggu. Dalam wawancara dengan Astro Awani, Timbalan Ketua Setiausaha MITI, Norazman Ayob, menjelaskan bahawa syarikat-syarikat boleh memilih bagaimana mereka mahu menetapkan barisan pengurusan mereka untuk masuk ke pejabat secara bergilir tetapi ini tidak dimasukkan ke dalam kenyataan media MITI. [3]

Di samping itu, pengaturan kerja untuk staf penyeliaan ini tidak mengambil kira sektor pembuatan yang perlu mengoperasikan kilang mereka secara 24/7. Mengehadkan waktu bekerja dari pukul 10 pagi hingga 2 petang tidak sesuai untuk barisan penyeliaan yang harus menjaga “shift workers” pada waktu yang berbeza di kilang pembuatan.

4) Bagaimana dengan syarikat-syarikat yang tidak dapat berfungsi dengan baik jikalau hanya 10% barisan pengurusan dan penyeliaan bekerja di pejabat untuk hanya 4 jam selama 3 hari seminggu?

Arahan MITI hanya membenarkan 10% barisan pengurusan dan penyeliaan masuk ke pejabat untuk bekerja boleh menjejaskan operasi syarikat di sektor tertentu. Ini sangat relevan untuk sektor-sektor di mana barisan pengurusan dan penyelia perlu berinteraksi secara langsung (“face to face”) dengan pelanggan mereka misalnya dalam perkhidmatan kewangan dan penjualan.

Adakah MITI akan membuat pengecualian untuk sektor-sektor yang dapat menunjukkan bahawa mereka tidak dapat beroperasi dengan baik dengan hanya 10% barisan pengurusan dan penyeliaan yang bekerja di pejabat?

5) Bagaimana dengan perniagaan kecil yang pekerjanya kurang dari 10 orang?

Terdapat juga soalan yang ditujukan di media sosial MITI yang membangkitkan soalan mengenai syarikat yang mempunyai kurang daripada 10 kakitangan. Adakah ini bermaksud bahawa bagi syarikat-syarikat ini, tidak ada kakitangan pengurusan atau penyelia yang dapat bekerja di pejabat?

6) Adakah ujian swab bagi mereka yang masih harus pergi bekerja wajib? Atau hanya untuk mereka yang berada di zon merah? Atau hanya untuk kategori pekerja dalam industri tertentu?

Salah satu kekeliruan utama adalah sama ada kakitangan yang tidak dapat bekerja dari rumah perlu menjalani ujian swab sebelum datang ke pejabat untuk bekerja. Isu ini tidak dijawab dalam kenyataan media MITI. Kemudiannya ini diperjelaskan oleh Ismail Sabri dalam sidang medianya. Ujian swab COVID 19 hanya diwajibkan untuk pekerja di sektor pembinaan dan keselamatan dan pekerja yang menunjukkan gejala. Bagi pekerja di zon merah yang harus pergi ke pejabat, tidak wajib tetapi mereka sangat digalakkan untuk menjalani ujian swab. (Lihat Rajah 1 di bawah)

Oleh kerana penjelasan ini hanya dikeluarkan pada petang semalam, banyak syarikat telah membuat pengaturan agar kakitangan mereka diuji. Ini adalah kos tambahan bagi syarikat yang sudah mengalami tekanan kewangan kerana pandemi COVID.

Sebagai tambahan, bagi mereka yang ingin menuntut perbelanjaan ujian swab dari PERKESO (maksimum RM150 setiap ujian), mereka hanya boleh pergi ke SATU klinik panel di seluruh negara iaitu rangkaian klinik kesihatan BP. [4]Bilangan klinik panel harus ditingkatkan sehingga kesulitan dapat diminimumkan dan lebih banyak klinik dapat menawarkan perkhidmatan ujian COVID mereka.

7) Kawasan mana yang diklasifikasi sebagai zon merah?

Juga tidak jelas daerah / kawasan mana yang diklasifikasikan sebagai zon merah oleh Majlis Keselamatan Nasional (MKN) untuk tujuan ujian swab COVID. Sebagai contoh, Rajah 2 di bawah menunjukkan bahawa terdapat 5 daerah (“daerah) yang dianggap sebagai zon merah di Selangor – Petaling, Hulu Langat, Gombak, Klang, Sepang dan Kuala Langat.

Tetapi menurut Rajah 3 di bawah ini, tidak semua mukim diklasifikasikan sebagai zona merah di dalam daerah zon merah. Contohnya, mukim Kapar di daerah Klang adalah zon kuning dan hanya mukim Kajang di daerah Hulu Langat yang diklasifikasikan sebagai zon merah. Adakah ini bermaksud bahawa mereka yang berada di mukim Cheras di Hulu Langat (zon kuning) tidak digalakkan untuk menjalani ujian swab dan hanya mereka yang bekerja di mukim Kajang yang harus melakukan ujian swab?

Sebagai tambahan, adakah syarikat mengetahui batas sebenar daerah / mukim ini? Sebagai Ahli Parlimen Bangi, saya tidak 100% pasti di mana batas mukim Cheras di Hulu Langat bermula dan berakhir dan di mana sempadan mukim Kajang bermula dan berakhir. Saya cukup yakin bahawa banyak syarikat juga akan keliru tentang mukim mereka.

8) Apakah hukuman yang akan dikenaka untuk ketidakpatuhan?

MITI telah mengumumkan bahawa mereka akan melakukan pemeriksaan (“spot check”) ke atas syarikat untuk memastikan bahawa mereka mematuhi syarat yang diumumkan di bawah PKPB. Tetapi adakah adil untuk menghukum syarikat yang tidak dapat mematuhi syarat ini memandangkan kekurangan maklumat daripada pihak MITI dan juga kenyataan yang bercanggah antara MITI dan MKN? Saya berharap bahawa syarikat tidak akan dihukum kerana arahan yang tidak jelas daripada pihak MITI dan MKN.

9) Di manakah FAQ terperinci yang sepatutnya dikeluarkan oleh MITI?

Kenyataan MITI pada 21 Oktober menimbulkan lebih banyak persoalan daripada jawapan. Ini adalah sebab utama mengapa MITI seharusnya mengeluarkan Soalan Lazim (FAQ) terperinci untuk menjawab soalan khusus dari syarikat-syarikat yang menimbulkan soalan. Sebilangan jawapan nampaknya diberikan oleh Timbalan Ketua Setiausaha (TKSU) MITI, Norazman Ayob, semasa sesi dialog bersama industri pada 21 Oktober. Tetapi oleh kerana jawapan ini tidak disahkan oleh MITI, syarikat tidak dapat menganggap bahawa ini adalah pendirian rasmi kerajaan. MITI masih perlu berusaha untuk  menjawab soalan-soalan ini dengan mengeluarkan FAQ yang terperinci.

Kekeliruan dan kekurangnya dari segi penjelasan daripada pihak MITI dan MKN bermaksud bahawa majikan dan perniagaan akan beroperasi di bawah suasana kekeliruan apabila arahan PKPB ini bermula pada 22 Oktober 2020.





Media Statement by Dr. Ong Kian Ming, Member of Parliament for Bangi and Assistant Political Education Director for the Democratic Action Party (DAP) on the 21st of October 2020

Confusion and contradictions at MITI and the National Security Council (NSC)

On the 20th of October, 2020, the Senior Minister and Minister of Defence, Ismail Sabri, announced that all workers in management and supervisory positions in the private and public sectors would Work From Home (WFH) starting on the 22nd of October, 2020. Since this announcement, there has been utter confusion between the Ministry of International Trade and Industry (MITI) and the National Security Council (NSC) on the policies and Standard Operating Procedures (SOPs) for the areas under the Conditional Movement Control Order (CMCO) namely the Klang Valley and Sabah. The announcements by the two Ministers, Azmin Ali and Ismail Sabri, have raised more questions than answers.

1) Which are sectors and industries which are affected by this Work From Home (WFH) order?

The initial understanding was that this directive would affect ALL sectors in the private sector. This is based on the press statement issued by MITI Minister, Azmin Ali, on the 21st of October which mentions the 3.1 million workers in the Klang Valley and Sabah that are in the manufacturing, services and construction sectors.1 But in his press conference at 6pm on the 21st of October, Ismail Sabri stated that only “industries and the civil service” will be affected. He was also reported to have said that the retail sector does not fall under “industries” which contradicts MITI’s earlier statement on the same day.2

2) Who exactly are the management and supervisory staff? What is MITI’s definition?

Many companies are still not sure of who exactly constitutes management and supervisory staff. This is especially relevant in the professional services sector where almost everyone beyond the entry level would have at least some supervisory responsibilities. MITI may be more familiar with the manufacturing sector where the majority of the staff work on the factory floor and where the ratio of supervisors to blue collar workers is very high. The same model cannot be used in the accounting, legal, IT and financial services sectors because of the higher number of white collar workers .

3) For the 10% of management and supervisory staff who can come in to work, what are the detailed working arrangements?(e.g. working in shifts, working for 4 hours but not from 10am to 2pm necessarily, etc…)

MITI probably relented from pressure from the chambers of commerce and industry groups when it allowed 10% of management and supervisory staff including those with responsibilities in accounting, finance, administration, legal, planning and ICT to come to the office from 10am to 2pm for 3 days a week. It is not stated whether a company can adjust these working hours e.g. from 9am to 1pm or from 12pm to 4pm. It is also not clear if companies can rotate the staff who can come into the office for 4 hours a day, 3 days a week. In an interview with Astro Awani, the Deputy Secretary General of MITI, Norazman Ayob, did clarify to say that the companies can pick and choose how they want to assign their management staff to come into the office on a rotation basis but this was not incorporated into the MITI media statement.3 In addition, this working arrangement for the supervisory staff does not take into account manufacturing facilities which have to operate their plants on a 24/7 basis. Limiting the working hours from 10am to 2pm would not work for the supervisory staff which have to oversee different shifts at different times in a manufacturing facility.

4) What about those companies which cannot function properly with only 10% of management and supervisory staff at the office and working only 4 hours for 3 days a week?

MITI’s directive of only allowing 10% of management and supervisory staff to come into the office to work may disrupt the operations of companies in certain sectors. This is especially relevant for the sectors where management and supervisory staff are required to have face to face engagement with their customers for example in financial services and sales. Will MITI make exceptions for sectors which can demonstrate that they cannot function properly with only 10% of management and supervisory staff working at the office?

5) What about small businesses with less than 10 employees?

There were also questions directed at MITI’s social media asking about companies with less than 10 staff. Does this mean that for these companies, no management or supervisory staff can work at the office?

6) Are swab tests for those who still have to go to work mandatory?

Or only for those in the red zones? Or only for certain categories of workers or industries? One of the major areas of confusion was whether staff who cannot work from home needed to undergo swab tests before coming to the office to work. This issue was not addressed in the MITI media statement and was only subsequent clarified by Ismail Sabri in his media conference. The COVID 19 swab tests was only compulsory for those workers in the construction and security sectors and those workers with symptoms. For workers in the red zones who have to go to the office, it is not mandatory but they are highly encouraged to go for a swab test. (See Figure 1 below) Because this clarification only came out yesterday evening, many companies had already made arrangements for their staff to be tested. This is an additional cost to companies which are already under financial pressures because of the COVID pandemic. In addition, for those who want to claim the swab test expense from SOCSO (max of RM150 per test), they can only go to ONE panel clinic in the entire country which is the BP chain of health clinics.4 The number of panel clinics should be increased so that bottlenecks can be minimized and more clinics can offer their COVID testing services.

7) Where are the red zones exactly?

It is also not clear which districts / areas are considered as red zones by the National Security Council (NSC) for the purposes of testing. For example, Figure 2 below shows that there are 5 districts (“daerahs) which are considered red zones in Selangor – Petaling, Hulu Langat, Gombak, Klang, Sepang and Kuala Langat. But according to Figure 3 below, not all of the sub-districts (“mukim) are classified as red zones within the red zone districts. For example, the Kapar mukim in the Klang district is a yellow zone and only the Kajang mukim in the Hulu Langat district is classified as a red zone. Does this mean that those who are in the Cheras mukim in Hulu Langat (a yellow zone) are not encouraged to go for swab tests and only those who are working in the Kajang mukim should go for the swab tests? In addition, do companies know the exact boundaries of these mukims / sub-districts? As the Member of Parliament for Bangi, I am not 100% sure where the boundaries of the Cheras mukim in Hulu Langat starts and ends and where the boundaries of the Kajang mukim starts and ends. I am quite certain that many companies will also be confused as to the mukim they are located in.

8) What is the punishment for non-compliance?

MITI has announced that they will be doing spot checks on companies to make sure that they comply with the conditions announced under the CMCO. But is it fair to punish companies who are not able to comply to these conditions because of the lack of details on the part of MITI and contradictory statements between MITI and the NSC? I can only hope that companies will not be punished as a result of unclear instructions on the part of MITI and the NSC.

9) Where are the detailed FAQs by MITI?

MITI’s statement on the 21st of October raised more questions than answers. This is why MITI should have issued a detailed FAQ to answer specific questions from the companies affected by this directive. Some details were apparently given by Deputy Secretary General Norazman during an industry engagement session on the 21st of October. But because these details are not confirmed by MITI, companies cannot assume that this is the official position of the government. MITI still has a lot of work to do to answer these questions by issuing a detailed FAQ. The confusion and the lack of clarity on the part of MITI and the NSC means that employers and businesses will be operating under a cloud of confusion when this directive starts on the 22nd of October 2020.

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