Budget 2020: Stop kidding yourself and buck up

Raggie Jessy Rithaudeen

Note: A critical error regarding the estimated number of unemployed fresh graduates was corrected.

Pakatan Harapan is singing praises of Budget 2020. Barisan Nasional, however, is calling it a huge disappointment, making specific notes of the reduced growth rate and senseless ‘fuel subsidy’ scheme. While I do agree that the subsidy scheme is a “big joke,” the budget definitely hit a chord or two with the youth and may be bad news for Barisan Nasional if not handled well.

How so?

The Government of Malaysia announced the Graduates@Work programme, a programme that promises unemployed grads who secure jobs a wage incentive of RM500 per month for a duration of two years. The programme also promises companies that hire these graduates a RM300 per month “hiring incentive” for the same duration. Graduates@Work is one among four initiatives, the remaining three being women@work, locals@work and apprentice@work.

Is it well received?

Quite.

Already, The Malaysian Youth Council (MYC) is calling Budget 2020 “a well-thought out budget to address unemployment.” Its president, Jufitri Joha, said the four-pronged Malaysians@Work or #MalaysiaKerja initiative, including the graduates@work programme, will go a long way in reducing youth unemployment. Now, it doesn’t matter to me if MYC is pro-PH or pro-BN. What’s more important is for BN to take Jufitri’s assessment with a pinch of salt, go back to the drawing board and rethink how it plans to capture the youth vote.

How can Graduates@Work reduce unemployment?

Currently, one in five fresh graduates remains unemployed for an average of six months upon graduation. In total, we have an estimated 110,000 -120,000 unemployed fresh graduates who belong primarily to the 21-25 age group. That’s roughly 25 per cent of the unemployed fresh-grad population, coming from a population segment that comprises a little over three million people. Going by current trends, we’re talking about an estimated 70,000 -80,000 registered voters (let’s call this the 80k group) who’re all waiting to see if PH can resolve their job problems.

Now, imagine if a company is offered RM300 per month for two years should it agree to hire from the 80k group. Let’s assume that this is a small company that needs two engineers but can only afford one on its payroll. Under the circumstances, the RM300 may not be enough to allow the company to hire another engineer.

However, should engineering graduates be offered a wage incentive of RM500 per month for two years upon employment, the company would be able to negotiate a lower salary with one and afford to hire him (or her). Would that not allow small and medium scale industries that are typically understaffed to hire more graduates than usual?

And I’m just scraping the surface here…

The Women@work programme is even aimed at creating 33,000 job opportunities per year for women aged 30 to 50 who stopped working for a year or more to return to work. Quite frankly, the programs will benefit a very large number of people, the majority of whom are voters and will likely see this as a win for PH.

So it’s win-win?

Yes.

Smaller and medium scale industries could stretch hiring capacities and use this to improve output. This would pave the way for expansion and provide more job opportunities in the future. The quality of life for graduates would not be a problem as they would earn an effective salary commensurate to their qualifications. As for the country, the more the small and medium industries grow, the lower will be the unemployment rate. In due time, the government will be able to do away with employment incentives and focus on tax-reduction schemes.

Whichever way you look at it, it’s win-win. A small engineering firm can easily hire an unemployed graduate on a contract basis for two years at ‘reduced cost’ to help train lesser qualified employees. As a trade-off, the company could impart new skills to the graduate with the promise of permanent employment should the company expand. Should the company not expand, the graduate need not worry as he (or she) would have gained enough experience to qualify him (or her) for a better paying job elsewhere. There is no version of this in which the graduate would be affected adversely.

So the GoM has succeeded in getting the youth’s attention?

Yes.

Those aged between 21 and 30, particularly the Malay-Muslims, are concerned primarily about job opportunities and the need to settle down. The GoM is well aware of this and has even thrown in a Rent-To-Own (RTO) financing scheme targeted at those unable to afford the initial 10 per cent deposit for home financing. Now, imagine an unemployed graduate suddenly getting RM500 a month upon finding work and being given the option of renting a home before deciding to purchase it a year later.

Is that a problem for BN?

Yes.

Like I said, BN has to go back to the drawing board and rethink how it plans to capture the youth vote. So far, the coalition has done next to nothing to tap into the youth conscience despite my repeated caution that the 15^thgeneral election (GE15) will be a youth election. Should the voting age be reduced to 18 and if GE15 is held next year, we’re talking about close to 45 per cent of the voting population resonating positively with PH’s employment and housing schemes.

But what about the ridiculous fuel subsidy programme?

What about it?

The scheme is a big joke, granted. But the thought of “finally getting proper employment” and “a proper home” is a bigger priority to many than fuel subsidy. Coupled with the promised 18 per cent (average) reduction in PLUS toll rates, the GoM has successfully shifted conversations away from the subsidy issue. I’m quite sure that the plan is to leave the matter unresolved so that a better package can be introduced just before GE15 to show voters how “caring and people centric PH is.”

So, if you keep wasting your time worrying about it, all you end up doing is helping PH highlight a problem which it will then ‘resolve’ to showcase its ‘greatness’.

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