By Leon Foong, CEO of SOCAR Malaysia,
With people around the world called to stay at home and work from home to mitigate the spread of Covid-19, the mobility sector has definitely been significantly impacted, including in Malaysia. With the recent spike in Covid-19 cases around Malaysia, we are once again called upon to work from home, thus reducing the demand for mobility solutions, just as the economy is showing signs of recovery.
Meanwhile, while the Government’s economic stimulus packages have contributed to helping Malaysians weather the storm and keep domestic spending flowing, the latest unemployment numbers at 741,600 people or 4.7 percent as of August 2020, indicate that Malaysians continue to need ways to supplement their income. This is where the gig economy is primed to fill the gaps by offering both income and job opportunities.
In view of the upcoming Budget 2021, SOCAR Malaysia has several items on our wishlist that we are proposing to the Government to further support the recovery and growth of the mobility sector and gig economy.
- Building the economy together. Fiscal and monetary stimulus are only as effective as where the funds eventually flow to. We need to focus on the multiplier effect of investments, and one way to do this is to encourage greater investments in SMEs. The gig economy has created many opportunities, it has also created a new age of entrepreneurs – from the Airbnb-entrepreneur to the fleet partner who runs a fleet of drivers and cars on e-hailing platforms to the rental car business who puts their car on TREVO. These platforms generate new income opportunities and these businesses help create jobs. Why not make it easier for people to invest in such platforms and their SME partners? Tax credits and matching schemes will go a long way especially when invested in the right areas with the right multipliers. RM10,000 equity invested into a fleet partner can in turn generate up to RM35,000 in revenue for these businesses, so why not make it easier for the rakyat to invest?
- Embracing the digital transformation. There is a substantial portion of economic activity that falls under the informal sector. With better digitisation tools and digital transactions, these transactions can be captured and eventually contribute towards fiscal income. However, we should first invest and give incentives to people to adopt digital solutions. One way to do this is to lower transactions fees for new payment gateways and to reduce the transactions costs for dispersing money to people. Malaysia also needs to start having open discussions and clear regulations around the future of digital currencies and the blockchain. Disruption will come to us sooner rather than later, and it is time for Malaysia to start building a competitive advantage in this space and seek a understanding of how digital currencies and blockchain could lead to new innovations that generate benefits such as lower transaction costs, more accessible decentralised insurance schemes with fewer fraudulent claims and less economic leakage.
- Direct shorter-term relief. On a more immediate basis, it is crucial for the Government to continue supporting the gig economy and reducing the barriers to entry for Malaysians, to allow them to reap its benefits. At the same time, with many companies still needing help to weather the storm and survive the current economic uncertainty, relief from the Government via tax rebates, especially for SMEs and micro-enterprises, would be most welcome. At SOCAR Malaysia, we are ever-ready to support Malaysians during such trying times, through our ongoing programmes and longer-term investments.