By Sofea Azahar, Research Analyst at EMIR Research
Budget 2021 is hoped to be special and generous as it will be tabled during an unprecedented crisis which has never been anticipated that the impact would be as bad as now. People are losing jobs as companies are undergoing cost-cutting measures and this is particularly for the tourism-related sectors such as aviation sector and they will be counting on the initiatives be announced in the budget.
Tourism sector is one of Malaysia’s important sectors with tourism-related activities contributing 15 per cent to national GDP and it employs more than 20 per cent of the workforce.
Due to its reliant on external incomes from international travels, the heavy impact of the pandemic has indeed cost many livelihoods which have been solely dependent on this sector.
For example, it was recently reported by Reuters that Malindo Air has performed retrenchment measures involving terminations and a 1-year unpaid leave for 2,647 employees.
Prior to this, AirAsia Bhd and AirAsia X Bhd confirmed its second round of retrenchments on Oct 9 involving 10 per cent of its workforce.
And it is sad to see those who have terminated from their service saying they have lost their dream job. For instance, a short video made by a flight attendant of Malindo Air named Maisarah Johari went viral as she expressed her grief of having to let go of her dream job since she was a kid.
Those who have been laid off have to look for other means to make ends meet such as selling haircare sets, jewellery, or even venturing into food and beverage industry.
For example, an ex-senior airline pilot of Malindo Air named Captain Azrin Mohamad Zawawi has started making full use of his culinary skills after being retrenched, as reported by NST. He now opens his own ‘Kapten Corner’ stall in USJ 11, Subang Jaya while making it quite unique by donning his captain uniform.
Despite the ability to shift jobs, it is still a huge loss for him in terms of income as he needs to survive based on daily income compared with his previous monthly income that was fairly high.
It is positive to see that the government namely the Social Security Organisation (Socso) is trying to help the affected employees in aviation sector through various initiatives.
Socso has stated that the organisation will support the retrenched workers via the Employment Insurance System (EIS) benefits, as well as with the incentives announced in Penjana. This includes job search allowance up to 6 months, re-employment allowance, Penjana hiring initiatives through MYFutureJobs, and training allowance of up to RM4,000 for training costs under its vocational skills training programme.
However, a big uncertainty remains to when tourism-related sectors including aviation will recover as we are still working on the vaccines and travel ban is still ongoing in trying to mitigate the infections.
The Minister of Science, Technology and Innovation (Mosti) Khairy Jamaluddin recently said the earliest supplies of vaccines are expected to be available would be in the first quarter of next year and it will only be allocated for 3 per cent of the population namely the frontliners.
The timeline of recovery appears uncertain as it will be dependent on when majority of Malaysian population gets to be immunised and it is also reliant on the recovery pace of external economies.
Therefore, there is an urgent need to fasten the allowance distribution to the affected workers for them to weather through this unprecedented crisis while searching for other jobs.
Budget 2021 should focus on helping the workers involved in the tourism-related sectors not only in short term but also, it needs to be at least adequate for a longer term, i.e. until next year.
The Wage Subsidy Programme (WSP) to retain the remaining employees should be extended until next year due to the uncertainties in the recovery of the sector.
Allocation of fund for the reskilling and upskilling programmes under Penjana should also be increased from the original RM2 billion in the Budget to cater for more unemployed persons which stood at 741,600 as of the latest data in August and this is excluding those who have been retrenched in the months after up until this month.
As what EMIR Research has coined, empathy needs to be an essential element of government’s efforts in helping rakyat including the initiatives of Budget 2021 as unprecedented times really do require unprecedent measures.