Budget 2021: Towards strengthening cooperative movement in economic cycle


THE presentation of Budget 2021, scheduled for Nov 6, is seen as an important medium towards empowering 14,625 cooperatives nationwide to remain relevant, sustainable and competitive in today’s increasingly challenging economic cycle.

Angkatan Koperasi Kebangsaan Malaysia Bhd (Angkasa) president Datuk Abdul Fattah Abdullah (picture), however, said the effort would only be achieved if the government could provide a more balanced allocation to cooperatives similar to those received by small and medium enterprises (SMEs), so that cooperatives can double their business and also contribute to the economic development of the country.

“Cooperatives are recognised by the government as the third sector in economic development after the private and government sectors, therefore, to make them remain relevant, sustainable and competitive, support from the government in the form of finance is needed in order to improve their socio-economic status,” he told Bernama.

Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz is scheduled to table Budget 2021 and it will be the first budget under the Perikatan Nasional government since taking power last March.

A total of RM297 billion or 18.4 per cent of gross domestic product (GDP) was allocated for Budget 2020, of which 81.1 per cent or RM241 billion was for operating expenditure while the remaining RM56 billion was for development expenditure.

“In preparation of Budget 2021, we were called by the Ministry of Finance to provide input, so we have voiced our wishes and needs that should be provided for us just like SME entrepreneurs,” he said.

Apart from that, he said the allocation also aims to expand the e-commerce business for cooperative retailers involved in the 100 Basic Goods Supply programme (BA100) to address the impact of COVID-19 transmission and strengthen their economic position in the post-Movement Control Order.

The BA100, which is supported by the Entrepreneur Development and Cooperatives Ministry (MEDAC), is an e-commerce business programme that gathers purchases of basic goods in bulk from cooperative-owned grocery stores by offering daily necessities at more economical prices than the regular market.

Angkasa has received a total of 1,500 registrations from cooperative retailers for the BA100 and aims to expand the BA100 programme to 3,000 cooperative retailers nationwide for the period of 2020-2021.

“Our target is to develop at least 3,000 cooperative retail stores with digital platforms that can indirectly empower services to cooperative members and facilitate the B40 (bottom 40 per cent income category) users, as well as shorten the supply chain system as it does not involve middlemen.

“For that purpose, we propose that the government provide an allocation in the form of revolving capital to enable the purchase of goods in bulk and channel (these) to cooperative grocery stores, as well as, to upgrade the business system to a more competitive and efficient digital platform,” he said.

He also said that the cooperative’s contribution towards GDP is not too large as the cooperative’s contribution is more towards the social welfare of the community, especially providing business platforms and employment opportunities to its members.

In addition, Abdul Fattah stressed that the allocation in the budget for cooperatives should be prepared by each ministry that has sponsors for the establishment of the cooperative such as the Rural Development Ministry which has cooperatives such as the Felcra cooperative, Felda cooperative and Risda cooperative.

He said the allocation provided by MEDAC’s Cooperative Commission of Malaysia alone was not enough to empower cooperatives and double their business activities.

Meanwhile, Angkasa also wants the government to increase the tax rate from RM750,000 to RM1.5 million which aims to increase the business capability of the cooperative movement, as well as double their business activities.

“This tax rate has never been reviewed for more than 10 years, (so) it is time for it to be reviewed. We also request that the tax exemption period be extended from five years to eight years, so that every cooperative, especially the new ones, can strengthen their positions in the socio-economic cycle.

“We also want the expenditure to make cooperative policies and policies to be calculated as tax-exempt components such as the expenditure of the cooperatives’ annual general meetings, (as) these are important platforms and require high expenditure, given the large number of cooperative members which is 6.09 million people,” he said.


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