by NUR HANANI AZMAN / pic by TMR FILE

IT IS critical that Malaysia’s employment and social security systems undergo a holistic reform, particularly for the country’s youths, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said.

He stressed that the challenges to improving social security include ensuring adequate old-age pension as Covid-19 has aptly demonstrated that global crises and shocks could totally jeopardise one’s longterm retirement plans.

“By the end of this year, out of the 6.1 million members aged under 55 with savings less than RM10,000, nearly 75% will not have enough funds or at least RM240,000 to retire above the poverty line.

“The government must strike a balance between granting early access to retirement savings as a means of short-term support, and the potential longer-term negative effect on the adequacy of old-age pension,” he said in his closing remarks at the International Social Wellbeing Conference 2021 themed The New Narrative: Turning the Tide on Inequality yesterday.

Tengku Zafrul said there is only nine years away to 2030, when 15% of the population is expected to be 60 years old or older, which leaves the government with only a few years to plan and implement age-related policies and reforms.

“Policies on retirement income, retirement age and re-employment are critical to a country’s fiscal sustainability. As people live longer, those without adequate retirement savings for health and long-term care will add to the financial obligations of the country.

“To this end, the Employees Provident Fund is required by law to protect its members’ retirement funds. As more economic and social sectors reopen, the government will look into ways to help the affected Malaysian Family to rebuild their retirement fund,” he added.

According to the International Monetary Fund, since the onset of the pandemic, governments have provided close to US$17 trillion (RM71.57 trillion) in fiscal assistance.

“In Malaysia, we have announced RM530 billion in economic stimulus and assistance packages. As outlined in Budget 2022, we remain committed to continuing various social protection programmes that will benefit the entire Malaysian Family.

“In Budget 2022, various measures were introduced to help people and businesses recover, including direct aid for the bottom 40%, partly the middle 40% and micro-loans with 0% interest rate, and a six-month moratorium,” he shared.

To mitigate the economic fallout from Covid-19, the Finance Ministry has made job retention and creation a top priority by establishing the National Employment Council in December 2020.

As of Oct 31, 2021, over 462,000 new job opportunities have been created through 27 initiatives.

For next year, in addition to creating jobs, Tengku Zafrul said it is equally important that issues on unemployment and financial education be carefully looked into.

Among others, he said the government had allocated RM4.8 billion to create 600,000 jobs through the JaminKerja programme in 2022 while addressing structural employment issues such as skill mismatch, youth unemployment and underemployment, and considering entrepreneurship as a job creator.

“In addition to financing, measures will be taken to incentivise the adoption of digitisation and technology to encourage entrepreneurship and also to equip workers with the right technical skills, particularly those who are less academically inclined but skilled with their hands.

“We must also acknowledge Technical and Vocational Education and Training (TVET) as a job creator. Reflecting the importance of TVET, we have allocated RM6.6 billion for its development in 2022,” he said.

Tengku Zafrul said the government would also seriously look at nurturing financial literacy among the people as this will enable them to take personal responsibility for their retirement funding and financial wellbeing.

“Financial literacy also promotes stable household balance sheets, which benefits the economy and financial system as a whole,” he concluded.